Closing down of factories in China due to Coronavirus scare threatens to affect the multi-crore knitwear industry as the delivery of consignments of apparel accessories is getting delayed.
If the consignments don’t arrive soon, the exporters might face financial loses as deliveries of garments to customers across the globe would get delayed due to the non-availability of accessories.
Accessories that are used in apparel like a zipper, inner lining, metal buttons and packaging materials such as labels, tags, and polybags are generally imported from China as they are cost-effective.
Exporters say they haven’t received any consignment after mid-January as factories that closed for the Lunar new year haven’t yet upped their shutters due to the Coronavirus scare.
They told DH that the accessories are imported from China since buyers too suggest them to go for cost-effective but quality stuff. The exporters’ explained that since factories haven’t worked for about two to three weeks now, the crisis would deepen as days pass. Also, consignments from Chinese ports are being delayed as ship calls at the harbors have fallen steeply in the last three weeks.
“We depend hugely on China for accessories like zippers. If the consignment from China continues to get delayed due to the virus scare, we may be in for a huge problem. The delay would push the product’s cost as we will be forced to procure raw materials from the domestic market which is expensive,” S Sakthivel, executive secretary of Tiruppur Exporters’ Association (TEA), told DH.
A leading exporter explained that some accessories are 200% costlier in India than the ones imported from China and the delay in consignment would lead to losses for manufacturing units.
“I can’t keep the goods with me for an indefinite period. If I procure raw materials from India and deliver the product, I would incur losses as the additional amount involved in buying expensive accessories will be on me and not the buyer as the price has already been finalised,” the exporter, who wished to remain anonymous, said.
The multi-crore industry is already facing a slew of challenges like heavy competition from neighbouring countries like Bangladesh and no clarity on certain incentives from the Union government.
Cheaper garments from Bangladesh, Cambodia, Vietnam and Sri Lanka have led to a slump in demand for "Made in Tiruppur" products in the EU and the US markets.
Tiruppur exporters’ have also touched base with their suppliers in China who have assured that their government is working to ward off the crisis and open ports so that the supply chain is resumed.
Another exporter expressed fear that the losses could be more if the crisis continues in China.
“If the delivery is delayed beyond a point, the buyer might even cancel the order. I will lose the entire money if the buyer cancels the shipment. We just hope that the factories would resume operations and consignments reach us soon,” he said.
