Tirupur cos weave domestic dreams to beat Re surge

It is not always that the turf at home is greener. But, a surging rupee appears to have done just that for knitwear players in Tirupur. Textile and apparel companies from the region, which flourished on exports for years, are now turning their focus homewards. Bitten hard by the appreciating rupee these companies are drawing up elaborate maps to increase their reach within domestic shores.

Though a complex transition, the high demand of the festive season seems to have made the road somewhat easier. So, while the exporters are still searching for light at the end of the tunnel this Diwali, those who have turned their focus to the domestic market are raking in the moolah. Key factors driving domestic demand are a growing youth population, rising household incomes, increasing consumer spending and rapid growth in organised retailing. There was a time when Tirupur products were not available in plenty in the home market. The scene has changed dramatically with large retail outlets, today, selling Tirupur cotton products. Alongside, apparel makers are driving the retail boom with their own retail ventures. Exporters who had initially visualised retailing to be just an additional line of revenue contributing less than 10% of turnover, are now reaping a windfall buoyed by the increasing domestic demand. Most garment exporters have ventured into the business of domestic retailing as it offers better margins and allows them to stay in direct touch with customers.

M S Vasant, Head — Retail Division of the Rs 225-crore Royal Classic Group, told ET that though his company had planned to set up 20 stores within a year, it ended up setting up 28 stores in 10 months. The company is aiming to open 100 stores across India this fiscal. SP Apparels (SPAL) MD P Sundararajan has earmarked Rs 30-40 crore for its retail roll-out. Adds SPAL chief financial officer Stanley Jothiraj: “It is a volume-driven game and we have to expand fast to keep pace with others”.

A Technopak study says apparel retail has grown from Rs 65,000 crore three years ago to more than Rs 1 lakh crore today. With the sector registering a 15-16% growth per year, it is estimated that the apparel retailing sector will double in the next five years. With a strong growth in home market, branding and retailing have become the order of the day. Some of the leading textile units in the Coimbatore region are now focused on acquiring or building a brand in the domestic market. Most of these units are into exports now and have an integrated production facilities.

SP Apparels (SPAL), a garment exporter here, is on the prowl for acquiring a kidswear brand. The company recently acquired Crocodile and Natalia brands. Industry sources said, Brandot International is finalising a joint venture with the Bannari Amman group to set up an export garmenting facility at Chennai. Sources indicated that Bannari would be launching their own brand in the premium women’s innerwear segment.

source : Economic Times

Textile, apparel sourcing set to rise 12 per cent: CII-E&Y report

Confederation of Indian Industry-Ernst & Young’s textile and apparel report 2007 has forecast a higher growth trajectory for India’s textile and apparel sector with sourcing from India by global retailers set to increase at a combined annual growth rate of 12 per cent.

The expected sourcing market in 2008, which is anywhere between $22-25 billion, is projected to go up to $35-37 billion by 2011. The trigger for this growth is likely to come from top global retailers who will seek to take advantage of India’s abundant multi-fibre based raw material, well established production bases, design capabilities and knowledge/skilled labour.

The Government’s pro-textile industry initiatives too will give fillip to retail sourcing from India, said the CII-E&Y report ‘India in Global textile econ-system’ released at the ‘CompTex 2007’ textile conference here today. Of the $49-billion textile and apparel industry, the domestic industry accounts for $30 billion and the remaining is accounted by exports.

Most Indian textile companies are expanding capacities across value chain in areas like design, yarn, fabric, garments and retail forays. Globally, the textile and apparel sectors on consolidation are also shifting to Asian countries and this has brought challenges and opportunities for the Indian textile industry, said Mr Ranjan Biswas, Partner and National Leader, Retail and Consumer Practice of Ernst & Young India.

The CII-E&Y report forecast the global textile/apparel trade to grow from the present $450 billion to $700 billion by 2010 and the demand for apparel and woven textiles to grow by 25 per cent to about 35 million tonnes by then, of which 85 per cent would be sourced from Asian countries. The sector wise advantage for India is its strong position as the third largest cotton producer in the world and it accounts for 22 per cent of global spindleage and 61 per cent of global loomage.

Challenges ahead
On the challenges for India’s textile and apparel sector, the report notes it has to face competition from several low cost countries including China, Turkey, Vietnam, Pakistan, Sri Lanka and Bangladesh. Low productivity, technology obsolescence, strong rupee leading to smaller orders and low prices are constraints affecting the Indian exporters.

