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Rediff.com  » Business » Covid cuts Tirupur garment hub biz, 10% orders go to other nations

Covid cuts Tirupur garment hub biz, 10% orders go to other nations

By Shine Jacob
July 27, 2021 09:32 IST
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The industrial belt has seen a production loss of about Rs 10,000 crore during the last two months due to stoppage of manufacturing.

Tirupur

IMAGE: Once an export hub, Tirupur is today a ghost town. Photograph: A Ganesh Nadar/Rediff.com

India’s largest garment hub Tirupur continues to reel from the effects of the pandemic, with almost 10 per cent of its orders for the upcoming season getting diverted to Bangladesh, Vietnam, Cambodia and China.

The sector had seen a drop of about 9 per cent in exports during the first wave, but the impact is likely to be more this time, according to industry experts.

 

Being one of the epicentres of Covid cases in the state, a majority of manufacturing units in the textile belt were closed for almost six weeks during the second wave.

According to Tirupur Exporters’ Association, the industrial belt has seen a production loss of about Rs 10,000 crore during the last two months due to stoppage of manufacturing.

The Tirupur garment industry’s earnings from exports have dipped from a historic high of Rs 27,500 crore in 2019-20 to Rs 25,000 crore in 2020-21.

“We couldn’t make the samples for one or two seasons.

"These orders and also those cancelled due to the lockdown during the second wave have gone to Bangladesh, Vietnam and Cambodia.

"During the second wave, our competitors were open and hence, the European countries and the US have naturally opted for them,” said Raja M Shanmugam, president of Tirupur Exporters’ Association.

Based on data available with the Export Promotion Bureau of Bangladesh, the country has seen a 13 per cent surge in garment exports during the financial year ending June this year (July 2020 to June 2021).

“I believe that the impact for the entire Tamil Nadu was minimal as the exact period of closure for the textile industry was only seven days.

"The scenario with Tirupur’s garment industry might be different, because of the larger number of Covid cases from there.

"More markets are showing interest in Bangladesh because of their prices and duty structure variation,” said K Venkatachalam, advisor at the Tamil Nadu Spinning Mills Association (TASMA).

According to experts like Venkatachalam, the major reason why the Eurpoean countries are opting for Bangladesh is the 30 per cent difference in pricing compared to India.

“Though we were closed for two months during the first wave, we were able to regroup because of the vibrancy of the industry.

"Now, global perception for the attire segment has changed and there is much more demand for casual wear due to the work from home culture. That way it got benefitted,” Shanmugam said.

According to government estimates, there are about 10,000 garment manufacturing units in Tirupur employing over six lakh people.

The textile cluster exports are pegged at Rs 2,500 crore a month, while including domestic sales, it comes to around Rs 5,000 crore.

A major challenge that the garment units faced during the second wave was staff shortage, as 20 per cent of their employees did not return after the lockdown, expecting a spike in the number of cases.

To make matters worse, the industry’s input costs, cotton prices in the domestic markets have gone up from Rs 35,000 per candy (each of 356 kg of processed ginned 29.5 mm cotton) in October 2020 the beginning of the season — to Rs 55,000 per candy now.

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Shine Jacob in Chennai
Source: source
 

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