Diversify markets, make India a textile hub: Maran

30 Jun 2009, 2028 hrs IST, ET Bureau
The Economic Times

TIRUPUR: The textile ministry is keen to make India a destination for textile products. "People visiting India should look at it as a market for
buying textile goods," said Union textile minister Dayanidhi Maran here on Tuesday.

Speaking to reporters after addressing exporters in the knitwear town, Mr Maran said Indian textile products should be aggressively marketed under the ‘Made in India’ brand.

The country should look ‘east’ and not wholly depend on US and Europe markets for knitwear exports, he said. Noting that textile exports have dropped due to global recession, he said exporters should look at markets like Japan, Cambodia, Australia, South Africa, Brazil, Russia and Turkey to promote the Indian products.

Highlighting the potential of Indian textiles beyond the traditional markets, he cited the instance of the Japanese preferring Indian brands over those made in China.

To initiate the process of tapping newer markets, Mr Maran is leading a delegation of textile exporters to Japan to take part in an International fair and a buyer-seller meet from July 20 -24.

"The fair has attracted 250 exhibitors from all over the world and nearly 50 Indian exporters are going to exhibit their products there. Among the 50 exhibitors, 44 are from the apparel sector," added Tirupur Exporters Association president Sakthivel.
In addition to new markets, Mr Maran asked textile manufacturers to look inward and cater to the growing domestic market. "Despite global meltdown, India survived because of its domestic consumption," he said.

In the textile industry, 70% of consumption is from the domestic market. Therefore, garment producers should look at promoting quality goods within India too, the textile minister added.

On the need for infrastructure development in Tirupur, Mr Maran said, as an MP, he would raise the need for implementing marine discharge project as well as other development schemes.

Earlier, Mr Sakthivel requested the minister to support the Knitwear Technology Mission, essential for the growth of the industry in Tirupur. "Since we mainly produce cotton-based products for Western markets, we need technology support to produce other synthetic-based products too," he said.

Govt bails out textile sector with stimulus package

Govt bails out textile sector with stimulus package
March 26, 2009 (Portugal)


The Portuguese government has finally woken up to the fact that its textile and garment industry is in the deep throes of the recessionary trends prevailing across its key markets; countries in the European Union and needs emergency measures for survival.

The government has now announced a € 850 million stimulus package for the domestic textile and garment sector. This will help the sector access funds at cheaper rates, boost exports and ensure that jobs are not lost in the labour intensive sector.

The textile and garment industry in Portugal employs over 180,000 people and accounts for over 12 percent of export revenues of this European country. Exports fell by 6.5 percent in 2008, mainly due to reduced demand from its biggest market; Spain.

The government will also fund investment and give incentives for modernization of the textile units to upgrade themselves as well as provide support for availing of export credit insurance and faster access to European Union funds.


Fibre2fashion News Desk - India

Global Recession Hits South Asia's Apparel Industry

Global Recession Hits South Asia's Apparel Industry
By Anjana Pasricha
New Delhi
27 March 2009


South Asia's export based apparel industry is reeling under the impact of the global recession as demand for clothing from Western countries slows down. The industry is one of the biggest employers in this region.

For the last three years, 40-year-old Phekan sewed buttons on cotton shirts in a small factory in Gurgaon, on the outskirts of New Delhi earning about $100 a month. But she lost her job earlier this month after the European retailer buying the shirts slashed orders.

Phekan is worried how she will continue to live in the city while searching for another job.

Phekan says her landlord will demand rent on the first of the month, and she does not know how she will pay the money.


Garment workers at factory in Dhaka, Bangladesh (file photo)
She is among tens of thousands of workers in India, Sri Lanka and Bangladesh who have lost jobs as the recession in the West slows down orders for garments. These countries are among several Asian countries where the apparel industry boomed in recent years as demand in the United States and Europe grew steadily.

Raghav Gupta, President at India-based consultancy Technopak Advisors, says bigger manufacturers are able to absorb the impact of the slowdown, but many smaller units are badly hit.

"The bigger people, because economies of scale and cost pressures are important, are still going to grow, but it is small companies which don't have economies of scale, they might go out of business," Gupta said.

