Yet, the knitwear industry looks forward to better prospects next year Still, they look forward to better prospects next year
TIRUPUR: The year 2005, which marked the beginning of the quota-free textile trade, held out promise for the knitwear industry. It motivated the industry to expand, but in the end failed to bring cheer.
"The year gave us good business, but not on the scale we expected. We expected a 40 per cent increase this year, but we achieved only a 25 per cent growth for the U.S. market and 20 per cent for the European market," says A. Sakthivel, president, Tirupur Exporters' Association. The sudden cut in duty drawback rates in the beginning of the year and the lack of compensation for higher transaction costs dealt a blow, he said.
The surge in Chinese exports was not expected by the Tirupur cluster, which accounts for 70 per cent of the country's total cotton knitwear exports. In the first two quarters, exporters struggled to confirm orders despite a good number of business enquiries; they were unable to meet the prices offered by the buyers. After the U.S. and the European Union slapped quantitative restrictions on Chinese imports two months ago, Tirupur started getting its share.
By and large, the exporters hope for better prospects next year. New buyers started coming to Tirupur. Even some small chain stores in the U.S. have started sourcing their requirements from here, they say. And the domestic business also looks up. A leading exporter, N. Palanisamy of Eastman Exports, says 2005 was a year of transition in the new global order. A slow and steady growth is always good, and the prospects are bright for the coming year.
For the processing industry, the year was unforgettable. They got much-needed water from the Cauvery. And they experienced an en mass closure, for first time, for non-compliance of pollution control norms.
Under the vigil of the Madras High Court, there is some progress towards the zero effluent discharge. "We have faced challenges, but we went ahead with our business. The knitwear industry realises the strategic importance of the dyeing sector. We hope the pollution problem will be solved forever by next year," says N. Kandaswamy, president, Dyers' Association, Tirupur.
The domestic innerwear manufacturers faced problems, as the Value Added Tax was not implemented in the State.
The big export houses, especially those with infrastructure under one roof, are getting good orders. Buyers prefer them. But the job-workers (sub-contractors) such as knitters, and embroidery units faced under-utilisation owing to the import of processed Chinese cotton fabric and the expansion by the exporters.
The Rs.1,023-crore water supply and sewerage project is over. However, the infrastructure woes still haunt the public. Though 2006 seems promising for the industry, there is no ray of hope for better infrastructure.