Low demand from US & EU hit textile industry - Supreme Tex Mart
Mr Rajeev Bhambri, VP Finance, Supreme Tex Mart Limited
The Indian textile industry is reeling under the pressure of global financial crunch. Exporters, who were suffering from the appreciation of rupee earlier, are now facing the jolt of international monetary meltdown.
High inflation rate and slow industrial growth has left textile exporters in a dire state.
In communication with Fibre2fashion, Mr Rajeev Bhambri, Vice President Finance, of Supreme Tex Mart Limited, shared his views on global recession and its effects, domestically and internationally.
“The recession is inevitable and it has reached in the roots of every country now. Circle of recession has taken place of growth. It will result in lower growth, leading into inferior income, lower spending power, lessening demand, and thus resulting into lower growth. Breaking this circle is very difficult and it will go on for at least 6 to 7 years. Financial jugglery being done by every country will not save the industry and it will help only the banks,” avers Mr Bhamvri.
Supreme Tex Mart Limited the renowned manufacturer and exporter of yarn, has recently diversified into production and export of fabric and garment.
The company has installed spinning capacity of 72,000 spindles operating at almost 100 percent capacity producing yarn. The fabrics unit has a capacity of making 12 tons of fabric per day on count range of 10s to 40s Ne in various blends and knits. All the machines are capable of doing fabrics with elastic yarns. The garment unit can produce 30,000 T-shirts per day.
Further Vice President Finance stated, “To deal with the situation, there are very few options available at the moment in the spinning. Our priority will shift from selling grey yarn to selling either dyed yarn or garments. Both dyed yarn and garments still command a good amount of margin. Increased sale of dyed yarn and garments and maintaining break even in spinning will hopefully sail us through.”
Discussing the future of the Indian textile industry, Mr Rajeev Bhambri lamented, “Textile industry will be the worst hit due to the lower demand from US and Europe. Indian textile exports was growing only because of over-spending in clothing by US and European people, which they won't be able to afford in future. Moreover there are a lot of companies which are still in process of implementing their projects or have recently completed their new projects. They will have to face higher interest rates and future uncertainty, which will result in failures in repayments of their loans. This will further aggravate their problems.
“Companies with lower debts and value added products will be facing lesser trouble. Small companies will vanish if recession in US remains continued for three years or more.”
Fibre2fashion News Desk - India