Economy

Chennai apparel units put thru the wringer

Our Bureau Chennai | Updated on June 06, 2012

apparel

Many shut down, plenty lose jobs

The apparel export industry in Chennai is fast dwindling. The city, home to over 400 textile and apparel export units three years ago, today has just around 100 units operating, says the Apparel and Handloom Exporters Association.

Over 33 leading players have shut shop in the last couple of years and the ones remaining have reduced production substantially, leading to job loss of over 40,000 people, says Mr Ranjit Shah, President of the association.

The industry in Chennai is facing severe competition from Bangladesh, the association fears. The sector is already feeling the heat of the duty-free pact signed recently with Bangladesh, the association adds.

A press release from the association says major domestic brands have made Bangladesh their sourcing hub, as the country with cheap labour costs was proving to be a cost-effective option compared to India.

Labour laws are also not stringent in Bangladesh, said Mr Shah. Power shortage and power costs are escalating the situation further. Labour shortage and high attrition rates are also adding to the woes, he says.

The big names still operating in Chennai include P.S. Apparels (owned by Mr Shah), Ambattur Clothing and Celebrity Fashions.

P.S. Apparels, which has two units in Chennai, has considerably reduced operations; while Celebrity is reeling under losses. Ambattur Clothing is increasingly moving away from India. Its units in Ambattur, Chennai, contributes to only 25 per cent of its total production. Much of Ambattur Clothing's manufacturing today is done at units in Bahrain, Jordan and Bangladesh.

Swethak@thehindu.co.in

Published on June 06, 2012

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