Winters are good for the hosiery industry but the drop in mercury across north India hasn’t really cheered the industrialists in Ludhiana. The hosiery industry of the city is not much optimistic about hot business this year, and is anticipating a season of flat growth.
Exports are down due to the global economic meltdown. And much stock is in the hold, due to a delayed onset of winter last time. What has aggravated the problems of the industry this year is the power crisis in Punjab, coupled with labour shortage. In this light, industrialists say there has been a 10 % fall in production this year. While they hope to clear their earlier stocks this season, an encouraging increase in profits is not anticipated.
Vinod Thapar, president of Knitwear Club, Ludhiana, says the industry is going to face a stagnant period this year. ?Last year, the growth rate was not more than five per cent. We hope we can stick to the same figure this year,? he stated. Thapar revealed that the domestic market for woollens is pegged at Rs 6,000 crore. ?Of this, 90% of the demand is fed by the Ludhiana industry. But things have become difficult for us due to labour shortage,? he highlighted.
The industrialists have come together to solve the problem of labour shortage by introducing greater automation. Thapar said new technologies are also being preferred. ?We are now giving training to the local labour in the skills required for the hosiery industry. The problem is that the youth in the state are not too forthcoming, as they consider it below their dignity,? he pointed out. Sandeep Jain, executive director of Ludhiana-based Oswal Woollen Mills Limited, told FE that due to the economic slowdown, exports are down by 15% as compared to last year. ?We are afraid of negative growth this year. The industry is feeling the pinch of labour shortage and power snags, which have led to an increase in costs,? he added.
VK Goyal, CEO, Vardhman Spinning and General Mills, adds that with the drop in temperature, the demand for woollens has picked up these days. ?We are hoping to clear the unsold stock of last year. However, due to less demand the domestic industry is forced to go in for production cuts and capacity underutilisation,? he stated.