Coronavirus: It is a war with an invisible enemy. The virus that started with Wuhan China has now impacted almost all parts of the world and is seen as one of the worst periods in human history. With lockdown of almost all major economies including China, US, Europe and now the recent being India is not only shaken up human race but also economies of all these countries. It is almost like world war 3 where the fight is not with any state or country but with an invisible enemy which knocks door anytime anywhere irrespective of caste, religion or country.
For the past few weeks, what we as a country and world have seen is unimaginable. We have been part of many conversations on what happened; how did this spread; was China at fault; why did the Government did not take appropriate steps from the beginning; Italy pays big price of callous attitude and many more theories. However, now our concern is not all this but the future of Textile industry.
The demand for the textile products and also for the domestic sales has come down to a grinding halt due to the panic situation created by the outbreak of COVID-19.
As we all know Textile Industry is very unique nature of Industry having various segments. Interest of each segments are different and it is being seen in the past that even sometimes it clashes between the segments.
Due to lockdown all factories small or big, spinning, weaving, garmenting & all allied etc. are closed and it cannot be said clearly when they will be allowed again to operate? We all witnessed how labour has been running here and there amidst all confusion as a desperate measure to safeguard his family from hunger. There is scare among the business community on account of cash crunch, supply chain disturbance & man power related issues.
We have more than 2000 spinning mills pan India with different spindles capacity. Big units which are controlled by big corporate houses are having labour residing in the labour colony adjoining the premises. Majority of labours are migrated from Bihar, UP, Orissa etc. and at present they are being taken care by employers. It is also pondered whether labour is staying at their wish or they were forced to stay as they were not having any mean of transport once the lockdown is announced. Further, it is question mark once the lockdown is lifted whether they will stay to work or rush to their homeland to check about their family members. At present, may be only raw material & electricity expenses are not been incurred but rest all expenses are direct loss to mill owner. There are various other issues like what will happened to material which were in process, it may go in second quality. All shipments are getting hold, LC will expire may result a renegotiation of prices etc. Definitely it will not be so smooth and easy path to restart after lock down.
Apparel industry will be severely hit as all over the world. Stores are closed and no sales are happening almost all buyers are cancelling orders or postponing orders as they have very big inventories, and they may not place further committed orders in next few months.
The daily wage worker that forms 80%of the workforce in garment factories is on road or back to their hometown. The challenge does not end here as the virus has impacted India’s major export destinations US and EU the worst affected areas. It will be very difficult to say when these countries will return to normal life; if they return how soon consumers will start spending as these lockdown will cause unemployment also. Retail chains are drastically cancelling orders and keeping shipments on hold; till the time they do not get rid of old stock new orders will not pour in. Total supply chain is broken.
Now, challenges are Safety, lack of supply & demand in addition to liquidity. Opportunities may be Medical Textile Products
We Indians are God fearing peoples & believefirmly in-destiny. We also know that tides will turn and take a different path. Most of the world was dependent on China now that dependency mode will change it will benefit countries like India. If India succeeds in this 21 day lockdown period or earliest possible and fights backs without much loss then it will be back to business cycle soon because ultimately food and clothing will remain the key purchases.
The volumes might go down but it will not disappear. Once life is back to normal people will shop also as months of lockdown and depression will motivate them to buy something new, look good and feel good.
Many are seeing this as a correction period but we hope that this correction does not take away livelihood of anyone today or tomorrow. In these tough times we all are together and keeping you updated about industry and global scenario is our duty.
All machinery manufacturers have also suspended their operation. Neither they are in position to produce the machines nor are customers in position to accept the delivery. Even once the machinery manufacturer will be able to start the production, customers may not be able to accept the delivery may be for another 3 to 4 months from start of operations.
As per recent survey of ITMF about the impact of Corona pandemic on the global textile industry, it says worldwide average @8% orders are dropped and expected turnover of 2020 will be down by @ 10% over 2019.
So, to conclude situation not good for any one and also may not be easy for anyone to restart the operation. On opening up after the lock down, industry may take a much longer time to recover It may be minimum 4-6 months to see back the normal business like situation, Even difficult to estimate the direct losses at present and difficult to foresee the issues will arise after the lifting of lockdown. Company with inbuilt strength in terms of strong culture and stable financial having a good amount of cash in books are expected to recover faster than others. The small & medium level companies will comparatively find tough to bounce back. Whereas it will be do or die for weaker amongst them.
We should start preparing to face the challenges which are being foreseeing ahead without much dependent on government relief, which may come but up to some extent. We also have to learn the lesson from the crisis like not to depend upon only one source of supply, shift towards localization, move towards variable cost models etc. Many global would shift buying from China to other textile producing countries including India subject to preparation & acceptance of challenge by Indian Textile Industry.