Financial Daily from THE HINDU group of publications
Saturday, Sep 07, 2002
Industry & Economy
Southern comfort for leather garment exports
S. Gopikrishna Warrier
CHENNAI, Sept. 6
EVEN while the exports dropped, a focus on the middle to higher segment has helped leather garment manufacturers from the Southern States to fare better than their counterparts from other parts of the country.
Though the final figures are yet to be compiled, the Council for Leather Exports (CLE) estimates that from April to August garment exports have dipped between 20 and 25 per cent from the corresponding period of the previous year.
However, the drop from the South has been only 10 per cent.
While a majority of the garments exported from the South is manufactured by units around Chennai, there is also significant contribution from units close to Bangalore. Most of the exports from the rest of the country come from units around Delhi.
According to Mr S. Audiseshiah, Executive Director, CLE, approximately 50 per cent of the leather garment exports come from the southern centres and 40 per cent from Delhi. The rest is from small production clusters around the country.
The pressure on garment exports had come due to drop in imports from the US, Germany and UK, compounded by increased pressure from Chinese products in the lower price segment.
The products priced above $60 FOB value have not been affected as badly as those priced less than that.
Since the southern manufacturers have historically been producing in the mid to higher segment, they were as badly affected, he said.
According to Mr Mohan Sreenivas, CLE committee member on garments, the last few months have been a period of uncertainty, with orders received not matching the projections that were made.
"We hear good projections for the coming season beginning end-September, though we do not know if the orders will match them," he said.
The American market has taken a beating since 9/11 incidents, he said.
However, even as the American imports of leather garments declined by 12 per cent, Chinese exports to the US increased by 15 per cent, indicating that it had been eating into the share of other countries.
Another trend, according to him, is that some of the larger European buyers, who have been historically buying from India, are moving to China for their supplies.
However, the manufacturers from the South are not too badly affected by this since the importers' interest in China is for the lower to mid price segment.
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