Companies

Kerala’s umbrella industry in tatters

Ritu Maria Johny Mumbai | Updated on August 01, 2021

Representative Image   -  REUTERS

The pandemic has hit demand for umbrellas even during the peak monsoon season

Tony Vithayathil, proprietor of Speck Umbrella, which manufactures custom-made umbrellas for resorts and corporate gifting purposes, is worried as his revenue is down to one-third of what he used to make before the pandemic struck.

His company has not received any enquiries during the peak months of April to June. “Since hotels and resorts in Wayanad and Munnar are not functioning in full swing, we haven’t received any orders from them,” he says.

Started 10 years ago, Speck had an annual turnover of Rs 30 lakh, which decreased to Rs 10 lakh in 2020. “We used to get around Rs 6 lakh - 7 lakh in the peak three months. This year we barely managed to get around Rs 75,000 - Rs 1 lakh,” says Vithayathil.

Like Vithayathil, other companies that form Kerala’s Rs 700 crore umbrella industry are also in tatters due to the rising number of Covid-19 cases in the state. The Test Positivity Rate (TPR) in Kerala remains high, averaging at around 10 percent, and there is uncertainty about markets operating in full swing.

The industry whose ebb and flow depends on the monsoon season, has witnessed negative growth over the past two years due to the Covid crisis.

Joseph Thayyil, Director of John’s Umbrella, one of the country’s oldest and most popular brands, says sales are incomparable with pre-covid levels, but have only breached the 50 per cent mark. “The major issue is the closure of physical shops. We are selling through e-commerce platforms but here too there are operational hurdles when it comes to fulfilling the orders.”

Sales

The rush to buy the trendiest umbrellas for the season peaks ahead of the school reopening in the state in June. But for the past two years, children have been cooped up at home. Jojo Panthalookaran, owner of Deepam Umbrella, said he doesn't expect schools to reopen this year. “Sales are yet to touch 40 per cent this year. 2020 was better since we had at least 50-60% sales. We got zero sales in May due to the complete shutdown and lost potential customers in April, since lockdown was on the cards,” he says. Deepam Umbrella is struggling to sell even the last year’s stocks.

The fact that umbrellas are not considered as an essential good have taken a huge beating on the industry in Kerala. In contrast, the Maharashtra government had included umbrellas, raincoats and plastic sheets under essential items ahead of the monsoon season. The Kerala government should have also followed suit, says Panthalookaran.

Demand

The yearly demand for umbrellas in India is almost 120-150 million pieces. In the past three years, a fifth of the umbrellas sold in India were Chinese imports at cheap rates. However, increasing labour and raw material costs in China, and depreciating value of the Indian rupee have made its products expensive, thus reducing imports to about 7-8 million umbrellas. According to Sandeep Mehta, Business Executive of Sun Umbrella, the government should increase import duty on finished umbrellas from China. “Sales have taken a significant hit this year in comparison to 2020, since markets were shut. If the government had declared umbrellas as an essential item, it would have helped us,” says Mehta. He doesn't think sales will pick up in the coming months, but only by next monsoon, when more people will be vaccinated.

Chairman of Colombo Umbrellas, KN Marzook is “very disappointed” with the industry sales of in the last two years. “The last two seasons have been a total failure. All the major players in Kerala are sinking,” he says. According to Marzook, sales have barely touched 25 per cent of the pre-pandemic levels. Online orders are insignificant in comparison to the sales he used to get from over 2000 offline dealers. With last year’s stock still lying unsold, he says the government should extend financial aid for the industry. The Kerala State Umbrella Manufacturers Association has sent multiple representations to the government in this regard but these have not yielded any results. Marzook was forced to lay off nearly 100 workers because production had to be brought to a halt.

Published on August 01, 2021

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