{"id":3443,"date":"2000-11-20T10:51:00","date_gmt":"2000-11-20T10:51:00","guid":{"rendered":"https:\/\/www.thirdeyesight.in\/?p=3443"},"modified":"2022-11-09T06:40:59","modified_gmt":"2022-11-09T06:40:59","slug":"unzipping-garments","status":"publish","type":"post","link":"https:\/\/myechoproject.com\/TES\/unzipping-garments\/","title":{"rendered":"Unzipping Garments"},"content":{"rendered":"\n

It’s been the zipper that always stuck. \n No matter what they tried. For the big names of textile industry, \n the reservation of garments for the small-scale sector has been \n the one issue on which all their plans for making it in the \n Rs.25,000-crore segment snagged. So, when the government, after \n much dithering, announced a new textile policy that opens up \n the garments sector, the response has been ecstatic. <\/p>\n

“We can at last increase our capacities and invent more in \n our captive suppliers,” says Nabankur Gupta, group president \n of Raymond India. The Rs.2300-crore company is hoping to stitch \n up a larger share of the Rs.600-700 crore branded menswear domestic \n market than it has. Raymond, which has around 30% of this market, \n has its eye on the unorganised segment. This market is largely \n supplied by small units. <\/p>\n

Although large companies, usually the composite textile mills, \n could set up garment units earlier, any investment above Rs.3 \n crore (the SSI limit) invited an export commitment of 50% of \n production. This put pressure on garment makers like KG Denim, \n although established players like Arvind Mills skimmed along \n with global alliances. Another fallout? The wide gap in the \n quality supplied to the domestic market and for export. But \n all is set to change with the announcement of a more pragmatic \n policy. Says an elated Nitin Mohan, director of Blackberrys, \n the Gurgaon-based manufacturer know for its trousers, suits \n and blazers: “This means we will able to get in the technology \n upgrades we’ve wanted. CAD\/CAM and finishing equipment will \n come in, making the sector more competitive.” <\/p>\n

\n\n <\/div>\n
\n

But already, the euphoria over the new textile \n policy is evaporating as industry takes stock of the problems \n looming over it. Labour, for one. From traditional millowners \n in the south to recent entrates in the garment market, there is \n unease over outdated labout regulations that are stifling the \n industry. “The dereservation is welcome,” concedes Krishnaraj \n Vanavarayar, managing director of Sri Sakthi Textiles. But nothing \n much will change as far as investments are concerned, he warns. \n

The former chairman of South India Mills Association believes \n that although the bigger domestic players might benefit to some \n extent, no foreign direct investment will be made unless labour \n regulations such as the Industrial Disputes Act are overhauled. \n His contention: the textile industry is labour intensive but \n productivity is abysmal. <\/p>\n

Mohan of Blackberrys shares this concern and says changed \n labour laws are on everyone’s wishlist. “This like any other \n business, has good times and bad. So we would be allowed to \n hire contract labour. People do so, but it leads to complicated \n paperwork,” he says. <\/p><\/div><\/div>\n

In an industry which is the largest employer (18-20 million \n workers) in India, such concerns are not misplaced, specially \n since the government is blithely talking of pushing up textile \n and apparel exports from the present $1billion to $50 billion \n by 2010! And garments will account $25 billion. Most industry \n experts believe this optimism is absured in the current context \n (see graph).
\n <\/p>\n

\n \n <\/div>\n
\n\n

FDI would be vital for achieving even modest \n targets. China’s garment exports of $32 billion account for the \n bulk of its textile exports of $45 billion, with 40% of the earnings \n coming from joint ventures involving FDI. \n

But things may change with the new policy. Garments being \n a hot-growth area, the big boys will be flexing their muscles, \n making the outlook for smaller players less rosy. ‘Whether it \n is garments or cloth, players like us will be the chief beneficiaries,” \n says Raymond’s Gupta. And there will be more acquisitions like \n Madura Garments by the AV Birla Group, leading to the possibility \n of a shake-out. <\/p>\n

It’s not as if all is lost for smaller firms. Industry experts \n point out that smaller players have undeniable strengths. International \n management consultant Roland Berger & Partners, which was \n commissioned by the Confederation of Indian Industry to access \n the competitiveness of the textile industry, points out that \n small units have a higher degree of flexibility and lower production \n costs. <\/p><\/div><\/div>\n

In fact, Devangshu Dutta, director of a company sourcing and \n procurement for the apparel industry, thinks the two sides are \n almost evenly matched. “Garments is a complex business and scale \n is not the only factor. Smaller players can be more nimble and \n cut costs,” he says. Some, however, aver that diversity becomes \n a casualty as small units cannot produce the fabric range that \n big companies can. <\/p>\n

Dutta also believes there has been too much emphasis on equipment \n and not on processes. “Garment units need to invest in product \n development,” emphasises this former textile consultant. <\/p>\n

This means design, and understanding the retail process. Sizable \n investment has to be made in these to reach some level of competitiveness. \n “Despite high costs, manufacturing still thrives in the US and \n Europe. That’s because the players understand the home market \n well, thanks to investment in the so-called softer aspects,” \n says Dutta. <\/p>\n

However, the increasing emphasis on design, newer fabrics \n and greater flexibility has left Indian garments literally on \n the shelf. The growing number of styles and collections required \n each year call for shorter lead times – the time from design \n to sample and through to delivery – making it tough for smaller \n players to enlarge market share. <\/p>\n

So, what would be the shape of things to come? Would the many \n regional but highly successful brands in the country be cut \n to size? Or would they lose their identity in a flurry of mergers \n and acquisitions? The last is a distinct possibility, although \n some consultants appear to think there will be JVs, but primarily \n in branding and marketing. <\/p>\n

As for FDI, Gupta believes that there’s not much that MNCs \n will gain by coming here. “Since Indian firms are supplying \n finished products to global brands like GAP and Boss, I don’t \n see what they’ll gain by coming here,” he says. But it’s early \n days yet. The consensus is that garment manufacturers might \n still be able to sew up the market if the bigger knots are unravelled \n in time. <\/p>\n

By Pallavi Bhattacharjee (with reports from \n M. Anand)
\n (Published with the permission of Business World ) 20 Nov 2000. \n
\n <\/p>\n","protected":false},"excerpt":{"rendered":"

It’s been the zipper that always stuck. No matter what they tried. For the big names of textile industry, the reservation of garments for the small-scale sector has been the one issue on which all their plans for making it in the Rs.25,000-crore segment snagged. So, when the government, after much dithering, announced a new […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"content-type":"","footnotes":""},"categories":[1],"tags":[],"class_list":["post-3443","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"yoast_head":"\nUnzipping Garments - Third Eyesight<\/title>\n<meta name=\"robots\" content=\"index,follow\" \/>\n<link rel=\"canonical\" href=\"https:\/\/myechoproject.com\/TES\/unzipping-garments\/\" \/>\n<meta property=\"og:locale\" content=\"en_GB\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Unzipping Garments - Third Eyesight\" \/>\n<meta property=\"og:description\" content=\"It’s been the zipper that always stuck. No matter what they tried. For the big names of textile industry, the reservation of garments for the small-scale sector has been the one issue on which all their plans for making it in the Rs.25,000-crore segment snagged. 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