Tamil Nadu   

Tirupur passing through a rough patch; falling dollar spares none

Difficult times: Many units that used to work up to 1 a.m. now down shutters by 6 p.m.

TIRUPUR: The knitwear hub of Tirupur, which lost its precious business primarily to Bangladesh in the last couple of months because of the depreciation of dollar against the rupee, is going through a rough patch.

Though the appreciation of rupee against dollar by over 12 per cent in a year has almost demoralised the business community here.

Sheer entrepreneurship and enthusiasm kept them going all these days. Some of the firms got orders for autumn/winter season.

Currency volatility has affected mainly those who are doing business with the U.S. Those catering to the European market and doing business in euro and Sterling Pounds are spared.

This has resulted in overhauling of the business by cutting overheads and reducing production cost. Representations were made to the Union and State Governments to grant sops to the industry.

The worst affected were job-workers, including knitters, dyers, collar makers and those in the printing units.

Spinning mills, which saw a robust business till recently, have been facing cash loss because of the slump in yarn prices while cotton prices are going up.

“For the first time in my career, I am heading for a negative growth. I am afraid our turnover may not exceed Rs. 50 crore this year against the Rs. 65 crore in the previous year,” said E. Palanisamy, chairman of Armstrong Knitting Mills (AKM), who has been in the business since 1978.

Some of his major buyers from the U.S. have taken away the bulk orders to Bangladesh while others have cut down their orders, he said. .

Most of the major export houses that deal with the U.S. have reduced their staff strength too. The AKM axed 80 merchandisers, quality checkers and other administrative staff. Slowdown in the U.S. market has led to less spending on clothing too.

Big export houses managed to book orders sacrificing their profit. But the smaller ones, who depend on the spillover orders from big companies, are left in the lurch.

“We have started concentrating on value added and fashion items that will fetch us reasonable profit. We can no more compete with China or Bangladesh in producing basic T-shirts that normally come in huge quantities,” said C. Ramesh of Creative Tex whose turnover touches Rs. 9 crore a year.

Bangladesh, which depended on India for raw material and other resources, has emerged a favourite destination for leading brands and chainstores in the U.S. and Europe. Besides currency advantage, exemption from import duty too attract buyers.

Workers in many factories are losing wages. Chinnathambi, a tailor from Kumbakonam, said he used to earn Rs. 1,800 a week and nowadays he was getting less than Rs. 1,600 a week.

“Normally we work for 12 hours and some times for 16 hours. Now there is no such urgency to execute orders,” he added.

R. Gopal of Esteem Knitwear said that European buyers too wanted to do business in dollar. He says normally during November and December his company works up to 1 a.m. “The units now down shutters by 6 p.m..”

Stating that nearly 8,000 workers have lost their jobs, Tirupur Exporters’ Association president A. Sakthivel said that if the trend continued nearly 50,000 workers would lose their work by April.

Welcoming the interest rate cut by the Centre, he wanted 3 per cent more hike in duty drawback rates to tide over the crisis.

“Definitely there will be a negative growth of 10 per cent this year. We normally register an annual growth of 15 per cent.”

CITU State secretary M. Chandran said they were not aware of job loses. “It is true that the business has affected and required Government support. Many firms face a cut in their profits.”

Fear of further slide in dollar has put an end to capacity expansion around Tirupur.

It had cast its shadow in the real estate business too. The otherwise booming business has taken a beating affecting the construction industry too.

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