Bageshree S. and Sharath S. Srivatsa
Orders come down by 10 per cent; units resort to lay offs
The next quarter may be worse if the global situation does not improve
Production targets have been so strict that workers find it difficult to take a break
BANGALORE: This Deepavali has not brought cheer to owners and workers of apparel factories here with the slowdown in the world economy affecting the industry.
Several factories here are facing problems with deferred purchase.
The orders for factories, which are dependent on exports, mainly to the United States have come down by about 10 per cent following deferred buying by big apparel brands.
Industry insiders say that the situation might become worse in the next quarter if the global situation does not improve by then.
Rising unemployment and reduced spending by the Americans have forced some of the leading brands in the U.S. to close down their outlets, which in turn has affected the apparel industry here. The U.S. accounts for 55 per cent of all global apparel imports. Sandeep Walia, CEO of Arwind Apparels, told The Hindu that the industry was in “recessionary mode,” and industries were looking at “building in efficiency” and “cutting out all the fat” by cutting down on expenses, such as avoidable air travel, and “increasing plant efficiency”.
While some of the smaller units have closed shop, many are giving extended Deepavali break to workers with a rider that they will make up for this when the orders start pouring in. The fact that people in Europe and the U.S. are not walking into stores of branded apparels and buying brands such as GAP, Lands End, Ann Taylor, West Seal and J.C. Penny has affected business, said Ravi Kishore, an industry consultant.
“Many of these brands which have businesses in India have deferred purchase,” he said. Acknowledging that there is an “anticipation of slowdown” by December if the present trend continues, Jagdish N. Hinduja of Gokuldas Images, said that orders were “reasonably good” at present.
Meanwhile, the downward trend has turned the heat on about six lakh garment workers in the city. The industries are resorting to reducing the shift size and giving offs to the employees. Kumari, a worker in a factory at Gowdanapalya near Uttarahalli, said that production targets were so strict now that workers found it difficult to take a break even to drink water. She had no work between October 2 and 13 and is yet to know if she will be paid for this period.
A company on Mysore Road, which employs 2,700 workers, has been giving weeklong holidays to employees by turns. “They have been paid for this period and told that they should compensate for it when work picks up again,” said K.R. Jayaram of Garment and Textile Workers Union.
Vishalakshi, who worked as a tailor at MD Apparels at Madnahakanahalli, lost her job when the unit closed down. She joined another factory in the same locality, but was paid only Rs. 120 a day as against Rs. 147 paid earlier. “The market is down and they said I could quit if I was not happy with the pay,” she says. Ms. Vishalakshi is now looking for her third job within six months.
A manager of a unit near Nelamanagala said he had instructions to cut about 10 per cent of the employee strength after strict performance appraisals. Overtime wages had been stopped, he said.