Recession hits garment industry

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Recession hits garment industry

By Satish Shile, DH News Service, Bangalore:

The economic recession has hit all the sectors and garment sector is no exception. Dip in demand for garment products from overseas coupled with decrease in purchasing power of domestic customers has hinted at turbulent days for the industry in the near future.

Textile merchants in Bangalore say that they are not sure of getting assured business in the weeks to come. The sales during Dasara and Deepavali last month was lesser by about 20 per cent compared to sales in the previous year. The worst hit are those into export business. A majority of the exporters are left with only work orders which can keep them busy only for a couple of weeks. Garment owners feel that in the present circumstance only those who are into manufacturing of quality goods can make good profit. Jitendra Dugar, CFO of Go Go International Pvt Ltd, which exports garments to US and European countries, said China is the biggest exporter of garment products in the world. In the recent days a few overseas customers switched over to Indian market as China goods as costlier to Indian products. To a certain extent this move has saved native traders. “Only those who produce high-quality products and ready to sell them at competitive price can make profit out of the situation”, he said. H S Devprasad, General Manager of Proline India Limited, said value of dollar has gone up in the recent days. Merchants with export orders will be earning more than what they expected. Where as those who import raw materials will have to lose more money. “Customers in India are worried over many factors due to economic recession. Due to increase in interest rate on loans number of equated monthly installments (EMI) have gone up. We can’t expect him to spend money on clothes”, he said. Decrease in sales Many merchants are of the opinion that decrease in domestic sales began by the end of September itself. In October sales were low. Sajjan Raj Mehta, president of Karnataka Hosiery and Garments Association, said following the recession priorities of customers have changed. Those who used to purchase two trousers for a festival either reduced it to one pair or decided not to purchase at all. “Denial to pay bonus to employees, cuts in salary, retrenchment are reasons for compromising the purchase”, he added. Pravin Mutha, director of Bafna Clothing Company, says his company has export orders till February 2009. But he is worried about the future. “Usually we plan our business six months in advance. This time it has been difficult for me”, he said. Panduranga of Jorange Fashion on Lalbagh Road in Bangalore said sales in his shop has come down by 50 per cent in the last two months. All that he can expect from the state government in the present situation is exemption of 4 per cent VAT on garment products, he said. Recession good There are a few businessmen who find economic recession is good for the industry. Venkatesh, owner of Immense Clothing Company feels this is the time for businessmen to review the way they have been doing their business and economic recession is somewhat a speed breaker. “Take my own example. Earlier I had not done market study. After I got the hint of recession I did a study. Later I changed my purchase pattern. This has definitely improved my profit. I am confident that I can face it. So far there has been no problems for my industry”, he said.