Not long ago, the footwear industry in Agra saw healthy growth due to the high demand and robust sales in both the global and domestic markets. About a year ago, small and mid-sized footwear manufacturers and suppliers saw substantial demand for both men’s and women’s footwear from buyers in the US, Europe and West Asia. However, this scenario has changed drastically over the past few months.
Recently, there has been a considerable drop in sales, which has consequently had a negative impact on margins. This has resulted in tremendous pressure for the Agra footwear industry that is fighting to stay afloat. A sector, which once recorded a 27% growth rate, is now struggling to maintain its previous growth levels.
Dwindling exports
“The export revenues have declined considerably since the last financial year as orders from western B2b Marketplace are rapidly diminishing. A large number of small-scale units, which produced fancy shoes for international buyers, are now shutting shop due to decreasing sales in export markets,” says RK Khindri, Manager and Coordinator, Agra Footwear Manufacturers and Exporters Chamber (AFMEC).
Moreover, this year, the Agra footwear industry has witnessed a decline in demand in chief domestic markets like Delhi, Mumbai and Pune as well. The industry has seen more than a 30% drop in orders from January to March, this year. With the demand having slumped considerably, thousands of skilled footwear labourers and technicians across the city have lost their jobs.
Additional challenges
Besides dwindling export volumes, Agra footwear manufacturing units have also faced the adverse affects of delayed payments and lack of infrastructural facilities.
On the other hand, footwear manufacturing units based in well-developed regions like Noida and Chandigarh have access to better infrastructural facilities. This facilitates production of higher quality shoes at a lower cost, thus garnering the loyalty of both domestic and overseas buyers. This in turn, has hampered the business of small Agra footwear units, as majority of the orders are now being shifted to units based in regions like Delhi, Noida and Chandigarh.
Inadequate bank credit has further added to the financial predicament of small-scale footwear traders in Agra. “Despite the directives issued by the Reserve Bank of India (RBI), banks are reluctant to lend to SME units. They are turning down loan-against-inventory requests and are now demanding collaterals, which most of footwear units are unable to provide. Consequently, small footwear manufacturers have begun to resort to cost-cutting measures such as lay offs, which eventually lead to under utilisation of their production capacities,” says Kuldeep Singh, Proprietor, Aryman Footwear Exports.
Given the current scenario, small footwear units are banking on government aid, infrastructural reforms and assistance from financial institutions in order to recover from their recent loss.
source: http://www.bestsyndication.com/?q=node/27901
Recently, there has been a considerable drop in sales, which has consequently had a negative impact on margins. This has resulted in tremendous pressure for the Agra footwear industry that is fighting to stay afloat. A sector, which once recorded a 27% growth rate, is now struggling to maintain its previous growth levels.
Dwindling exports
“The export revenues have declined considerably since the last financial year as orders from western B2b Marketplace are rapidly diminishing. A large number of small-scale units, which produced fancy shoes for international buyers, are now shutting shop due to decreasing sales in export markets,” says RK Khindri, Manager and Coordinator, Agra Footwear Manufacturers and Exporters Chamber (AFMEC).
Moreover, this year, the Agra footwear industry has witnessed a decline in demand in chief domestic markets like Delhi, Mumbai and Pune as well. The industry has seen more than a 30% drop in orders from January to March, this year. With the demand having slumped considerably, thousands of skilled footwear labourers and technicians across the city have lost their jobs.
Additional challenges
Besides dwindling export volumes, Agra footwear manufacturing units have also faced the adverse affects of delayed payments and lack of infrastructural facilities.
On the other hand, footwear manufacturing units based in well-developed regions like Noida and Chandigarh have access to better infrastructural facilities. This facilitates production of higher quality shoes at a lower cost, thus garnering the loyalty of both domestic and overseas buyers. This in turn, has hampered the business of small Agra footwear units, as majority of the orders are now being shifted to units based in regions like Delhi, Noida and Chandigarh.
Inadequate bank credit has further added to the financial predicament of small-scale footwear traders in Agra. “Despite the directives issued by the Reserve Bank of India (RBI), banks are reluctant to lend to SME units. They are turning down loan-against-inventory requests and are now demanding collaterals, which most of footwear units are unable to provide. Consequently, small footwear manufacturers have begun to resort to cost-cutting measures such as lay offs, which eventually lead to under utilisation of their production capacities,” says Kuldeep Singh, Proprietor, Aryman Footwear Exports.
Given the current scenario, small footwear units are banking on government aid, infrastructural reforms and assistance from financial institutions in order to recover from their recent loss.
source: http://www.bestsyndication.com/?q=node/27901
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