Home / Knowledge / News / Euro crisis affects Kanpur leather industry
Euro crisis affects Kanpur leather industry
03
Jul '10
Kanpur-based leather industry has been severely battered, owing to the Euro zone crisis. The city's leather industry runs to the tune of Rs 7,000 a year.

The producers and exporters were just reviving from the world economic meltdown by finding relief in the European markets. But the unexpected euro crisis has dejected them.

The depreciation in Euro from a range of Rs 68-70 to Rs 57 had resulted to constricting margins for exporters. Europe totals for about 80 percent of the city's leather exports, following the US economic downturn, experienced around the world last year.

Owing to reducing rates of exchange, exports have also reduced pace and their operations are severely hurt. Declining Euro is likely to result in job losses or sales of goods at cost price, which might affect exporter's profits.

Therefore, Euro fall has also pressurised exporters to reduce prices. More so, inventory sizes are also being reduced by exporters, owing to which buyers are demanding delivery in a time period of 40 days, as compared to the earlier time duration of six months.

In addition to the aforesaid problems, large number of exporters are now pressed upon flying their deliverables, against using the sea way. Thereby, adding an additional transportation cost. Therefore, the price of one jacket has risen from 60 cents to $2.

Buyers on the other hand are going slow on their purchase. This is because; they purchase products in dollars, but have to remove more euros for each dollar, as euro has depreciated against US dollar. This has further created, an ambiguity for the future, as buyers prefer to go slow, till the market and the currency stabilises.

Exporters have become smarter with the crisis, as to come out of the crisis, existing in the international markets, state exporters are reaching out to other export nations such as Africa and Latin America.

An exporter informs that, they are in touch with entrepreneurs in Latin American countries such as Mexico, Uruguay, Paraguay, Chile, Argentina and Brazil, for possible future trade in food processing and medicine sections.

As payment commitments from clientele in European nations gets clearer by July-August, the impact of euro crisis on the sector will also be known.

But the worst hit with the falling euro are the Small and Medium enterprises (SMEs), as they function on smaller profit margins and turnovers, which are highly affected by currency fluctuations.

Fibre2Fashion News Desk - India

Must ReadView All

Courtesy: American Apparel

Apparel/Garments | On 25th Feb 2017

Gildan to make some American Apparel products outside US

Gildan Activewear, which recently acquired US fashion brand American...

Courtesy: Kolon Sport

Apparel/Garments | On 25th Feb 2017

Kolon Sport to set up JV with ANTA for Chinese market

Kolon Sport, an outdoor gear and clothing brand of Korea based Kolon...

Designer Karishma Jumani with Niraj Jawanjal, founder and director of IIFW. Courtesy: IIFW

Textiles | On 25th Feb 2017

IIFW to bring together premium lingerie brands

India Intimate fashion Week (IIFW), dedicated to showcasing the...

Interviews View All

Kamlesh Vaghela
RK Textiles

Very few machinery manufacturers have R&D units

Abhimanyu Singh Rathore & Barbara Anna Kosiorek
Kannbar

‘Blending cultures is the true beauty of fashion, where one’s imagination...

Abhishek Ganguly
Puma India

‘As a brand, Puma is always looking for new and innovative ways to inspire ...

Urs Stalder
Sanitized AG

Urs Stalder, CEO, Sanitized AG, talks about the increasing use of hygiene...

Larry L Kinn
Suominen Corporation

Larry L Kinn, Senior Vice President - Operations Americas of Suominen...

Eric Scholler
Groz-Beckert

The Indian market has huge potential in technical textiles, and by far,...

Wendell Rodricks
Wendell Rodricks

"We should not compare India and the West. There are things we do that...

Madhu Jain
Madhu Jain

She grew up in the walled city of Old Delhi, completed her studies, and...

Igor Chapurin
Chapurin

"Now we can see the Russian trend in international fashion. And Russian...

Press Release

Press Release

Letter to Editor

Letter to Editor

RSS Feed

RSS Feed

Submit your press release on


editorial@fibre2fashion.com

Letter To Editor






(Max. 8000 char.)

Search Companies





SEARCH
February 2017

February 2017

Subscribe today and get the latest update on Textiles, Fashion, Apparel and so on.

SUBSCRIBE


Browse Our Archives

GO


eNEWS
Insights
Subscribe today and get the latest News update in your mail box.
Advanced Search