The Hindu Business Line : Fallout of Chennai port strike — Leather footwear exports may be hit

THE recent 13-day labour strike at the container terminal in Chennai port that affected container movement may have dented the reputation of leather footwear exporters in the region as they struggled to cope with delivery deadlines.

Footwear manufacturers said even if the fallout of the strike did not show up immediately, the development may have made their overseas clients a bit unsure about the ability of Indian companies to meet deadlines.

Mr M. Rafeeque Ahmed, Chairman, Farida Group, a shoe manufacturer, said the drive to check costs had meant that the overseas clients' holding period of inventory had come down in the past. Therefore, Indian manufacturers had to deliver in time, in addition to being competitive in traditional parameters such as price, he added.

Industry sources said the country's image played a part in business deals. A situation such as the recent strike could spark panic among overseas clients, said Mr Muhamad Yavar Dhala, Managing Director, Forward Shoes.

The strike might negatively impact planned investments because companies may turn nervous about the environment, said industry sources.

The disruption took place soon after leather footwear exporters had had a good year and the mood was upbeat.

In 2003-04 (April-February) leather footwear exports grew by 25.06 per cent to record $475 million (Rs 2,137 crore), while the overall leather exports grew by 9.74 per cent to $1.89 billion (Rs 85 billion).

Industry sources said that during the strike, some of the overseas buyers wanted exporters to send consignments by air to meet deadlines. Since cost was a factor, the industry looked to the Tuticorin port to ship consignments to Colombo. Eventually, the industry's transport cost increased.

Chennai and Agra are key Indian centres for leather footwear exports. Industry sources said generally exporters in Chennai tend to serve the upper end of the export market.

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