Garment exporters hit by rising rupee
11 June 2014
domain-B, India
The impact of the rising rupee is serious on exports. A garment export hub, is losing as much as Rs2 crore a day reports CNBC-TV18.
Premal Udani, managing director, Kaytee Corporation, is one of Tirupur’s largest garment exporters but he hasn’t got a single profitable order in three months. He’s even had to reduce order sizes from regular customers. And even though the crucial spring-summer 2014 orders will soon pour in, Udani cannot expand.
“This factory has 400 machines. I’ve made provisions for 500. As a matter of fact, I have already placed the orders for the machines. But with the sentiments turning completely negative, I’ve put this on hold because I don’t want to add more machines when I don’t know whether, in couple of months I will be able to feed the lines I have,” says Udani, Last year Tirupur did business of Rs11,000 crore. Now it’s losing Rs2 crore each day. That’s because of rise of the rupee has compounded the profitability woes to the wafer-thin margins in a post-quota world. Exporters say this leaves them little room to improve efficiency.
“This blow has been like a tsunami to us. At least if there was a warning, we could have prepared for it, But now even without a warning, this blow has happened,” says R Shanmugam , managing director, Classic Polo.
Some exporters are trying to move up the value chain by experimenting with organic cotton and embroidered garments
It’s been a long hot summer of discontent here in Tirupur with the ever-rising rupee. But hopefully, the first showers of the season have brought with them the
realisation that if garment units such as this one want to
survive into the next decade, they will have to re-invent themselves, possibly by producing more value-added products.
But that might not be easy in an industry that has become so commoditised. Now the exporters hope the RBI will rescue them.
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