Apparel Online India Magazine August 2nd Issue 2018 | Page 9

MIND TREE only way to be competitive is that the Government increases the incentive for industries that employ a large amount of manpower. We have been talking about sustainability for the last couple of years but sustainability in the true sense is being able to manage cost through change without increasing selling prices for customers at this given point of time, else they will move away from India. R Sabhari Girish, CEO, Award Associates, Tirupur/Noida With the increase in prices of yarns and other attributes, it is inevitable that the exporters get a better price from the buyer. This is the first time in the history that TEA has sent a circular like this. Looking at the prevailing retail climate, buyers have been aiming for cost price reduction since the earlier seasons. If we demand 10% increase in price, we will be helping our competitors to grab our orders. It’s high time that the exporters should be looking for the elimination of wastage, increase in productivity and for providing some value additions, like design input and sail through this situation. 1. Cut-to-Ship Ratio: Factories are planning for overall 107% ratio, cutting being 105% and shipping being 97% on an average. With the current situation, we don’t have a luxury of wasting 9% to 10% which is really huge. The rejections should be eliminated and the cut-to- ship ratio should drastically narrow down. 2. Strong Exchange Rates: Strong currencies are another boon, where on an average, there is an increase of approximately 5% on the major currencies, compared with the same season last year. 3. Good IE Practices: We are still way behind on efficiency. The current efficiency is less than 40% for most of the factories and this is a reason for higher concern. We are well below the global benchmark; only by following proper IE practices will we be able to improve the productivity. If the efficiency is brought to 60%, the turnaround will be made quicker and the same can improve by 33%, the profit too increases. Virender Bakshi, Country Head, Sergent Major, Tirupur In the present scenario the exporters have already been hit by many reasons like recession/ low demand in buying countries, funds blockage due to their GST refund delay, higher or increasing labour cost, increased or unstable cotton or yarn prices, reduction in these incentives or duty- drawback disadvantage or uncompetitiveness in front of other neighbouring textile exporting countries due to their low labour cost and also the FTA advantage which they have over India. Definitely increasing price is not at all a good solution as no buyer will pay a higher price when they get the same item from our neighbouring countries at a lower price, that too with duty-free import into Europe. I am sure exporters must be doing their best to streamline and eliminate the losses in the supply chain, and some of them must have already done that. In the present scenario, I do not see any alternate or a good solution, except to look for alternative and new markets; making presentations to the Government, and requesting them to provide export finance against orders at more competitive rates. Also rationing of raw cotton or even yarn exports can be made so that we stay competitive. The Government can also be asked to increase the incentives against exports and put FTA into existence for textile alone in a cluster manner without waiting for total FTA implementation. Meenu N Bhat, Tannvi Impex, Noida My suggestion is to first prepare customers for this increase with sufficient reasoning and some proofs so that preparations can be made. The need is to divide this into two phases with some time period. In the first phase, let TEA examine if price increase proves beneficial to the manufacturer, and based on that introduce the next phase NEXT MINDTREE QUESTION From the general buzz in the industry, picked up from various exhibitions and industry events, it appears that there are many orders in the market and exporters can easily pick up work, yet this is not happening… Why? What is stopping companies from picking up fresh orders… Is the positivity more perceived than real? and move further with time and situation, else switch back to the old rates. Rajendran, Adarsh Knitwear, Tirupur This price rise is an international problem and wherever the buyers go, they will have the same problem. I am sure buyers can accommodate this price and increase the retail price accordingly. Vivek Saxena, Director, Moissanite Apparels, Noida Increasing prices is a wishful thought of ‘Indian exporters’, but during my personal visits and meetings with buyers in the months of May and June, in Madrid, New York, Shanghai and Hong Kong, no buyer was willing to increase any price. Buyers are rather ready to easily move the orders to Vietnam, Cambodia, Indonesia, Myanmar, and Bangladesh at the drop of a hat. There have been so many articles and lectures by eminent economists of our country, stating that ‘curbing imports alone will not help, it is only by increasing exports that we will be able to survive’. The news of the US $ 17 billion deficit in trade in the month of June ’18, should be another warning signal for all. This can be a topic of endless discussion, but eventually the policymakers will have to find a way out! POST YOUR COMMENTS www.apparelresources.com [email protected] www.apparelresources.com | AUGUST 16-31, 2018 | Apparel Online India 9