The Hindu Business Line : TN textile exporters await `great rush' of quota-free 2005

FINALLY the much talked about January 2005, the deadline year to liberate the Indian textiles sector from quota restriction, has come. And it has come quietly. But, for the textile industry in this part of the country, there is no deluge of orders as yet contrary to what has been projected some months ago.

Nor will there be one in immediate months either, if one goes by the impressions from some of the active players in textile exports here.

The textile exporters from south are keeping their fingers crossed as the New Year had dawned. All that they could give out at this point is the `promising feel good factor' of getting more export orders in coming months.

Right now they are busy rushing their shipments to meet January supply schedules. But the export orders placed in November 2004 were perceived to be higher at least by 15 per cent or so over those they received in earlier months and these orders are meant to be executed this month, i.e. during the quota-free period.

If this is an indication of the things to unfold, the quota-free regime is to shower higher work orders for the textile producers in the region, they believe.

Even as their garment factories are racing against time to meet the January delivery schedules, most of them are suddenly conscious of the paucity of production capacity. They are bullish on new export enquiries about which they would not be firmly knowing immediately but they are equally worked up on the possibility of potential importers pinning them down on the price front, because the latter has more avenues opened to them to scout for better supply arrangements at competitive rates in a free trade environment.

"The normal product cycle for garments being 60 days, the buyers would have planned out their requirements much ahead and for January/February 2005 bookings, the buyers and their producers would have already freezed their production schedule in November 2004 itself. That way we are now busy meeting the January delivery. The first rush of the quota-free garment exports has not happened right now and we hope that we'll be feeling the heat maybe after three or four months," said Mr R. Shivram, Executive Director of Tirupur-based Classic Polo.

Echoing similar sentiment, Mr Velu Marappan of Myco group, an integrated garment manufacturing/exporting company, said the beginning of the quota-free shipment may see a moderate rise of 15 per cent and it may not be the 30 per cent or 40 per cent rise that was projected all along. But the consolation for him is that China still would be facing the quota constraint for another three years and hence attract quota overheads for their supplies, which make Indian apparels export-competitive.

But the flip side, according to Mr Marappan, is the buyers of Indian garments have begun to turn the screws on the price front. "I have orders but unable to confirm prices," he says.

The Tamil Nadu-based textile exporters becoming conscious of the garment driven export surge in the coming months in view of the anticipated huge orders from major US stores/brand labels, there is a flurry of activity to acquire additional capacities by established organised textile mills.

The strong textile intermediaries manufacturers such as Super Spinning Mills Ltd, for example, is set on the acquisition mode to increase its yarn production capacity, especially in value added yarn production, to take advantage of the new export business opportunity in the changed global textile trade.

Similarly, Gujarat-based textile group strong in synthetic textile goods has moved to acquire two sick textile mills in Madurai to cater to the US market.

The watchword for the state's textile companies in the coming days, according to Mr Shivram, is restructuring business, an inevitable course if they have to synergise the available market opening and their production capacities.

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