The industry is impacted slightly less in India, where strong domestic consumption is providing a market for manufacturers. But the export dependant industries in Bangladesh and Sri Lanka have been impacted more severely by shrinking retail sales in the West.

According to the Bangladesh Garment Manufacturers and Exporters Association, an estimated 25 percent of orders have been cancelled by Western buyers.

The Association's Vice President, Shafiul Islam Mohiuddin, says the industry was hoping to exceed last year's exports which totaled over $10 billion, but is unlikely to meet the target.

"The export goal initial in this year was $13 billion, and we are little scared whether we will be able to achieve that goal," he said. "Buyers are delaying the goods because of falling demand. We are struggling for survival in these bad days."

The textile and garment factories in the region provide jobs to tens of millions of people, especially women, and are the biggest employers in the region after agriculture.

Govt estimates 500,000 job losses in textile industry

Govt estimates 500,000 job losses in textile industry

Sapna Dogra Singh / New Delhi March 20, 2009, 0:56 IST



The estimate is less than industry’s estimate by half.

The Union textile ministry estimates that between 300,000 and 500,000 people will lose their jobs in this labour-intensive sector by March 31, due to the ongoing global economic downturn.

The government’s estimate is well below the projections of industry lobby groups, which put the number at around 1 million.

The textiles and garments industry is the second-largest employer in India after agriculture. It directly employs 35 million people and indirectly provides livelihood to about 88 million people.

“According to a survey carried out between October 2008 and December 2008, which covered 3,000 units, it was found that 0.92 per cent of workers would lose their jobs,” said a senior official of the ministry. Based on this survey, the overall industry job loss was extrapolated.

However, the textile industry contradicts this and projects a much higher figure of 1 million people who would be rendered jobless by the end of the current financial year.

This sector has been badly hit by the ongoing global recession, which has resulted in closing of many units. About 50 per cent of the total production of textiles and garments in India is exported, of which 60 per cent is exported to the United States and the European Union countries. But the recession in the West has hit the demand.

Indian exporters of textiles and garments are facing stiff competition from manufacturers in Bangladesh, China, Vietnam and Sri Lanka, which produce goods at much cheaper rates.

“There would be a drop of 3 per cent in overall production in the industry, which would see a job cut of around 10.5 lakh (or 1.05 million),” said DK Nair of the Confederation of Indian Textile Industry (CITI). He added that since many units might retain some workforce for new orders, this number would stand at 1 million.

The ministry official, however, disputed this figure, saying that the number of people losing jobs could not cross 500,000 due to the depreciating Indian rupee, which would have a positive fallout on the entire textile industry.

About 5,000 people were rendered jobless due to closure of 12 mills in the organised sector in the September 2008-January 2009 period, when the situation was at its worst. This, according to Nair, is not a correct indicator because the organised sector contributes to just 3 per cent of total textile production.

While 97 per cent of the spinning units are in the organised sector, only 3 per cent of the fabric manufacturing industry is in the organised sector. The entire garment industry comes under the unorganised sector.

'Job losses will hit historic highs' – Mr Tibrewal, Gangotri Textiles

'Job losses will hit historic highs' – Mr Tibrewal, Gangotri Textiles
February 28, 2009 (India)


Job losses in the textile and clothing industry are mounting with each passing week and month. The turmoil in international markets is affecting the sector like never before and also can be said safely, that the Indian textile and garment sector has been impacted to a larger extent then it has influenced other competitor countries like China, Bangladesh and Vietnam.

According to estimates there have already been lay-offs to the tune of 500,000 from within the sector, and there are expectations of five times that number in the next two months. All hopes of the sector were pinned on the union budget and the industry was waiting with bated breath for incentives to be announced, but it was not to be so.

To have a better understanding of the turmoil in the biggest employment generating sector after agriculture, fibre2fashion spoke to Mr Manoj Kumar Tibrewal, M.D of the vertically integrated textile company, Gangotri Textiles Ltd. Gangotri Textiles has world class in- house facilities from processing yarn to manufacture of finished garments and employs around 1,800 people.

We started off by asking him his view on the job losses in the industry, to which Mr Tibrewal said, “Job losses are in lakhs in the textile and clothing sector due to decline in production. This has been attributed to the slowdown in domestic demand and a decline in exports. If this condition prevails the situation will further worsen and the job losses will hit a historic high”.

