Apparel Online India Magazine August 2nd Issue 2018 | Page 8

MIND TREE

Q-and-A

A few days ago , Tirupur Exporters ’ Association ( TEA ) requested its members to ask their buyers to increase the garment prices by 10 per cent as overall costing is increasing . TEA felt that the continuation of the same prices would certainly lead to a more difficult situation making it less viable for exporters to sustain in business . Top sourcing professionals are of the opinion that such initiatives will not solve any problem and might make them more worse . Orders will drift away from India if buyers feel prices are increasing . Suppliers must , therefore , work towards streamlining and eliminating losses in the supply chain .
Being a stakeholder of the industry , how do you see this issue ? What can be the plausible solution …?
Vijay Jindal , SPL Limited , Faridabad
We are in a market which is facing global competition , so asking to increase the price can make business slip . So , rather than increasing the price , we need more support from Government to increase RoSL and duty-drawback rates to 5 % which industry is demanding .
Vikram Jit Singh , Director , Fiori Creations , Faridabad
It is oft-repeated and absurd demand . Let me begin with two simple questions . When was the last time you worried that your mobile plan from your telecom company could be making loss for the company ? Would you pay more than other available plans to ensure your service provider makes a fair profit ? Your answers will be ‘ Never ' and ‘ No ’, respectively . In theory , our customers should pay a fair price considering their requirements whether it is design , compliance , quality , or environmental standards . Those who want us to hold to certain behaviour must be willing to pay for the privilege of assuring their customers that their entire supply chain operates in a certain way . However , as we
all know , in reality , it is simply ‘ might is right ’. Orders get placed based on ‘ cents and not standards ’. Sufficient paperwork is generated on file to show adherence . Any deviation can simply be blamed on the factory later . We are competing in a globalised , fiercely competitive open market . The ways to approach it is to work on speed , cut waste and develop niches . That will pay off , either in savings or higher prices . The other sensible option is to leave those orders where there is no profit . Try that for a change .
G . Manikandan , CEO , Apparel Global Consulting , Cossmo Tex , Tirupur
I would certainly not say that the request by TEA will make a negative impact on export sales . However , 10 % is not a wise thing . More importantly , we dearly need to address the internal costing factors seriously as there is no mechanism to control these . Yes , it is high time to look at our supply chain and manufacturing efficiency . The unseen margin is to be found by us and not by customers since their economy is not doing better than us to absorb higher prices . More chances are that they will look for new avenues to source their demand .
SP Mundra , MD , Rajat Collections , Bangalore
I perfectly agree with the view that any increase in the selling price will completely jeopardise the already dwindling exports . The prices from our emerging competitors are lower . please take a survey of prices in Cambodia , Vietnam etc ., and one will see what we are staring at . In addition , the overseas buyers nowadays are extremely smart . They keep a tab on our falling rupee and immediately pounce on us to reduce the prices ! Where is the question of an increase ? With several overseas buyers having their buying agents in India , these buying agents are also guilty of keeping the buyers educated on the exchange rate scenario .
M . Ganesh Babu , Proprietor , Sudarsan Clothing Co ., Tirupur
This move is undoubtedly a good one . Tirupur garment exporters are providing such quality and services to command that 10 % premium from the buyers . And now that the price increase is an index , we exporters will be able to pocket it . Fashion is variety . I have never seen two people in the same kind of outfit . So
as long as this remains true , Tirupur ' s garment production will remain indispensable in the world of textiles . For our strengths lie in small quantity runs , short deliveries , multiple tires of sampling and coping with last minute changes . All this , however , means spiralling fixed overhead costs to run our factories . The Government too needs to develop a consistent policy towards garment exports . Most part of this regime was spent neglecting exports , saving on its sops and pleasing the WTO . After the failed FDI attempts , the Government is knocking at our doors once again . The duty-drawback needs to be increased to at least 5 % overall . Otherwise we garment manufacturers will be left with no other choice but to look at Ethiopia or Vietnam to build additional capacities .
Zahir SAIT , International Trading Company , Tirupur
The textile industry is the only industry which shifts its country according to cost . Increasing the selling price by 10 % is not going to solve the issue of being competitive . Tirupur is known for its mass market clients who are very price-sensitive and is also not popular for valueadded products . I believe the
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