StitchWorld Editorial Issue January 2019

New Directions for Industry in 2019
Starting a new year always brings in a sense of nostalgia. Besides reviewing the year gone by, it is a fulfilling experience to seek out directions and potential growth areas.

In technology, the one movement that I see as a potential trend going forward is the willingness to invest in robotics for factory management. Using robotics in sewing may still be far away but garment manufacturers have started looking at home-grown robotic systems in transportation, to save on labour.

Recently, Pearl Global installed robotic systems at its Chennai factory and is very optimistic of the results. I am sure many more factories will follow lead and invest in similar technologies. The days are gone when labour was abundant and cheap… now cost efficiencies are also dependent on how much labour saving can be done.

Another movement that I strongly see in the garment industry is what I had predicted years ago – the convergence of markets into one big marketplace. For a manufacturer, a market is one that is profitable and not necessarily an export market.

There is no debate on the fact that apparel buying in Western world has slowed down. Whereas the share of spending on clothing and footwear in total consumer spending in India is 6.7 per cent higher than what is seen in the US (3 per cent) and the UK (5.7 per cent). Also, the year-on-year expenditure growth in India at 12 per cent is more than double the anticipated global rate of 5 per cent.

In this scenario, is it not more viable to work with the Indian market rather than struggle with issues that are not really in the hands of the manufacturer, to be competitive in the export market, even as the market shrinks!

Every industry observer knows that the garment exports have been hit by many factors over the last two years, starting from demonetisation leading to liquidity crunch, followed by GST implementation and reduction in duty drawback rates. This is in addition to increase in wages of all these leading to the increase in cost of manufacturing.

The impact has been even greater due to the lack of any trade boosters such as the FTA with Europe. These factors, put together, have been a dent in competitiveness, of the global export industry in the past few years.

But last year, the impact of all these negative factors evened out, as GST refunds started coming in; the liquidity issues decreased and exporters learnt the hard way of how to survive on practically no duty drawbacks.

However, the factor that really brought cheer was the depreciation of the rupee, which meant that Indian exporters automatically became cheaper, without any extra effort.

This year has started on a positive note with crude prices, currency and other external influencing factors being stable. But the reality is that export is now very competitive and uncertain, so the best bet today is to address the challenges of local market and grow the business.

Stitch World Editorial Issue February 2018

January month has always been a busier month hustling with activity and business owing to multiple technology trade fairs being held around the same time in both India and Bangladesh. What makes it even more interesting and spirited is the opportunity that it gives us to meet several old and new acquaintances and get the real pulse of the industry… undoubtedly, this time also I was successful in drawing many leads.

However, what perturbs me still is the industry’s ‘not-so-vibrant’ scenario, as they continue to struggle under the ongoing product-price war, and are even more badly hit due to bank’s tight lending, thanks to the NPAs and the GST, and the final nail in the coffin being the abolition of duty drawback.

Nevertheless, I was elated to come across few exporters who managed to put up a good show amidst such testing times… Here my special mention goes to Magnum Resources, a technology supplier, whose stall at GTE Delhi, apart from giving a feel of international styling also depicted the prosperous time it saw last year. From next year onwards, the company intends to take a bigger leap by not only having a larger stall but also a double-storey set-up. I must compliment their consistent courage and determination which has made them emerge as a winner in this sluggish position.

The twist in the tale was ‘automation’ or as I should say more emphatically ‘affordable automation’ which stole the show. Certain automats like cuff runstitch, collar runstitch machines, which have made their presence felt since last three decades, are finally finding a place on the shopfloor. We may have been still far from Industry 4.0 compared to the West, but automation has silently crawled its way to become an integral need for our industry’s successful survival in face of rising cost and labour crisis.

What continues to concern me though is the absence of newcomers in such potential events. I have kept harping on this time and again as I don’t get to see the new generation coming to these fairs, lacking the required inquisitiveness towards developments with regard to the industry. Now I don’t even chance to meet the regular generation next… Is this not sad?

All said and done, apparel may not be doing well but non-apparel products are already on their growth path, and as per my understanding and information, the major expansion is taking place in this segment. StitchWorld definitely endeavours to have more such nonapparel products such as gloves, backpacks, wallets and more on its pages for its readers… Our next issue will update you on the detailed happening in the technological front and their implementation in India and Bangladesh.

If you don’t know yet, my company Apparel Resources has recently released a book Industrial Engineering in Apparel Manufacturing and has also used GTE as a launching pad for our Apparel Resources Jobs portal… Don’t miss further information on these new ventures in our upcoming Apparel Online magazine and our website apparelresources.com.

I must admit that I have stated only a small fragment of the vast pool of thoughts which surround me, and more will be shared with you shortly…

Stitch World Editorial Issue July 2017

A change is inevitable now. All because of the few incidents that have happened or are going to happen…

Last year was the most uneventful year for exports in a long time…, maybe it was a year in brooding. The export growth figures were down and the domestic market was depressed due to demonetization and fear of GST (some are comparing it to the Y2K virus, which created such a hype at the turn of the century but fizzled out to nothing).

I believe that fear is bigger than reality…, yet there are genuine concerns, mainly because of the lack of clarity and implementation hurdles. In the meanwhile, the textile industry is divided on how the reforms would impact businesses along the supply chain, though there is a conviction that it would have a positive influence on the competitiveness in the long run.

The recently concluded Textiles India 2017 extravaganza was a breeding spot for discussions and the four major concerns with regard to GST that emerged are: Accumulation of credit at every level of the chain; Imported fabric to be cheaper than domestic fabric; 18 per cent service tax on apparel job work to make outsourcing unviable; and 18 per cent GST on MMF and Yarn serving as a severe blow to the synthetic sector.

Though the Government has assured a review and revision after three months, the industry is on the back foot. While demonetization brought in lack of funds to source raw materials and pay wages, GST has brought uncertainty, thereby further crippling the system.

As if this was not enough, the Delhi Government has increased minimum wages by 50%... I am not even sure if the industry can survive after such a huge blow… Where are the margins to absorb this increase?

Though the honourable court has reserved the decision till 11th September, I doubt if the court will eventually ‘stay’ the move.

With all this happening, the only way to survive is to move to places like Jharkhand, Odisha, Telangana and other states where the Government is pro-active in building infrastructure and is offering incentives to the industry to come in, including a rebate on wages. Jharkhand already has three bigwigs setting up units there – Orient Craft, Shahi Exports and Matrix Clothing…, and I am sure others will follow suit soon.

I sincerely believe that this is the best and the only way for the industry to grow now!

In the meanwhile, things are getting tough on the retail front also with stores closure and frequently changing consumer demands putting pressure on retailers to be faster than their competitors in placing their products on the shelves. Ram Sareen, Founder, Tukatech shares with our readers how the long sheets of tech packs cannot keep pace with the evolving fashion industry. It is the digital platform that should be the new communication language between designers and technical team. Longer the retailers rely on outdated means, sooner they will be out of business.

Another trend which is taking fashion to a next level is ‘athleisure’. Driven by millennials’ fitness-conscious behaviour, athleisure is the new take of the town. Fad or classic, athleisure is not going to lose its charm in the coming years. Two of Indian sportswear manufacturers, Paragon Apparels and Creative Clothex, have launched their own athleisure brands in the market to tap the potential market in India