After slow start to 2022, Surat textile industry looks for festive cheer
At his power loom unit in Pipodara on the outskirts of Surat, Kamlesh Kotadiya of Renny Fashion is churning out designer clothes, sarees, and dress material at almost 90 per cent capacity utilisation.
Over the past few months, Kotadiya has upgraded his unit by shifting from conventional power looms weaving grey cloth that require several value addition to advanced electronic jacquard machines that can churn designer clothes in large quantities.
“It was a dismal start to the year in terms of sales and orders. Every year the industry hopes to compensate for the previous or forthcoming months’ losses through bumper sales during the festive season. It is with this hope that the capacity has been ramped up,” says Kotadiya.
Unlike other industry clusters, Surat’s synthetic or man-made fibre (MMF) textiles – the largest such cluster in the country – has a shorter order-to-product cycle of 45-60 days, especially for the festive season, which will begin from August this year and run till Diwali in October. In a normal year, the festive season forms almost 60-70 per cent of annual sales.
“However, this year, more than covering losses, it has become a matter of survival for the industry,” says Jitubhai Vakharia, president of South Gujarat Textile Processors Association (SGTPA).
This is because Surat’s end users largely tend to be middle and lower-income households, especially from non-metro and rural areas.
According to industry representatives, the trend in orders so far has not been very promising. Festive orders start coming in from July 15 and pick up pace by August.
“But this year, orders till the beginning of August were down 20-30 per cent. The textile value chain, including yarn makers, weavers, processors, and textile traders have enhanced their capacity utilisation in the hope of festive demand uptick by later this month. But only time will tell whether the gamble will pay off or not,” adds Vakharia.
According to Narain Aggarwal, former chairman of The Synthetic & Rayon Textiles Export Promotion Council, the Surat industry was suffering from a slump because of multiple factors that had led to tightness in liquidity and almost 40 per cent underutilisation of capacity.
“Everyone is hoping for good business now, since the last three-four months have been dismal, leading to liquidity tightness. Demand has been slack in the past few months. But textile suppliers in Surat are trying to be ready with their products with the expectation of at least a normal festive season,” said Aggarwal.
Echoing these views, Manoj Agarwal, president of Federation of Surat Textile Traders Association (FOSTTA), says: “There is a hope that even middle and lower-income households might improve their spending during the festive season. Hence, manufacturers across the textile value chain are improving their capacity utilisation. However, orders by wholesale traders from other states have not been anywhere near normal.”
In addition, with imported coal prices almost doubling, input costs have spiked anywhere between 25 per cent and 40 per cent, says Vakharia.
“In addition, other input costs such as dyes and chemicals, especially sodium hydrogen sulphate and other discharging agents, have seen a price hike of 30-150 per cent, resulting in almost a doubling of input costs. At the same time, in order to make the most of festive demand, the industry has not been able to increase prices,” adds Vakharia.
- Surat has over 450 textile processing units, and around 600,000 power looms
- Over 180 textile markets, 70,000 textile traders or merchant manufacturers
- Surat employs roughly 1.2-1.5 million workers
- Hoping for a spike in business, industry has improved capacity utilisation to 80% from 60%
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