He continued in the same vein by adding, “The companies, which are purely export oriented, will suffer definitely. The companies, which are equally balanced between domestic market and exports, will manage to survive due to the demands from the domestic sectors. However it is going to be a tough & challenging time in the near future”.

Next, we asked him his opinion and advice on controlling the situation, to which he replied by saying, “First, by focusing on offering value products as there has been a major shift from the premium segment of lifestyle brands to value brands. Introduction of more innovative and fashionable products at an affordable price will help the brand to sustain in the market”.

“Second, he said, “By enhancing the rates of Duty Draw back / DEPB (Duty Entitlement Pass Book) in textile products will help to increase the textile exports. Third, withdrawing 5 percent incentive on export of cotton will help the textile industry to progress. Instead of encouraging cotton export, Government should encourage value added products like yarn, garment etc”.

“Fourth and the most important, he commented, “Government should also liberalize the labour laws so that entrepreneurs are encouraged to come up with more garment factories, which are labour intensive. The garment factories should be turned in to engines for growth to compete with countries like China, Bangladesh, Vietnam & Cambodia”.

He also urged the Government to address the power shortage in Tamil Nadu. He suggested that if it is unable to immediately address this grievance, it should take steps to trim down the power cost by reducing excise duties and sales tax on furnace oil & diesel. “All these, if adopted will go a long way in solving this tsunami like crisis”, he optimistically ended by saying.



Fibre2fashion News Desk - India

Indian: Stimulus packages fail to enthuse apparel exporters

Stimulus packages fail to enthuse apparel exporters

Source: Fibre2fasion January 21, 2009 (India)

The government has declared two stimulus packages in the last few weeks to boost exports and to tackle the global economic crisis, but a sense of euphoria seems to be missing in the exporter’s community. The apparel export industry in particular does not seem to be so happy with the announcements. All the apex apparel associations aver that, apparel exports will fall short of a wide margin of the targeted US $11.6 billion in the current fiscal year (2008-09). Reacting to the announcement of the second stimulus package, the Chairman, Mr Rakesh Vaid, of the Apparel Export Promotion Council (AEPC), which has more than 6,000 member companies on its rolls said, “The government has done very little to help the $10 billion apparel export sector which employs nearly 3.9 million workers. Lakhs of workers have lost work due to global economic recession.” “We are in consultation with officials and hope the government will come up with concrete measures soon to revive the textile and readymade garments industry,” he added by saying. Against the set target of $11.6 billion, the apex body of apparel exporters does not expect to cross $8.78 billion in the current fiscal year, compared to $9.69 billion achieved in the previous fiscal year (2007-08). In response to the first package declared in December, Mr Vaid had said, "We were expecting an increase in duty drawback rates, but there is no mention of it in the package. We have also been demanding income tax exemption for five years to offset the huge losses piling up, but there has been no response.” Mr Vaid said that the allocation of Rs 1,400 Crore for textile up-gradation fund is what the government owes to the industry. "The allocation which has been pending for many years is for payment of arrears. There is nothing new in it”, he added by saying. On two per cent interest subvention for exporters up to March 2009, Mr Vaid said the move will benefit the sector marginally” The President of the Clothing Manufacturers Association of India (CMAI), Mr Rahul Mehta gravely said, “The $35 billion Indian apparel industry remains in severe crisis zone as there is nothing to stimulate production in the domestic segment and inadequate incentives in the export sector. The reforms package announced by the government offers no incentives for revival of the apparel industry facing mounting costs, shrinking local and global markets thereby compelling cut in production and employment.” He vehemently said, “In contrast, China has increased its export incentives three times in the last six months, raising them from 11 to 17 percent and Pakistan too has announced a R&D rebate of 6 percent besides a 2.5 percent cut in interest rates.” Mr Mehta lamented by saying that, “armed with higher export rebates and incentives, countries like China, Vietnam, Cambodia and Bangladesh would continue to edge out Indian exporters.” The reaction of the President of Tirupur Exporters Association (TEA), Mr Sakthivel to the second package was more vehement. He said he was totally disappointed with the second stimulus package and unfortunately the government had not considered requisitions put forth by TEA like, five year income tax holiday, two years moratorium on term loans, exemption from payment of all service and fringe benefit taxes to the apparel exporters. Among other demands he said the government had not considered increasing duty drawback rate to 12 percent for cotton knitwear garments and provide 7 percent packing credit or in lieu increase interest subvention by 2 percent and increase the total interest subvention to 4 percent.

