Home / Knowledge / News / Textiles / Producers forced to sell at low margins to keep wheels running

Producers forced to sell at low margins to keep wheels running

16
Jun '09
The textile and garment sector has been hit hard due to the recessionary trends prevailing in global markets. But it has taken a worse hit at a place which hurts the most; profit margins. Increasing cost of raw materials and at the same time domestic as well as overseas buyers demanding lower prices, the manufacturer is squeezed from both sides. Fibre2fashion spoke to a few companies in India and Pakistan to find out how much the current crisis has impacted the industry players. We spoke to Mr Zeeshan Sattar, Director of Pakistan based Towellers Ltd and Mr Ajay Agarwal, Director of P.S Apparels in India.

We began by asking as to what was the main reason for shrinking margins to which Mr Agarwal said, “The customers due to global recession are looking at cheaper garments whereas our cost of production in India especially the labour cost has been going up, while Mr Sattar replied by saying, “Main reason being liquidity crunch due to which consumer spending has reduced considerably and retailers have to markdown the merchandise to sell. This result in surplus goods with stores having high inventory so less new demands and manufacturers in order to keep the production busy are pushed to sell at lower or even no margins”.

Next we asked them to comment on the actual hit in margins the industry has taken to which Mr Sattar said, “Any where from 10% to 20% depending on the item”. To conclude the interview we asked them as to when they foresee this crisis to end to which Mr Agarwal said, “There has been a substantial reduction in production capacity overall in the last 2 years which should hopefully swing the sourcing in favour of the vendors once the market demand picks up and Mr Sattar winded up the interview by giving a short and sweet answer “By end of 2010”.


Fibre2fashion News Desk - India


Must ReadView All

Pic: Shutterstock

Textiles | On 28th Oct 2020

Ascent to full recovery likely to be long, uncertain: IMF

The ascent to a full economic recovery will likely be long, uneven...

Pic: Shutterstock

Textiles | On 28th Oct 2020

Pak trade bodies demand duty-free cotton yarn export

Pakistan's value-added textile exporters have urged the government to ...

Pic: Shutterstock

Retail | On 28th Oct 2020

C&A avoids over 116,000 metric tons of GHG emissions

During 2019, C&A avoided more than 116,000 metric tons of greenhouse...

Interviews View All

Milind Khandwe, Hindoostan Innovation Centre

Milind Khandwe
Hindoostan Innovation Centre

‘Modern technical textile is an indispensable tool for science and...

Anvita Mehra, Confidential Couture

Anvita Mehra
Confidential Couture

‘It is going to take some time for Indian buyers to get accustomed to...

Neel Sawhney, One Friday

Neel Sawhney
One Friday

‘The share of kidswear segment in the online sector is still small in...

Kamal Kulshreshth,

Kamal Kulshreshth

Colorjet is among the fastest-growing wide format digital inkjet print...

Mukesh Bansal,

Mukesh Bansal

Vardhman is one of the largest integrated textile manufacturers of India...

Zillur Rehman,

Zillur Rehman

Cornerstone Systems offers consultancy to businesses for enhancing their...

Razvan Popescu, Directa Plus SpA

Razvan Popescu
Directa Plus SpA

Directa Plus is one of the largest producers and suppliers worldwide of...

Davide Vigano, Sensoria

Davide Vigano
Sensoria

Sensoria is a leading developer of smart garments and IoMe (Internet of...

Steve Cole, Xerium Technologies

Steve Cole
Xerium Technologies

Steve Cole of Xerium Technologies discusses the industry. Xerium is the...

Amiben Shroff, Shrujan

Amiben Shroff
Shrujan

From its modest beginning in the late 1960s, Shrujan has grown into a...

Madhu Jain, Madhu Jain

Madhu Jain
Madhu Jain

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

Nisha Chanda, Whistling Woods International School of Fashion

Nisha Chanda
Whistling Woods International School of Fashion

<div>A lack of upgraded courses in costume designing and fashion as per...

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

Leave your Comments


October 2020

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


Advanced Search