Chennai: The past few days have been traumatic for R Annandurai of Knitfab in Tirupur for multiple reasons — including asking nearly 250 of his ‘committed and dedicated’ staff to go home, as European and American buyers have either cancelled or suspended orders due to coronavirus pandemic sweeping the world.

“I had to send home nearly half my staff over the past two days as clients in Spain,Israel, and the UK have cancelled or suspended their orders. There is no point in keeping them and not paying their salaries,” Annadurai said. “It is a stretch”.

With five out of six garments exported to these two markets, the crisis is sweeping across the city, forcing factories or pink slipped workers..

“Each month Tirpur exports nearly 2,500 crore worth garments. We have not received any money from buyers for January and February. That makes it 5,000 crore in dues, all of which have been shipped and are locked in various ports due to coronavirus. Add another 2,500 crore in dues for March,” said Raja M Shanmugam, president of Tirupur Exporters Association and founder of Warsaw International.

Every European brand, Primark, S Oliver, Tom Taylor and others have either cancelled their orders or suspended it.

Irish retailer Primark, one of the largest buyers from Tirupur, in a communication said that it was seeing an unprecedented closure of stores globally. 

“Therefore, unfortunately we have been left with no option but to place a hold on any new orders. Additionally, we are reviewing the position in relation to all orders yet to be booked in prior to hand over. It is likely that in most circumstances we will have little option but to terminate those…..we would also recommend that you seriously consider putting on halt on all current and future production,” the retailer said in a communication to an exporter in Tirupur.

The situation has become untenable, exporters said. “We need an urgent stimulus package from the government. And not just that, we should be compensated for our losses. When monsoon fails, the farmer is compensated, why shouldn't exporters be compensated for no fault of theirs,” Annadurai said. The closely knit business units in the knitwear town works on the principles of revolving credit.

And changing markets is both tough and difficult. While the issue with exports is dented by Corona pandemic, diverting production to the domestic market isn't easy. For one, the export products are expensive and in a price sensitive market like India, it will not find many buyers and two the domestic market is by itself in the throes of an economic slump.

“Suddenly, everything has fallen apart,” summed up Shanmugam of TEA.

Published On : 21-03-2020

Source : Times of India

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