Indian shoe majors are in dire straits as many worldwide manufacturers have cancelled a portion of their orders and placed on maintain the remaining for the winter season because of the COVID-19 outbreak.
In line with tough estimates, India exports about 130 million pairs of sneakers yearly, accounting for complete income of ₹25,000 crore. Two of the massive corporations — Tata Worldwide Ltd. (TIL) and Farida Group — collectively have 11 shoe manufacturing items unfold throughout Chennai, Ambur, Ranipet and Chittoor in Andhra Pradesh.
The ₹2,000-crore Farida Group deliberate to export 9 million pairs in FY20 and the ₹1,000-crore Tata Worldwide, 4.eight million pairs. Farida caters to world manufacturers similar to Clarks, Rock Port, Hush Puppies and Florsheim whereas TIL serves Alpine Stars , Caleres, Clarks, H&M, Deichmann, Geox,and Marks & Spencer, Massimo Dutti, Zara and Woverine amongst others.
“We supply our shoes to 10 international brands. Till date, we have received cancellation orders from eight brands that sell our products under their brand name in the U.S. and Europe,” mentioned Rafeeque M. Ahmed, chairman, Farida Group and president, All India Hides and Skins Tanners and Retailers Affiliation.
He mentioned the cancellation for winter season accounted for 40% and orders on maintain have been 25%.
“We have already purchased the raw materials for the next season. If we wished, we could operate our units in Special Economic Zones with 50% workforce, after obtaining special permission. But, we have decided not to go ahead,” he mentioned.
Farida group employs over 22,000 staff throughout its 11 subsidiaries. As a particular gesture, the corporate paid 15 days March month wage to its staffers and requested them to spend it correctly.
“There is a liquidity crisis everywhere. Overseas buyers are not willing to lift the goods as they have to pay various duties and warehousing charges. There is a huge pile up of inventories at their end resulting in stoppage of production,” he mentioned.“Uncertainty is killing us. We don’t know what will happen on April 14 and beyond that,” added V. Muthukumaran, head, Leather-based merchandise, Tata Worldwide Ltd and president, India Shoe Federation.
“This season’s sale is almost over. We will find the impact of COVID-19 during the next two seasons. Until then, we will have to reschedule our production,” he added.e Federation.
TIL companies about 25 worldwide manufacturers and it exports 96% of its manufacturing. As of now, TIL has obtained cancellation of 30% orders and 10% of manufacturing has been placed on maintain. TIL additionally paid 15 days advance wage to its staffers.