Rs 20,000-cr industry turns around in first three months of 2013, after 3 years of negative growth; labour, power issues persist

After reporting a decline for three years, the Rs 20,000-crore textile industry at Tirupur, knitwear hub of India, has reported a growth in exports during the first three months of 2013.

Iry has attributed the growth to new markets, explored in the past 10-12 months. Meanwhile, labour and power shortages are going to be major obstacles, say industry representatives.

Exporters from this town, about 450 km from Chennai, said the Free Trade Agreement (FTA) expected to be signed anytime with the European Union, would help them compete with Bangladesh, which is now enjoying duty-free benefits.

A Sakthivel, president, Tirupur Exporters Association, said: “We started seeing some sign of relief from January, from old and new customers (mainly from the non-traditional markets).”

Exports fell 10-15 per cent in 2009-10 and 2010-11; in 2011-12, it was flat, thanks to the rupee’s appreciation against the dollar. In 2006-07, when the industry clocked around Rs 11,000 crore, it had set a target to reach $4 billion (Rs 21,800 crore) by 2012. However, it could reach only $2.75 bn (Rs 15,000 crore).

The general global downturn, rupee appreciation, increase in costs (power, transportation, yarn, logistics, diesel) and the high court’s decision to close dyeing units had hit the industry badly after 2008.

“We are seeing some sign of relief now. Between January and March, we have seen five per cent growth, though margins continue to be under pressure,” said Sakthivel.

Industry representatives have said the growth was mainly due to contribution from new markets into which it had ventured in the past one or two years. These include Japan, South Africa, Israel and South America. It also saw some relief in the US markets, along with new orders.

“The concern is the European market, which used to contribute around 50 per cent to the industry,” said Sakthivel.

With the new order flows and opening of new markets, exports from Tirupur are expected to touch Rs 14,000 crore in 2013-14. While the order inflow is good news, exporters are struggling to convert these enquiries to orders.

A leading exporter said lack of power and shortage of labour hurts the industry.

“The power cut ranges from seven to eight hours during the day. In the night, every two hours, power goes for one hour,” he said. “Average delay (job orders) in delivery ranges from 10-15 days. An airlift to meet customers requirements means additional cost.”

The recent increase in diesel prices is also hitting the industry, said Sakthivel. “Our FOB value has increased by two per cent because of the increase.”

Exporters have asked the government for a ‘gold card’ scheme, to enable them to buy diesel at the international price from a designated  oil marketing company. And, to allow duty credit scrip at five per cent of garment exports for the performance in 2012-13, for issuance of scrip from 2013-14. The scrip will be used for offsetting customs duties on speciality fabrics.

The Association estimates 50,000-75,000 more workers are required immediately to meet the new demand. The industry had lost a lot of workers after the downtrend, which had resulted in closure of many units.

source: http://www.business-standard.com / Home> Companies> News> News / by T E Narasimhan / Chennai, March 28th, 2013

Under Vellore Corporation’s new project, the city will soon have modernised stainless steel bus shelters, to be carried-out at an estimated cost of `3.5 crore.

“This effort is part of developmental activities aimed at refurbishing the city as it has been upgraded into a Corporation in August 2008,” said Vellore Mayor P Karthiyayini.

“Modernising the bus shelters and leasing out the space for advertisement will increase the revenue of the local body,” she added. This will also address the traffic problem caused by the increasing number of hoardings at the bus shelters, she noted.

Town Planning Officer M Kannan said, “A total of 102 bus shelters, including 15 new shelters near Sarathi Maaligai commercial complex, have been identified under the project. It would be carried out under the Build-Operate-Transfer model, through which the contractors will construct the shelters according to the design specifications of the civic body, operate it for a certain period and then transfer it to the Corporation.”

The new shelter will have stainless steel roofing with steel seating arrangement, apart from facilities including digital boards to display the bus schedule. This is similar to the shelters on the Marina Beach Road in Chennai, he said.

The renovation work originally began in 2011. Since no bidder came forward to take up the tender citing high costs, stainless steel shelters were planned in around 50 important locations and main roads, each at a cost of around `5 lakh, while mild steel shelters each costing around `2 lakh were planned for the interior areas, Kannan added.

A resolution regarding the modernisation of the bus shelters has already been passed at the Traffic Committee Meeting and the work would start soon, after an approval and a designing specification for the bus shelter was received from the Commissionerate of Municipal Administration, he said.

source: http://www.newindianexpress.com / Home> States> Tamil Nadu /  by Express News Service – Vellore / March 17th, 2013