The global economic downturn has severely affected the export-oriented industries across the globe. The recessionary winds blowing in the US and Europe have also impacted the small–scale exporting units in Ludhiana. Negative sentiment is fast building among the players in this once-flourishing industrial hub.
Industries facing the heat
Ludhiana’s entire export sector, comprising hosiery units, engineering firms, cycle and bicycle parts suppliers and textile manufacturers, is feeling the heat of the global financial meltdown. Micro, small and mid-sized industrial export units in the city, which were once generating substantial business, are now facing flagging sales and dwindling profit margins.
As Gurpreet Kaur, Proprietor, Ludhiana Garments House, says, “We are witnessing a 30% to 40% decline in our revenue growth as compared to the last year’s figure. Contracting export orders and thinning profit margins have left us with no option but to cut down on the production.”
No relief for Ludhiana exporting units
The government attempts to infuse liquidity to aid small enterprises have not proved adequately beneficial. As Ashwini Mehra, Spokesperson, Khanna Knitwears, says, “Apart from the two stimulus packages, the government has not done much to help the city-based exporters access new markets. We are seeking extension of export incentives and tax relief to help us deal with the ongoing crisis.”
Banks and financial institutions are unwilling to fund small enterprises due to their low credit worthiness. Private lenders have also stopped providing credit to Ludhiana export-oriented SMEs due to the heightened risk of bad debts in such times.
Pressurised by an acute liquidity crunch, several SMEs have stalled production while some others in the region have closed down their units. Consequently, industrial output has taken a beating owing to the closure of these small enterprises.
With forecasts for the coming quarters looking bleak, small companies are advised to tread cautiously till the market shows signs of recovery.
Source: http://www.bestsyndication.com/?q=node/27022
Industries facing the heat
Ludhiana’s entire export sector, comprising hosiery units, engineering firms, cycle and bicycle parts suppliers and textile manufacturers, is feeling the heat of the global financial meltdown. Micro, small and mid-sized industrial export units in the city, which were once generating substantial business, are now facing flagging sales and dwindling profit margins.
As Gurpreet Kaur, Proprietor, Ludhiana Garments House, says, “We are witnessing a 30% to 40% decline in our revenue growth as compared to the last year’s figure. Contracting export orders and thinning profit margins have left us with no option but to cut down on the production.”
No relief for Ludhiana exporting units
The government attempts to infuse liquidity to aid small enterprises have not proved adequately beneficial. As Ashwini Mehra, Spokesperson, Khanna Knitwears, says, “Apart from the two stimulus packages, the government has not done much to help the city-based exporters access new markets. We are seeking extension of export incentives and tax relief to help us deal with the ongoing crisis.”
Banks and financial institutions are unwilling to fund small enterprises due to their low credit worthiness. Private lenders have also stopped providing credit to Ludhiana export-oriented SMEs due to the heightened risk of bad debts in such times.
Pressurised by an acute liquidity crunch, several SMEs have stalled production while some others in the region have closed down their units. Consequently, industrial output has taken a beating owing to the closure of these small enterprises.
With forecasts for the coming quarters looking bleak, small companies are advised to tread cautiously till the market shows signs of recovery.
Source: http://www.bestsyndication.com/?q=node/27022
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