India’s capital of textile exports, Tiruppur

India’s capital of textile exports, Tiruppur in deep red distress! 📛📛

And, this is big trouble for the entire textiles industry.

Here is all there is to know 👇

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Tiruppur’s textile industry is not about big integrated end-to-end manufacturers, as in Bangladesh, Vietnam, Sri Lanka or China. It has:

🏭 7,300+ Garment making units
🏭 1,300+ Print & dye units
🏭 1,100+ Knitting units
🏭 800+ Compacting units
🏭 600+ Embroidery units
🏭 50+ Bleach units

Tiruppur is all about, separate factories for every stage of the process which work in clusters.

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It has been leading India’s knitwear exports.

FY18:
🇮🇳 Exports- Rs 51.3k cr
👉 Tirrupur’s exports- Rs 24.1k cr
🙌 Massive 47% share!

FY22:
🇮🇳 Exports- Rs 61k cr (Up 19%)
👉 Tirrupur’s exports- Rs 33.5k cr (Up 39%)
🙌 Share rises to an even better 55%!!! 🚀🚀

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But in FY23, all that changed.
Here’s what’s driving the deep distress 👇

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1st- Inflation & recession in the West

😓 Their people are prioritizing spending on fuel, food & debt repayments

😓 Unprecedented fall in market appetite- The pent-up demand has disappeared. Worse, demand has shrunk

😓 Thus, brands that had placed big orders & stockpiled garments have either revoked orders or are no more placing new ones

Means- A big drop in biz for Tiruppur’s exporters 📉📉

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2nd- 50%+ jump in cotton prices since the Ukraine war

😓 Most of Tiruppur’s factories work on man-made fibres

😓 Cotton prices thus directly impact margins. And for pre-committed orders, such big move in prices is a disaster

A wrecking ball.

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Impact on small/medium units:
📛 Comprise 90% of Tiruppur’s factories
📛 Many units have closed
📛 Many others have leased their facilities to others who still have orders

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Impact on large units:
📛 Reducing hours of factory ops
📛 Fired employees in big numbers
📛 Sending people on unpaid leaves
📛 Struggling to pay loan installments

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Overall:
📛 Capacity utilization is down by >60%! 🤯
📛 Earnings have taken a big hit

This means a hell lot for Tirrupur where almost every family is directly or indirectly earning its livelihood from the industry.

They have their fortunes attached to it.

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This gets worse.

👨🏻‍🏭 These factories need too many people to operate.
👨🏻‍🏭 Thus, they employ >2L migrant workers

The fear for factory owners is that if they fire the migrants, then it will be tough to get them back when orders come back

Thus, many factory owners are running losses 📛

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50 yrs back, Tiruppur was a small village in Coimbatore.

Today, its textile exports are >50% higher than Coimbatore’s total exports 🙌

They have grown past many tough times to grow so big. Thus, rooting with all hearts for their rise ⚡

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PPS: Data and content inspired from recent Livemint report.

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