Apache Footwear India Pvt Ltd, the only manufacturer of Adidas shoe in the country, is hoping to double its production and exports in three years from now if the company is allowed to source its raw materials through a globally recognised supplier by Adidas.
Interacting with a group of journalists from Delhi at the SEZ at Mambattu, Nellore district of Andhra Pradesh, on a sponsored tour of the Ministry of Commerce, the company's General Manager, Mr Philip Chen, said that the company has 50 acres of land for setting up a strong supplier base to source leather components and other raw materials essential to making shoes.
Suppliers abroad
He said Adidas shoes currently manufactured in China, Vietnam and Indonesia and the supplier choice for the shoe-makers are solely at the discretion of Adidas. “We are trying to persuade Adidas to establish a supplier base here,” he said.
Mr Chen said that if Adidas gave the option of sourcing raw materials locally, it has the requisite land to accommodate the supplier. Right now, he said, the company produces 3.5 lakh pairs of shoes a month and this could be stepped up to eight lakh pairs. Since Apache is operating in the SEZ, the supplier also stands to benefit in working in a completely liberalised milieu.
Right now, he said, the company is importing raw material from China, Indonesia and Vietnam as it has no choice in vendors.
Mr Chen said the lack of a strong robust supplier base has deterred the company from utilising its installed capacity fully and this could be surmounted with the entry of a reputed supplier firm into the zone.
Logistics
He said the company has production centre and rubber room and raw material warehouse. Once the supplier base is secure, the company can cut its lead time from two months to just five days in shipment for overseas markets. In 2009-10, the company exported sports shoes worth Rs 250 crore.
Mr Chen further said the constraints in the availability of adequate skilled labour supply and water supply and electricity in Nellore had prompted the company to toy with the proposal to establish one more unit in Guntur district by way of a 100 per cent export-oriented unit (EOU).
Referring to the social benefits being generated by the company, Mr. Chen said that a majority of the 6,500 workforce employed by the company were women and the company has given scholarships to meritorious persons in the adjacent villages, besides providing street light facility, repairing of school buildings and granting furniture (chairs and tables) for schools.
The company has in-house medical facilities for workers as they deal with chemicals and other substances in the making of shoes, he added.