After a slow start to 2022, Surat’s textile industry seeks holiday cheer
At his loom unit in Pipodara, on the outskirts of Surat, Kamlesh Kotadiya of Renny Fashion produces designer clothes, sarees and apparel materials at almost 90% capacity utilization.
Over the past few months, Kotadiya has upgraded its unit from conventional electric looms weaving gray fabric that require several value additions to advanced electronic jacquard machines that can churn designer garments in large quantities.
“It was a dismal start to the year in terms of sales and orders. Each year the industry hopes to make up for the losses of the previous or future months with bumper sales during the holiday season. It is with this hope that the capacity has been increased,” says Kotadiya.
Unlike other industrial clusters, Surat’s synthetic or synthetic fiber textiles (MMF) – the largest such cluster in the country – has a shorter order-to-product cycle of 45-60 days, especially for festive season, which will start from August this year until Diwali in October. In a normal year, the holiday season accounts for nearly 60-70% of annual sales.
“However, this year, more than covering losses, it has become a matter of survival for the industry,” says Jitubhai Vakharia, chairman of the South Gujarat Textile Processors Association (SGTPA).
This is because the end users of Surat tend to be middle and low income households, especially from non-metropolitan and rural areas.
According to industry representatives, the trend of orders so far has not been very promising. Festive orders start arriving from July 15 and ramp up in August.
“But this year, orders through early August are down 20-30%. The textile value chain, including yarn makers, weavers, processors and textile traders, has improved its capacity utilization in hopes of a rise in festive demand by the end of the month .
But only time will tell if the bet will pay off or not,” adds Vakharia.
According to Narain Aggarwal, former chairman of the Rayon and Synthetic Textiles Export Promotion Board, Surat industry was suffering from a slump due to multiple factors which had led to tight liquidity and near underutilization. 40% of capacity.
“Everyone is hoping for good business now as the past three or four months have been dismal which has led to cash shortages. Demand has been weak for the past few months. But textile suppliers in Surat are trying to be ready with their products looking forward to at least a normal holiday season,” Aggarwal said.
Echoing these views, Manoj Agarwal, President of the Federation of Textile Traders Associations of Surat (FOSTTA), says: “There is hope that even middle and low income households could improve their spending during the holiday season. As a result, manufacturers across the textile value chain are improving their capacity utilization. However, orders from wholesalers in other states are far from normal. »
Moreover, as the prices of imported coal nearly doubled, input costs soared between 25 and 40 percent, says Vakharia.
“In addition, the costs of other inputs such as dyes and chemicals, especially sodium hydrogen sulfate and other discharge agents, have seen a price increase of 30-150%, resulting in a near- doubling of input costs. At the same time, to make the most of the festive demand, the industry has not been able to raise prices,” adds Vakharia.