Its share in higher value-added industry such as fabric and apparel works out to only 4 per cent of the global output. Europe still constituted India’s major export market with 22 per cent of its textiles and 43 per cent of apparel exports going to this market (2006-07). The US continued to be the single largest buyer of Indian textiles and apparel at 19 per cent and 32.6 per cent respectively.

Source: IBEF

Rupee impact being studied: DGFT

The Directorate General of Foreign Trade (DGFT) is carrying out a survey to assess the real impact of rupee appreciation on various industries, a top official has said.

The DGFT, under the commerce ministry, would study the problems being faced by industries and submit its report within a week to the Centre, R S Gujral, Director General, DGFT, said.
Addressing an open session organised by Tirupur Exporters' Association (TEA) last evening here, Gujral said that a study conducted last July had revealed that there was a decline in orders in the apparel industry.

There was a decline in seven sectors, including tea and apparel in July, while moderate drop in growth of several other industrial sectors was noticed in August, he said. Though the commerce ministry had two months ago recommended an interest rate cut by four per cent, the finance ministry had announced only two per cent cut, he said.

"In view of further appreciation, we suggested to the Government to cut the interest rate further," he said, adding, "We also seek exemption of service tax for 10 other categories besides the seven already announced."

A Shaktivel, President, TEA demanded that the Government bring down the interest rates to six per cent and exempt exporters from paying sales tax and fringe benefit tax.

source : Business Line

India to emerge as sourcing hub for global retailers

The Indian textile and apparel industry is poised to emerge as a sourcing hub for global retailers, given the abundant supply of fibre, well established production base and cost competitiveness, a CII-E&Y study has said. The sourcing market is projected to grow to $35-37 billion by 2011 from the current $22-25 billion, the CII - Ernst and Young Textile and Apparel Report said.

Identifying sourcing as a huge opportunity for India, the report said phasing out of the Multi-Fibre Agreement triggered growth in the quantum of sourcing of top global retailers for the country. "India has several advantages in terms of abundant supply of cotton and man-made fiber, well-established production base, cheap and skilled labour and good design capabilities," the report said. Besides, government incentives to exporters and entry of foreign retailers into the domestic market would also boost retail sourcing from India. "These are exciting times for the sector.

Globally, there are clear indications that textiles and apparel production is consolidating with production shifting towards Asian countries," E&Y India Retail and Consumer Practice, Partner and National Leader Ranjan Biswas said. The report further predicts that the Indian textile and apparel market would grow annually at 6.5 per cent, driven by a favourable domestic environment of rising household incomes, increasing consumerism and rapid growth in organised retail.

Exports would also grow annually by 12 per cent with international retailers looking at India as a viable alternative to China for sourcing of apparel.

source : Economic Times

Textile exports may get dedicated hubs

The government is considering setting up dedicated textile cargo handling facilities at major international airports and sea ports. “We, along with the export promotion councils, have identified international airports and sea-ports where we plan to develop dedicated facilities for handling textiles cargo. We plan to put up such facilities for apparel export and import cargo at Jawaharlal Nehru Port Trust (JNPT) Mumbai, Mumbai port, Chennai port and the Tuticorin port. International airports such as Delhi, Mumbai, Chennai and Bangalore would also have dedicated textile cargo handling facilities,” a government official said.

The proposal follows directions from a group of ministers (GoM) panel, set up to boost textile sector growth. The GoM included agriculture minister Sharad Pawar, finance minister P Chidambaram, textile minister Shankarsinh Vaghela and commerce minister Kamal Nath. GMR group-led consortium, which is modernising the Hyderabad airport, has earmarked 250 acres near the airport to develop as multi-product special economic zone (SEZ). Industry sources said the multi-product SEZ would focus on textile, perishable items such as flower and vegetables and electronics with emphasis on avionics and aviation components. Meanwhile, the textile ministry has also suggested having uniform tariff rate across all the ports and making container weightment facilities inside port before loading mandatory to improve the cargo handling capacities at existing ports.

The move comes in the wake of government’s plan to increase the textile market in the country to $115 billion by 2011-12. It expects to earn $55 billion from export by then. The textile ministry aims at having 7% market share in the global textile and clothing merchandise by 2012. During this period it hopes to create 12 million additional jobs in the textile industry and other allied sectors. Presently, the total size of the textile industry in the country is pegged at $47 billion — $30 billion of domestic and $17 billion of exports. As per an estimate, the industry would require an investment of Rs 1,50,000 crore in the next five years to achieve the set target.

courtesy : Economic Times

T-shirts for the 2008 Euro Soccer World Cup

Santosh Garments, an apparel manufacturer in the textile town of Tirupur in Tamil Nadu, has bagged orders for a million T-shirts for the 2008 Euro Soccer World Cup.
The manufacturer is busy executing the orders for the event to take place in Switzerland and Austria.

