FOHMA launches first ever cost index in textile

The Federation of Hosiery Manufacturers’ Association of India (FOHMA) is the apex body for the hosiery industry in India. Over the past four decades, FOHMA has been constantly endeavouring to come out with new initiatives to assist the industry in becoming world class and organised to benchmark itself against the best in the world.

In its AGM held on September 21, 2015 in Kolkata, it launched its website www.fohma.in and the FOHMA Hosiery Cost Index (HOSEX). In the AGM, office bearers were elected for the year 2015-16. Apart from the central team, FOHMA has Vice President and Secretary for five zones. All leading regional associations are members of it. FOHMA represents the industry on all issues with the various Government bodies apart from working for the development of the industry.

Its re-elected President KB Agrwala (Rupa & Co) stated that the creation and launching of the ‘FOHMA Hosiery Cost Index’ is a step towards making the industry more aware of its costing & profitability. He said this is a unique initiative of the association and over time the same shall become a reference point for the total hosiery/knitwear industry. He further confirmed that FOHMA would work on more such innovative and industry needed matters to ensure growth and development of the Industry.

This Index has been conceptualised and created by FOHMA Vice President (Central) Sanjay K Jain (TT Ltd). He said that FOHMA hopes with proper support from industry players and all aligned people around us, it will be possible to establish a universally accepted Index which will be a guiding tool for both buyers & sellers. This will be the first cost index for any textile industry segment in the country.This will enable companies to benchmark their pricing to a systematic cost plus scenario and ensure the same is accepted by the market. Speaking simply, it highlights the average movement in costing for a representative basket of hosiery goods over a period of time. For example if the cost was Rs 100 in January 2010 and the index is 132 today, it means over the period the cost for the industry has gone up by 32 per cent. However specific products may have gone up more or less depending on its specifications, the INDEX just gives a broad idea for the industry as a whole. Its relevance is more in giving an idea of the direction of movement of costing rather than absolute movement.

The industry is slowly graduating from a fragmented market scenario to a more organised one, where more and more large buyers are emerging in the shape of organised retailers, institutional players and e-commerce giants. They have much more bargaining power and can squeeze companies/brands in an inflationary situation. We are well aware that India is an inflation prone country due to its structure and phased process of development. In such a scenario, it gets difficult for brands and companies to convince buyers for a price hike. On the other side it will also provide direction to the buyers and help them in ensuring a correct pricing for them. This index is expected to create a win-win and balanced scenario for both buyers & sellers.

Jain further stated that the index would be updated at the start of every quarter i.e. January 1 and so on. The base year has been taken as January 1, 2010 as this period was relatively stable and was between two highly volatile periods (2008-9 & 2011-12). It shall be called as HOSEX and will be disseminated through out the textile industry through magazines and associations. It has covered various products being manufactured in major hosiery centres like Tirupur, Kolkata and Delhi. Details of the index are available at www.fohma.in and for further clarifications interested people may write to FOHMA.

By Sanjay K Jain, VP, FOHMA, and MD, T T Ltd