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Young garment exporters plan to diversify production

Submitted by webmaster on 11 July 2016
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Source: The Hindu

SA group of garment-sector entrepreneurs, who are part of Young Indians (Yi), is all set to embark on a mission to make Tirupur grow beyond the image of a knitwear hub.

They plan to diversify into denim and woven garment production on a massive scale by setting up production bases in countries from where they will get trade advantages to emerging niche markets.

"To start with, we plan to concentrate on African markets by setting up units for converting fabrics into finished apparels in certain African nations. Labour is available in plenty at lower cost there. Besides, there is access to good raw material base and power is available in surplus.

"Also, it should be noted that apparel production over the last one century has moved from Europe to Asia and is now on the verge of shifting to Africa", said S. Karthikeyan, a garment exporter and vice-chairman of Yi-Tirupur.

Advantage

Moreover, exporters will have distinct advantages if the finished goods are exported from such bases in Africa to other African nations.

Mr. Karthikeyan explained that apparel produced and exported from Tirupur attracts import duty of 36 per cent in South Africa, a country which offers immense market potential.

"Whereas, the same apparel produced in a country like Ethiopia, which tops the preference list of us at the moment, is eligible for duty free access to South Africa. This is because of the free trade agreements among many African nations. A country like Ethiopia has free trade agreements with even the United States and the European Union," he said.

Some of the young entrepreneurs feel that all that matters to succeed in the expansion of product range beyond knitwear was the presence of acumen to strategically manoeuvre trade wise and capitalise on factors that could ensure profitability and better unit value realisation.

A team of Yi members plan to visit Ethiopia to explore the modalities of setting up production units to convert fabrics into apparels.