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Slowdown has cast shadow on dyestuff exports - Mr Mehta, DMAI
Nov '08
The worldwide demand for organic colorants (dyes and organic pigments) is estimated at $10.6 billion in 2008. India which has a very broad based and well entrenched dyestuff manufacturing sector has an export share of 6 percent of global trade in dyestuff chemicals.

From a meager export of $1.5 million in 1963-64, export during 1979-80 reached $35 million and has touched over $1.1 billion last year. The domestic dyestuffs industry plans to target export turnover of $2 billion by the year 2010, raising its global market share from 6 percent to 10 percent.

Today Indian dyestuffs are being exported to Asia, Africa, USA and countries of the European Union, of which US alone accounts for almost 20 percent of all shipments.

Chemical industry sources say that exports of Indian dyestuff is expected to go down in the second half as compared to the first half of this year due to global melt down and tough competition from China. Indian dyestuff industry faced less competition during pre-Olympics period, because some of the companies were shutdown temporarily due to the strict environment laws.

However the Chinese companies are back in business now, which will probably affect exports of dyestuffs and chemicals from India. But now a new monster named recession, fallout of the economic turmoil has reared its ugly head and come home to haunt the vibrant Indian textile chemical industry along with the Chinese threat.

To give a comprehensive understanding as to what extent this meltdown will affect the textile chemical industry, fibre2fashion spoke to Mr Janak Mehta, President of Dyestuff Manufacturers Association of India, which is a national body representing the dyestuff industry in India.

Commenting on the economic crisis and recessionary trends, Mr Mehta said, “The economic turmoil gripping the developed nations all over the world has also undoubtedly affected our industry very adversely. A lion's share of dyestuffs from our country is exported to US, EU and South Asian Countries. Slow down of economy and recessionary trends for the last few months mainly in US and Europe has cast a shadow on our exports to these regions both directly and indirectly. Consuming sectors including garments and textiles, leather, etc., have been hit most seriously.

As more than 60 percent of dyestuffs products are consumed by these industries and coupled with the downtrend in the consuming industry, the impact has been very severely felt by the dyestuffs industry and direct exports in particular as well, as a consequence. As per available data, export growth has slipped to almost 10 percent in September 2008 vis-à-vis a robust average of 27 percent witnessed during the earlier months of the current fiscal.”

Mr Mehta, though commended the steps taken by the government by saying “No doubt infusion of liquidity by the recent Govt. measures like reduction in CRR and SLR, REPO rates etc. has brought in an additional Rs.100,000 crores into the system and appreciation of the US dollar to almost Rs.49 in recent days has provided much sought relief to our export fraternity although imports have become astronomically prohibitive.”

But in a solemn voice he lamented that “Saddled with the high cost of inputs and accumulation of inventory on the one hand, exporters are facing the irony of cancellation of export orders in the changed scenario on the other hand. Drying up of orders mainly from countries like US, EU and Japan, we are afraid, is likely to hit our exporters harder in the next few months, if the present slow down in the global economy continues unabated.”

Fibre2fashion News Desk - India

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