The third survey performed by CMAI amongst its members displays the disaster the domestic garment goes by means of, with 74 % of its respondents seeing a 90 % drop in gross sales for the quarter ending June 2020. An extra 13 % indicated a drop of greater than 75 %. This signifies that 87 % of the trade noticed a greater than 75 % drop of their revenues in the 1st quarter of 2020-21.
The projection for the coming quarter (July to September) is equally grim. 95 % of respondents count on to function at lower than 50 % of their manufacturing capability. Of these, as many as 68 % of the respondents anticipate utilizing lower than 25 % of their manufacturing capacities in the subsequent three months.
The respondents don’t see a lot enchancment in the subsequent 12 months both. 21 % of the respondents count on to function at lower than 25 % of their capability in the coming 12 months, and 46 % count on to function at between 25 % and 50 %. Which means virtually half of the trade expects to function at lower than 50 % of capability in the coming 12 months.
What is clearly including to the worries of this largely MSME dominated sector, is the drying up of working capital funds, with producers not receiving funds from the equally burdened retail sector.
91 % of the respondents have acquired lower than 25 % of their dues in the final quarter – and near 85 % should not anticipating their dues to be cleared in the subsequent three months. In reality, 44 % of the respondents worry that 20-50 % of their dues will flip in to dangerous money owed, and one other 10 % count on even a better share of dangerous money owed.
“All these findings reflect an extremely grim future for the Garment Industry, and survival of many of the smaller players looks extremely doubtful,” stated Rakesh Biyani, President of CMAI.
“It will take at least another year for our Members to reach back to the normal business conditions,” added Rajesh Masand, Vice President.
Rahul Mehta, Chief Mentor CMAI cautioned about the extreme job losses in the trade. “Looking at the survey results, I would not be surprised if close to 25-30 percent units shut down. I am also expecting job cuts of 25-30 percent even in the companies that somehow survive this year,” opined Mehta.
The trade presently has round 85,000 factories, largely in the MSME sector, and employed round 12 million staff in the pre-COVID period.