Nearly 500,000 T-shirts have already been made, and the company is expecting the rest to be completed by the year end.

Santosh Garments Managing Director C. Udaya Shankar said they have been making soccer T-shirts for the past four years."We make polyester and cotton T-shirts. Nearly, half a million pieces are now in my hand for the order, and I expect another order of half a million T-shirts. I am proud of football matches (and I hope) to continue to receive orders for my company," said Shankar.The logo of the Euro Cup is emblazoned on the front of the T-shirts, with a list of stadia where the finals are to played printed on the back.T-shirts are available in black, white, navy blue, green and red.

Santosh Garments Technical director Vinoth Kumar said their brand has made a name for itself in the international market, specialising in polyester and cotton T-shirts.
"So far, no one in Tirupur has done 100 per cent polyester. We have tried it and succeeded. It became a big advantage for us and the company has been noted in the world and particularly in the Europe market," said Kumar.The product of Santosh Garments has been approved by the Adidas, a German sportswear giant.

Tirupur is a major hub for knitwear industries in India. Exports from Tirupur have registered a figure of over one billion dollars in 2004 from eight million in 1985

courtesy : THE HINDU

5 Lakh rural youth to be trained in apparel sector

IL&FS Cluster Development Initiative (IL&FS CDI) has embarked on a massive programme to train five lakh unemployed poor youth from rural parts of the country by partnering with technical institutions across the country and funding from the Union Rural Development Ministry, G. Somasundaram, regional manager, South India, IL&FS CDI, has said.

The programme would address shortage of skilled manpower in the apparel industry, Mr. Somasundaram said. The objective of this ambitious programme was to train five lakh youth who were below the poverty line, in the next five years in different categories of shop floor level workers.

IL&FS will provide machinery, technical know-how and training to the trainers under this project. The District Rural Development Agency would identify candidates.
Tirupur-based NIFT-TEA Knitwear Fashion Institute has signed a memorandum of understanding with IL&FS CDI to be the training partners and to establish five centres across Tamil Nadu.

According to M. Madhavan, Registrar of NIFT-TEA Institute, the institute had already established one each at Tirupur and Coimbatore. The three will come up in Chennimalai, Karaikkudi and Sivaganga.

There will be no fee for the one-month course for sewing machine operators. The three-month course has been altered into a one-month course with the help of multi-media equipment.
The productivity-linked training programme would help garment factories to improve productivity, Mr. Madhavan said. Tirupur Exporters’ Association has come forward to absorb as many as one lakh trainees in a year.

A total of 100 youth between the age group of 18 and 35 will be trained every year.

EU industry tops €200 billion

The EU25's clothing, textiles and manmade fibre industries had a combined turnover of €201.9 billion in 2006, according to Euratex - the European Apparel and Textile Organisation.
Of this figure, textiles accounted for around €114 billion, clothing for €77.8 billion and manmade fibres for a further 10.1 billion.

Investment by the industries amounted to just over €5 billion last year and the number of people employed was over 2.1 million.The EU25's exports were worth €38.7 billion while imports were worth €81.1 billion.

Leading importers of textiles to the EU25 were China (21.9%), Turkey (15.1%) and India (10.4%), while the leading export destinations for EU textiles were the US (12.3%), Romania (10%) and Turkey (7.3%).China was also the leading importer of clothing to Europe (31.4%) followed by Turket (14.9%) and Romania (6.7%). Leading EU-produced clothing destinations were Switzerland (17.1%), the USA (13.7%) and Russia (11.3%).

Hohenstein to celebrate opening of new office in Tirupur

Hohenstein India Pvt Ltd has organized a get together on the occasion of opening of new branch office in Tirupur.This event will be held on August 28 at Hotel Velan in the city and will be followed by a grand dinner.

Lutz Seifert, Head of Corporate Development, Hohenstein Institutes and Jacob Kutty, Country Manager, India, will be present here, along with Bhaskar Bhaktavatchalu, Manager of Tirupur branch office.Information will be provided on the latest developments in the Oeko Tex Standards and Oeko Pass - certification for dyes and chemicals used in the manufacture of Oeko Tex products.