Slow revival and high input costs hurt garment makers
As per the data, garment manufacturers are taking a 3 to 4% margin in order to absorb the input costs. They are also struggling to pace up the production because of the scarcity of workers.
Tiruppur
The garment
industry has been severely affected after the second wave of the coronavirus.
Hosiery and knitwear manufacturers are still struggling to revive. As per the
data, garment manufacturers are taking a 3 to 4% margin in order to absorb the
input costs. They are also struggling to pace up the production because of the
scarcity of workers.
According to KB
Agarwala, Managing Director, Rupa, the manufacturing hubs in West Bengal and
Tamil Nadu are still not able to get back to 100% production due to
restrictions on local travel for workers to return. This has created a gap
between demand and supply. He also said that the supply has gone down by 50%.
As per Raja
Shanmugam, the President, Tiruppur Exporters Association of Tamil Nadu, the
production will come to the track within two months and will bridge the gap
between domestic demand and supply. He also said that the manufacturers are
already working at thin margins of 5-7% but they cannot pass on input costs
completely, so they are now taking a 3 to 4% hit on the small margins.
As the prices of the inputs are increasing,
manufacturers are worried. The repeated hikes in yarn and cotton prices have
also caused a lot of trouble to the companies. Agarwala explains that the
prices of the products cannot be increased any further because the buyers have
started to resist now.
Source – ET Now News
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