The Hon. Secretary of the Apparel & Handloom Exporters Association, the industry body for over 400 MSME apparel exporters from Tamil Nadu, Shri Nishanth Jain “appeals” to the Honourable Chief Minister of Tamil Nadu, not to extend the lockdown and to help save thelivelihoods of 1.5 lakh women workers who work in their factories.
Chennai, Kanchipuram, Chengalpattu, Thiruvallur, Madurai and Salem districts are home toover 400 MSME apparel manufacturing and exporting companies which have been here for 35-40 years.
These companies service the requirements of international clothing retailers and brands. The business of apparel exports in “seasonal” in nature where supplying goods on time is key to the fulfillment of the contract. Winter goods cannot besold in summer and vice-versa. There are huge penalties for delay. The dependability of the supplier is judged on basis of “on-time” deliveries incorrect quality.
The combined direct employment by these companies is approximately 1.5 lakhs workers, 90% of whom are women. These are highly skilled and trained workers who only know how to stitch and make clothes. They have no other source oflivelihood. These workers earn on average between Rs. 9000 to Rs. 11000 permonth.
Besides these direct workers, the ancillary industries of yarn mills, weavers, processing mills,dyestuff making, labels and tags mfg, corrugated boxes mfg units, printers, embroidery units etc. employ over 10 lakh people in the state of Tamil Nadu.
From the lockdown in March 2020 till mid May 2020 the industry has already undergone huge losses on account of order cancellations by many international clients. After restarting most of the companies have managed to resurrect part of theorders with great difficulty on the condition of timely deliveries which had already been delayed due to the initial 50+ days lockdown.
The post lockdown norms of social distancing have already resulted in curtailment of the capacities of all these factories.
The goods being manufactured by these companies have to be exported between June and September so that they can be put up in the overseas shops from August to November in time for the holiday season and Christmas.
If these goods are late the overseas clients will cancel these orders too and be verywary of placing orders with these companies in Tamil Nadu. Most of the clients will move to competing nations like China, Bangladesh, Vietnam, Sri Lanka and Cambodia for sourcing their requirements. Once these clients move out to other nations and vendors it will be extremely difficult to bring them back. Thiswould deal a deathblow to the industry and the lakhs of people it directly employs.
This 12days lockdown in Chennai, Kanchipuram, Chengalpattu and Thiruvallur has caused immense delays and fallouts with the international clients who have now not been able to get the deliveries of the goods they were supposed to get by the end of June. This 12 days lockdown will now have a cascading effect on the deliveries of goods committed for July, August and September.
Anyfurther lockdowns in Chennai and its surrounding districts will result in a veryhuge number of order cancellations (approx. USD 150 million) for these export companies and a complete loss of faith by the international clients on thefactories located in Tamil Nadu. They will not find the factories dependable tosupply goods on time, and will hence move out to the competing countries tosource their goods for subsequent months.
The resultof this will be catastrophic – shut down situation for 400+ MSME units directly involved in the apparel manufacturing and exporting activity and also of hundreds of more ancillary units. The largest fallout will be the resultant unemployment of lakhs of skilled workers who only know how to do one job and inan adverse economic climate like this will not have the fallback of finding jobs in any other industry too. The ripple effect on the state economy will be devastating.
The industry expects the government to understand the long term disaster it will cause by extending the lockdown or having any further lockdown and which will ultimately land up killing an industry that has been the mainstay for millions of workers and the largest employer after agriculture in the state for over 40years.