Fibre2fashion News Desk - India

Garment: Status of Managers and Supervisors in the Garment Industry

Status of Managers and Supervisors in the Garment Industry

Source : AEPC

An analysis of Apparel Manufacturing SMEs in the NCR

"No business in the world has ever made more money with poorer management." -Bill Terry (One of the greatest baseball players of all times)

The quote above very appropriately states the purpose of investigation of the management in the garment industry. State of the art machinery, efficient labour force and standard operating system cannot do wonders without effective management.

Evaluating the managerial workforce of the garment industry was one of the primary objectives during the survey. This article illustrates the findings on the general status of managers and supervisors across the industry.

The analysis is based upon the survey conducted by the Methods Apparel Consultancy. Ten factories were rated and 300 people were assessed during the surveys in November-December, 2007 commissioned by the Garment Technical Cooperation (GTZ) in association with Okhla Garment and Textile Cluster (OGTC) to analyze current systems and advise ways to improve overall productivity. The survey was done in two parts, the first analyzing the factory and the second evaluating the personnel.

A comprehensive checklist was developed which covered various parameters of managerial and supervisory characteristics and each point on the checklist was awarded a value of 1 to 5 points. The people were evaluated by their immediate superiors in complete confidentiality and a score for the average level of the industry was calculated.

Evaluation Criteria

1. Communication skills were found to be grossly lacking among both managers and supervisors. Many of them still believe that the louder you shout the more you produce. Effective communication skills if not inborn can be acquired by professional training and can be a major tool for the managers.
2. The discipline to manage a to-do list can be a vital asset in organizing one's work.
3. Leadership Techniques must be mastered by the managers/supervisors to get productive results from their employees. Only a good leader can steer its team and motivate them.
4. Effective and logical decision making (57.8%) is another important requirement which was lacking in a large percentage of the people.
5. Planning and organization scored 56%. The managers/supervisors should be trained in effective planning strategies by utilizing the data available through various management/ supervision techniques. The most talented people of the organization are mostly busy with fire fighting and shipment delivery.
6. To further increase the level of technical expertise, the managers/supervisors should be encouraged to continuously upgrade themselves by training and attending seminars on various new products and procedures. It was surprising to note that many managers/supervisors had no knowledge of the innovative techniques which can be used to simplify their work
7. Work Study has come up as one of the most important areas for training requirements.
8. Quality and Productivity - The repair and rejection rate is at times as high as 70% and many times it goes unrecorded. The efficiency rating of the industry is also at a level of 33% only.
9. SOPs were not present in many factories and in most cases wherever present were only for decorative purposes for the buyers.
10. Computer Knowledge. A refresher course in basic usage of computers can help managers.
11. General industry knowledge This cannot be taught but has to be inculcated by the mangers themselves.

Managers

Experience is valuable but the knowledge of innovative and efficient management techniques is equally important. Properly constructed professionally run Training courses are essential for developing management skills. Although many of the managers have considerable work experience this is not enough to move the industry where it needs to go, companies must review their management structures and the people they have in place. Management techniques are changing constantly, are your managers fit to cope with the demands that are now being expected? If you cannot say yes, then you must embark on a serious move to change this.

It was astounding to note that the manner in which managers overrated their colleagues indicating that they do not have sufficient performance expectations from their staff.

The training requirements are as follows:

Suggested course	Statistical Analysis	Urgency
Communication for Managers How to get the best out of your staff Conflict management Team building	61 managers were evaluated 96% were unable to achieve the required level of communication skills	$$$$$$
General Management techniques Work Study Garment engineering	92% need knowledge of the techniques required in todays demanding and competitive production scenario.	$$$$$$
Computer knowledge	Only basic computer knowledge is present with some of the managers.	$$$

**The $ represents the level of urgency for training. The higher the number of $s the more urgent is the training requirement.

