The Hindu Business Line : Italian shoe component cos ready to shift base to India

FIVE Italian shoe component companies are ready to shift manufacturing operations to India because buyers from Europe and the US have begun to source shoes from Asian countries such as India and China.

As the demand for shoe components comes from other countries, there is "no meaning in keeping factories there (Italy)," said Mr Rafeeque Ahmed, Chairman of Farida Group, an Indian shoe manufacturer.

Mr Ahmed revealed the interests of the Italian companies in India during the course of his address on the occasion of the Central Leather Research Institute's Foundation Day celebrations here on Saturday.

Mr Ahmed felt the interested Italian firms would most probably take on local partners to establish operations here. They were willing to invest capital in addition to bringing along technology, he added.

The possibility of the five companies moving operations here comes on the heels of three other Italian joint ventures this year in India in shoe components and tanning.

Tata International and Saba Soles had tied up with Italian companies to make shoe components, while Conceria Virginia Italy and the Chennai-based Forward Group had joined hands to start a leather tannery.

When Forward and Conceria announced their joint venture in January, Ms Laura Vierucci from Conceria, who was to lead the venture's marketing, said the Italian "tanning industry is in a flux because shoe making is outsourced. Our customers want us to move closer to manufacturing sectors."

Mr Ahmed said that Indian shoemakers who source components from Italian firms that are ready to shift operations here were keen on the move. Industry sources said once component makers moved here, Indian manufacturers were able to reduce the time and costs associated with operations, and thereby enhanced their competitiveness.

The growing international investment in manufacturing operations here has accompanied a robust export performance by the leather footwear industry. The Commerce Ministry's Council for Leather Exports' statistics showed that the growth in footwear exports was greater than that of the growth in total leather exports last financial year.

Between April and December 2003, footwear exports grew by 20.05 per cent over the previous year to stand at $351 million (Rs 1,544 crore). For the same period, total leather exports stood at $1.49 billion, an increase of 5.40 per cent over the preceding year.