The Hindu Business Line : Footwear exporters bullish as demand grows

Footwear exporters are on an expansion spree as the demand from existing and new markets is growing strongly. Capacities could grow by 50 per cent during the current year.

Most large exporters such as Forward Shoes, Farida Shoes, Presidency Kid Leathers and AVT are on an expansion mode to meet the increased demand. Exporters have their hands full with orders and expanding production capacities is the only option, say industry sources.

New markets

The expansion is to cater to new markets, including the US, and new segments such as women's shoes and children's shoes. Indian exporters have traditionally focussed on men's shoes and the European market.

According to Mr Rafeeque Ahmed, Chairman, Farida Shoes, the company's capacity is expected to nearly double with a new facility coming up at Ambur, North Arcot in Tamil Nadu.

Integrated approach

The company has also gone in for an integrated approach by setting up component manufacturing and shoe equipment manufacturing facilities through leading international players. These include a shoe mould making unit, a hi-tech insole making unit for ladies' shoes - it will produce about 30,000 pairs of insoles a day.

According to Mr Zackria Sait, Managing Director, Presidency Kid Leather Ltd, the company has increased its production capacity to 4,000 pairs a day, a four-fold growth, in the last six months. In two years, the company hopes to manufacture 10,000 pairs a day. Europe and the US are looking to India and `huge orders are coming in'.

In Tamil Nadu alone, rough estimates indicate that production capacities could increase to about a 100,000 pairs a day or more in the next six months, a 50 per cent increase. In two or three years this could triple or even quadruple.

Forward Shoes is setting up a 10,000 pair a day unit with a 20,000 sq ft built up area at Pallavaram, a southern suburb of Chennai. This factory is expected to commence production in April 2007. Mr Muhammad Yavar Dhala, Managing Director, Forward Group, says: "Customers do not like to hear `no' more than once." When buyers come in to place an order manufacturers simply cannot afford to turn them away.

Viable alternative

According to Dr K. Elangovan, Executive Director, Council for Leather Exports, India has established itself as a viable alternative to China and Vietnam as a manufacturing base. Also the antidumping duty levies on China and Vietnam mean that they are costlier by more than 15 per cent. Leading brands are looking at spreading their supplier base and Indian exporters are benefiting.

Since order sizes are increasing, manufacturers are going ahead with setting up facilities for manufacturing shoe components.

With exporters hoping to expand into US, a large market for ladies and children's shoes, they need to be prepared for fast changing trends and fashions. So higher capacities and faster sourcing of components become key issues.

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