Supervisors

None of the supervisors have professional education in garment manufacturing; their knowledge is based on their work experience only. Most of the supervisors had no idea about the basics of supervision. In most cases good machinists were put on the job of a supervisor without any prior training or education.

It is extremely important to teach them a more professional approach to supervision.

The requirement list above is covered by the following courses

Suggested course	Statistical Analysis	Urgency
Supervisors Course Includes communication, planning, team work, workstudy, garment engineering, quality and productivity.	Out of 204 total supervisors 65% need extensive training.	$$$$
Work Study/Garment Engineering These are specialized courses focusing on the vital needs of the industry	51% out of a total of 204 supervisors need specialized training on work study and garment engineering	$$$$$
Cutting Room Specialized training course for cutting room supervisors.	Out of 38 cutting room supervisors evaluated 74% need further training	$$$
Quality This includes invaluable inputs on quality and repair monitoring and measuring techniques	42% out of a total of 129 quality supervisors need specialized training	$$$$

**The $ represents the level of urgency for training. The higher the number of $s the more urgent is the training requirement.

The industry needs to spend money on the people: Caring and training are the main factors to improve factory performance, a new level of expectation is required, it is known that the companies understand the need to improve their performance levels but this will not happen unless management broadens their view of the people. We must accept that people are not "born with knowledge" they have to learn, unlearn and relearn again and need to be treated with respect and understanding.

(Roger Thomas: The author is an International apparel consultant)

Source: AEPC Weekly

'Garment industry continues to lose Rs 120 bn/month' - Mr Mehta, CMAI

'Garment industry continues to lose Rs 120 bn/month' - Mr Mehta, CMAI

Fibre2Fashion
January 05, 2009 (India)

The Indian Garment Industry continues to face the grim reality of continued loss of over Rs. 12,000 crores per month due to compelled cut in production caused by the unending woes of slowdown of the Local and Global Markets, uncompetitive production costs, rising input costs, poor high cost power and unrelenting neglect by the Government even in the “Second Economic Stimulus Package”, said Mr. Rahul Mehta, President, The Clothing Manufacturers Association of India (CMAI).

The average cut in production by the Industry is as high as 15% since September, 2008, forcing high rate of closures and cut in production and employment. It is now feared that the situation will remain the same for the first half of 2009 as no further relief measures are expected from the Government for this fiscal year (ending 2009 March)

The Second Economic Stimulus Package had specifically promised to address the woes of the Textile and Clothing Industry acknowledged by the Government to be worst hit. But, as far as the Garment Industry is concerned, there is complete marginalization in the Package announced, Mr. Mehta lamented.

The Rs. 1,50,000 Crore (35 Billion Dollar) Indian Apparel Industry had high hopes of stimulation of exports by increase in Drawback and DEPB Rates and increase or removal of value caps and restoration of 4% Interest Subvention to pre-September 2008 levels were vital requirements to stimulate Exports which continue to decline for the fifth consecutive month till December 2008, Mr. Mehta pointed out.

One has also to note the serious decline in the target set of 11.62 Billion Dollars for 2008-09 by 24% to 8.78 Billion Dollars in a Global Market of 530 Billion Dollars where India aspires to become a 'Major Player', Mr. Mehta said.What is most regrettable, Mr. Mehta added, is that the Apparel Sector is being neglected in spite of the enormous Employment potential, especially for semi skilled and unskilled Workmen, and Women, and conversely, the potential for Employment loss if the Industry gets deeper in to the crisis mode.

It is alarming that demand shrinkage in US and EU Markets, pressure to cut prices by intense competitive vial Nations armed with higher Export Rebates and incentives like China, Vietnam, Cambodia and Bangladesh would continue to edge out Indian Exporters. Mr. Mehta lamented. In contrast, China has increased its Export Incentives 3 times in the last 6 Months, raising them from 11% to 17%; Pakistan too has announced a R&D Rebate of 6% besides a 2.5% cut in Interest Rates.

The Government must move towards being more “industry friendly” by taking a pragmatic review to ensure survival and growth of the industry expected to become a “major global player”, he added.

Clothing Manufacturers Association of India