Prospect of textile industry looks quite promising – Alok Industries
Dec '08
Major players of the Indian textile industry believe that the current situation would further affect adversely in the second half of the ongoing financial year. India has set export target of US $200 billion for the fiscal 2008-09, but market experts are in doubts that the country will not be able to meet the target in the wake of global recession.
However, few companies are not much concerned about their export status. One of them is textile major Alok Industries.
Elaborating on this context, Sunil Khandelwal, Chief Financial Officer (CFO), of Alok Industries, told Fibre2fashion, “The Company's order book position is very good, both in the domestic market as well as exports, with orders for next 4-5 months aggregating to about Rs7500 million in hand. There are also good amount of enquiries in the pipeline, which we expect to convert into orders.”
Discussing how to get through the current situation, the CFO stressed, “There is an old adage that in every adversity lie the seeds of opportunity. It is only in the challenging environment that one learns the best lessons of life. Every business passes through various cycles, good and difficult but the silver lining is that difficult times also pass through.
“Challenging time like these, present an opportunity to look into the business very closely, remove inefficiencies, rationalize expenditure (control costs) and look at alternate products & markets.”
The environment though looking tough, of late has become quite encouraging for the textile companies. The following facts will prove that, Alok CFO goes on saying.
For India, the present situation has definitely created an advantage over Competing Countries.
Appreciation in Chinese currency coupled with increase in their labour cost has made them lose the cost advantage and competitiveness. Also buyers are looking at viable alternate to China to de-risk sourcing.
Uncertain economic conditions in the neighboring countries have shaken customer's confidence for timely delivery of consignments. Thus many countries shifted their orders to India.
This scenario has brought promising prospects for Indian Textile Industry.
Slowdown in USA and Europe has led to increase in demand for basic products as against products in the luxury segments. Discount stores like Wal-Mart have witnessed higher volumes. India has been traditionally catering to the medium and lower segment of the market, thus witnessing higher volumes.
During April to September 2008, ready made garments worth $4.87 billion were exported from India, up 7.04 percent from $4.56 billion in the corresponding period of previous year. In rupee terms, the figures work out to Rs207.6 billion, up 11.47 percent from Rs186.31 billion in April to September 2007.
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