The signs have been there for about a year now but it is finally confirmed that exporters in Tirupur are out of the muddy waters that adversely affect business in the region for almost four years. Helped by factors including favourable cotton yarn prices, knitwear exports from Tirupur increased to Rs. 20,730 crore (US $ 3.18 billion) in FY 2014-15 from Rs. 18,000 crore (US $ 2.76 billion) in FY 2013-14, a growth of 15.52 per cent in rupee terms and 15.94 per cent in terms of foreign currency; another Rs. 7,000 crore (US $ 1.07 billion) came from revenue generated in the domestic market. By 2016-17, a knitwear export is expected to reach the target of Rs. 36,000 crore (US $ 5.53 billion). Backed by strong infrastructure, pro-active players and buyer confidence, the Tirupur hub has set a target of reaching Rs. 1 lakh crore (US $ 15.38 billion) turnover by 2020, which will include a growing share of business in the domestic market.
Finally after some major set-backs, mainly related to environment issues, Tirupur has rightfully taken its position as the knitwear capital of India, accounting for about 50 per cent of the total knit garment production of the country and contributing 44.29 per cent to the total export basket in knits. According to a recent study by the Sripuram Trust, Tirupur, which employs around five lakh workers directly, has about 800 garment manufacturing and exporting firms and 1,200 merchant exporters. Of them, 300 garment manufacturing firms are producing garment for domestic market. Tirupur is also home to about 1,800 job-working garment manufacturing units, 425 dyeing units and about 3,085 supporting units including for finishing, embellishment, compacting and raising units.
Industry watchers feel that the export sector started regaining its lost market in FY 2011-12, but slow market conditions kept the pace slow, this year is considered an exceptional growth year with many industry insiders confirming that a noticeable amount of business has also come in from Bangladesh, which was struggling with its own internal issues related to compliances and rising cost of production. Currently China, Bangladesh and Vietnam are the major competitors for Tirupur exporters.
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A survey conducted by Apparel Online earlier in the year highlighted some interesting facts, reflecting the positive mindset of the exporters as also the improved business environment. The most telling finding that reflects positivity is that 58 per cent of exporters are expecting 15-20 per cent growth in FY 2015-16 while 25 per cent is hoping for 25 to 35 per cent and 17 per cent companies [doing business up to Rs. 10 crore (US $ 1.53 million) per year] are encouragingly sure about 50 per cent growth. Also, while 50 per cent companies claimed that the situation leading to the crisis in the city has improved to a large extent, 13 per cent companies strongly feel that Tirupur has recovered completely from the environment crises of a few years ago. In process to combat the crisis, Tirupur can boast of becoming the first textiles cluster in the country to have Zero Liquid Discharge Technology (ZLDT).
Every industry event held at the hub throughout the year reflected an upward growth movement… Technology providers are upbeat and many admit that investments are being made. At the 2015 edition of the Knit-tech show held in Tirupur every year, a very satisfied MD of Focus Garment Tech said, “We are working with this market from many years and now it is picking up strongly, so we expect extraordinary growth in the region over the next few years. While sewing machines will lead our sales, spreading machines, though expensive, will also get business and we expect to sell 5 to 10 sets over the next one year.” His statement reflected the majority viewpoint.
In the ‘Annual AO Top 100’ listing this year, 15 Tirupur companies were represented, up from 13 companies last year, second only to the DelhiNCR region. The collective turnover of these companies in garment exports was Rs. 2,805.57 crore (US $ 43.16 million), while group turnover Rs. 3,780 crore (US $ 581.53 million). Of these 15 companies, 10 companies have a turnover of above Rs. 100 crore (US $ 15.38 million), with Eastman Exports leading the way. The city also has the distinction of being very proactive on green issues with a number of Green factories coming up. In May 2015, KPR Mill Ltd. announced intention to invest Rs. 175 crore (US $ 27 million) for setting up a Green field facility with a capacity to produce 36 million garments per annum. The development they claimed comes on the backdrop of increase in interest from global customers in the knitwear hub of Tirupur.
Even relatively small companies are going Green… International Trading Company (ITC), situated at the Netaji Apparel Park in Tirupur is probably going to be the first ever Green sweater factory in India. The company, which has a turnover of around Rs. 25 crore (US $ 3.85 million), is investing Rs. 20 crore (US $ 3.07 million) in this new Green facility which will have solar energy of 300 KW on its roof to take care of the entire air-conditioning system, ZLD facility, water harvesting, vertical garden on the walls, and complete LED lights etc.
Besides environment management, the focus of the industry is now on noncotton based fabrics such as viscose, polyester, polymate, etc. as the hub is right now predominantly catering only for the summer-spring market. Once blended fabrics are added to the profile, the industry is expected to see significant jump in business, as buyers can explore options for the autumn/ winter market segment too. This will mean a steady inflow of business throughout the year. Various industry bodies are demanding that speedy execution of free trade agreement with European Union and Canada that could also substantially help the knitwear exporters increase their market share.
