Business

PPE Manufacturing Helps Units Offset Huge Losses

At a time when the textile industry’s revenues are in free fall, units that moved into the manufacturing of PPE kits have not been as badly hurt. According to Dr Sundaram, Chairman, Indian Technical Textile Association, “The Centre’s order for 20.2 million PPE kits has helped some units offset huge loses. At Rs 635 for a PPE suit, the order for 20.2 million kits has pumped in Rs 1,400 crore into the sector over the last three months.” He however added this is nothing compared to the overall losses of the industry. According to another survey by the Clothing Manufacturers Association Of India (CMAI), apparel sales plummeted to a historic low of 84% since the lockdown, with little hope of a significant revival in the near future. CMAI survey covered around 1000 factories in the country. Only 22% of the factories were functioning by May end while 40% of them manufactured personal protection equipment (PPE). Over 83% of the factories surveyed with global marketing research firm AC Nielson’s help reported sales of under 5% in May compared to the same month last year. Rahul Mehta, the chief mentor of CMAI, cited the survey and said the apparel market was worth Rs 6.5 lakh crore in 2019 and they estimate it to shrink by 15% this year to around Rs 5.85 lakh crore. He added, in the April-June quarter, most brands and retailers would be unable to achieve over 15- 20% of their 2019 first-quarter sales. Mehta said the industry, which contributes 4-5% to India’s GDP, employs close to 12 million people. “It is our estimate that approximately 50% of the labour force is migratory,” Mehta said. It is learnt that stocks were piling up at mills even as the Centre on May 30 released details of the first of a three-phase plan - Unlock 1.0 - to lift stringent restrictions imposed to stop the Covid-19 spread. According to a textiles ministry official, National Textile Corporation Limited, under the ministry, has a stock worth Rs 130 crore but no takers. “Rs 70 crore worth raw material is also lying unused.” The official said mills are unable to dispense with the stocks because the “market is at a stalemate”. “This may change by July.” That nearly 70% of the workers employed in the industry are migrants has added to its woes as the lockdown led to their massive exodus cities.