Tata International Ltd (TIL), the largest manufacturer and exporters of leather footwear, has decided to reduce its dependence on Europeans countries and instead focus on the north America and southern hemisphere, said a top official.
Currently, TIL produce 6.5 million pair of men’s, ladies’ and children’s footwear, of which 99 per cent is exported. About 85 per cent is exported to European countries and 15 per cent to other markets.
“Last year has been a challenging year for us due to European debt crisis. So, we have an alternative strategy in place. Next year, we will bring down our exposure in Europe to 60 per cent. About 30 per cent of our products will go to the U.S. and Canada and 5-10 per cent to Australia, New Zealand, Brazil and Chile,” said N. Mohan, Global Business Head, Footwear and Leather Garments, Tata International.
Indian footwear manufacturers are predominantly tied to the European market as it is easier to get small orders, while the buyers in the U.S., looks for huge capacity/orders. You cannot enter new market in a short period as it takes 18-24 months to develop it, he said.
Hit hard by the economic slowdown, TIL has deferred its expansion plan and its production target by a year.
“We had decided to set up of two million pair footwear production unit at Thirumazhisai, near Chennai. This has been postponed by a year. We planned to produce 10 million pair by 2016-17. This also gets postponed. This year, we will be producing 6.5 million pairs, followed by 7.8 million pairs and 10 million pairs in the coming years,” he said.
TIL has seven manufacturing units – three in Chennai, one each at Ranipet, Wallajah and Ambur (all in Tamil Nadu) and one in Dewas Central India and development centres in Portugal and China. Over 1,800 women are employed at Dewas and this would reach 3,000 in three years. The unit produces one million pairs and it will increase to two million pairs next year.
“Worldwide leather and leather products account for 65 per cent of total exports, whereas in India, it is 40-45 per cent. Plans are on to increase the market share to 60 per cent. So, TIL will focus on new markets based on geographic and seasonal risks,” he said.
The company hopes to end the current financial year with sales income of Rs.825 crore against Rs.750 crore for 2014-15. The same target has been pegged for next year too.
