Covid spike crumples Tiruppur’s textile industry

This has resulted in units closing down, with traders and exporters worried about completion of their export orders on time.
For representational purposes
For representational purposes

CHENNAI: The sharp spike in cases in Tiruppur has wreaked havoc for the textile industry. With no drop in cases, the administration has imposed a strict lockdown in the city, where one of the biggest textile manufacturing clusters in the country is located.

This has resulted in units closing down, with traders and exporters worried about completion of their export orders on time. “For the past three weeks, our factories have remained shut. We don’t have any idea when we can resume operations as there is no decrease in daily caseload in the region,” said Raja M Shanmugam, president of Tirupur Exporters’ Association.

The industry had recovered well from the first jolt of Covid and orderbooks of the units were full with export orders in the months that followed. Infact, export orders this year have increased by at least 15 to 20 per cent from pre- Covid levels as casual wear is in very much demand nowadays ,said Shanmugam.

The exporters and manufacturers were busy working on their orders when the second wave hit them. With lockdown imminent, many migrant workers left for their native. However, the manufacturers ran the show with local labourers, but the shut down has left them all in a lurch. 

Increasing cases put textile industry in limbo 

The uncertainty prevailing over reopening of factories will cost manufacturers and exporters dearly. “If we are unable to fulfil export orders on time, it will get cancelled or we will have to give them a heavy discount. Either ways, it is our loss,” said Shankaran V, another exporter. Last year, the entire world was affected by the pandemic and so getting back on its feet was easier for the Tiruppur industry. But this time, what worries them is that India is only one badly affected by the second wave.

“So this time, customers can buy products from countries like China, Bangladesh and Pakistan, where factories are still functional and we will loose our export orders forever,” said Shanmugam. Dr Venkatachalam, advisor at the Tamil Nadu Spinning Mills Association (TASMA), said, “Several crores worth of yarn orders from abroad are pending for the past few weeks at spinning mills. If we cancel orders immediately, we have to pay a penalty according to the contract.

Even if we bear that brunt, it will be tough to renegotiate the order from the same buyer next time. There is a sense of uncertainty among the mills, whether to receive orders or give importance to pending orders. Since all the mills are closed as the government refused to run the facility even with in-house labourers, many large mills are forced to pay ‘holding charges’ for bulk containers.” The view was echoed by P Mohan, treasurer of the Tiruppur Exporters Association.

He said, “European markets have opened for the past few weeks and almost all western countries have relaxed restrictions. They have started issuing orders for summer wear and buyers have started asking for price quotes, and samples from the units here. Many companies got the orders and some are awaiting confirmation. Garment units, who have had consistent orders, are shocked by the second wave and the resultant lockdown.

Many companies have completed only half of their order and with buyers getting apprehensive and questioning exporters about the lockdown, these units fear losing out on orders. With Rs 2,000 crore business order currently in export units, I believe, we completed just half of them.” There are over 10,000 garment manufacturing industries in Tiruppur, employing over six lakh people. The cluster, on an average, exports textiles worth Rs 2,500 crore a month.

(With inputs from Tiruppur)

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