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Pall of gloom surrounds garment exporters
06
Nov '08
With each passing month and day, the economic crisis is taking its toll. The situation is more miserable for countries like Vietnam and Bangladesh which had projected high clothing export growth rates in the current year on back of thumping growth in the previous year.

Reputed garment export companies are complaining of cut back in new orders by up to nearly 30 percent in comparison to the same period of last year. They add by saying that they are currently working on orders received a few months ago but are apprehensive of the pace of new orders in the next few months.

According to them their buyers are requesting for rate cuts on rates negotiated earlier by nearly 5-10 percent for deliveries scheduled for the next two months. The buyers are also asking for quarterly contracts instead of the yearly norm.

The manufacturers are also finding it difficult to give regular work to their employees on back of falling orders, while in the previous years they had to plead with them to work overtime to complete orders on time. A few companies have started retrenching or laying off workers to reduce their over heads.

Export targets of major garment exporting countries like Vietnam which has set an ambitious target of achieving US $9.5 billion in the current year and was well on the way to achieving the same before the current crisis began now looks unachievable.

Exports of textiles and apparels had reached $7.64 billion in the first ten months of 2008 and were on course to complete the projected figures as it needed to ship $930 million per month worth of products in the last two months of the calendar year. But under the present situation this figure looks far fetched.

Apparel buyers and importers are also reporting a slowdown in their home and global markets and say that they expect this situation to continue till the first half of 2009. But at the same time they expect their orders to be completed on time, therefore only those companies with high productivity and capability of delivering on time are expected to benefit in the next few months.

Garment units in Vietnam, though are worried due to the above as at year end and at the beginning of the new year they run short of workers by as much as 40 percent due to the Lunar New Year when workers return to their villages and come back after a very long hiatus. Due to this they are apprehensive about signing new contracts for deliveries in the months of January and February.

Experts suggest the exporters to follow the example of a few companies in Vietnam who have diversified their export destinations and looked for new markets and are not dependent on the markets of the US, if they want to survive this meltdown, whose end, no one is willing to predict.

Fibre2fashion News Desk - India

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