Chairman Speech

Chairman Speech

SPEECH OF SHRI RAM BHATNAGAR, CHAIRMAN, WOOL INDUSTRY EXPORT PROMOTION COUNCIL AT THE 7TH ANNUAL GENERAL MEETING ON TUESDAY;THE 8TH SEPTEMBER, 2009 AT THE PLAZA ROOM, HOTEL MARINE PLAZA, MUMBAI.

I take pleasure in extending warm welcome to all the members of this combined Annual General Meeting of the three esteemed organizations of Indian woollen industry, distinguished guests and senior officials of the Government present.

The past year has brought economic hardship. Growth in the developed market has dried up as consumers face a collapse in real state prices, job uncertainty and a dramatic drop in income and asset values. Global recession and financial meltdown has also stamped out export market demands Many Retailers have filled bankruptcy in US & Europe.

The developed world economy is expected to remain weak for the rest of the year with US leading the pack as it faces flat to negative growth during this period. In Europe, real GDP growth is now projected to come in at 1.3% in the current year and at 0.2% in next year, with a mild recovery projected for 2010.

For Japan, the near-term outlook was weakened noticeably. In the last quarter of 2008, Japan's economy shrank at an annual rate of 12.7 percent confirming that the downturn which began in November 2007 may become one of the longest recessions the Japanese economy has ever seen. Japan’s unemployment rate rose in December as plunging exports prompted companies to cut output and workers, indicating consumer spending will weaken further. The global meltdown has, in no way, spared the textile industry. This industry, along with other Garment industry, is also feeling the pinch of financial adversity.

Impact on Indian Textile Industry:

During 2007-08 Indian T&C exports were valued at USD$22.4 billion of which textile exports accounted for USD$12.7 billion and garment exports accounted for USD$9.7 billion.

Slowdown has significantly impacted the major export markets of the industry i.e. EU27, the US and Japan thus, negatively impacting the Indian T&C industry. During April-Dec 2008, India’s garment exports grew by 7% (Y-O-Y) as against the growth of 9% (y-o-y) in FY08 whereas India’s textile exports declined by 4% (y-o-y) as against a growth of 21% (y-o-y) in FY08

Decline in export demand has resulted in drop in production of T&C industry. The Index of Industrial Production (IIP) for textile and textile products has witnessed decline of 1.44% from June 2008 to February 2009; the loss in production of 1.44% is estimated to have resulted in a loss of 5-6 lakh jobs.

I had the opportunity to meet Hon’ble Textile Minister Mr. Dayanidhi Maran with whom I discussed various issues adversely affecting textile sector. He assured me that he will look into them.

I also had the opportunity to meet the Hon’ble Commerce & Industry Minister, Mr. Anand Sharma & Mr. Jyotiraditya Scindia and put forward the concerns that exporters/textile industry is currently facing. The result of this you can see in the new the Foreign Trade Policy, which was released on August 27, 2009.

We have made a presentation with regard to the export promotion activities and up- gradation of wool industry to Ms. Rita Menon, Secretary Textiles & senior government officials. We have submitted suggestions to the Minister for reviving export growth:

DEPB Scheme should continue till March 2014. Besides, state and local levies should be integrated into DEPB until they are rebated by VAT. Moreover, DEPB/Drawback rates may be increased by 5% to add competitiveness to exports.
Special benefits may be introduced for export of branded products to encourage exporters towards brand building, which is a costly affair.
Export may be exempted from service taxes at all levels to make it competitive.
Application fees for obtaining Advance Authorizations- to be reduced from Re 1 per thousand to Re 0.25 per thousand

Measures taken by the Council:

We have made various representations to Ministry of Textile seeking assistance under MAI scheme:

Engagement of Expert/ consultant/Master Finisher for 6 months in India from abroad. This exercise will provide chance to Indian mills to learn the art and bring the India textile manufacturing at par with high end Italian weavers.
Business Delegation to visit Japan and Korea for market study. These are the major markets having good growth potential and study of these markets is essential to develop a suitable strategy for increasing market access. These countries import large volumes of woolen products from various countries, but as India’s share of export in these countries is minimal, we need proper and detailed study and thereafter plan a strategy for our exports into these countries.
Business Delegation to visit Columbia, Peru and Chile, for Market Study. These are the major markets having good growth potential and study of these markets is essential to develop a suitable strategy for increasing market access.
Visit of Designers to FILO 2009 Fair, Italy. Europeans has always been the fashion trend setter & their trade shows provide a fantastic opportunity to Network & learn about the market and competition. It will also give our designers an insight about the current fashion, trend, color forecast & innovation.
Visit to Milano Unica Fair 2009, Italy and Premiere Vision Fair, France.

The Way Forward

More flexible

Companies need to be more flexible in terms of planning and developing alternatives.

Every plan should be made keeping in mind all of the functions, business units, and geographies of a company and show how it can make the most of a specific economic environment.

Developing alternatives will mean developing as many options as possible that can be exercised either when trigger events occur or the future becomes more certain.

More aware

Companies should reinvent Better business intelligence.

To get this kind of business intelligence, companies need a network, typically led by someone with strong support from the top. A network is critical because information is most useful if it moves not just vertically, up and down the organization, but also horizontally. Assembling bits of information, facts, and anecdotes helps companies to make sense of what’s happening in an industry.

More resilient

Companies should focus on process and product innovation.

Process innovation will help companies to work effectively and save/ control cost, whereas product innovation will give an edge over the competitors.

Thus, I would like to conclude on the note that we are committed in our endeavor to achieve unmatchable excellence. We will work together as a team to attain a position that will place us in the top league.

On the behalf of WOOLTEXPRO I am grateful to Thiru. Dayanidhi Maran, Hon’ble Textile Minister, Shri Anand Sharma, Hon’ble Minister of Commerce & Industry and Shri Pranab Mukherjee, Hon’ble Finance Minister for the guidance and policy inputs, which help for the prosperity of the industry.

We are also grateful to Mrs. Rita Menon, Secretary (Textiles), Dr. J.N. Singh, Joint Secretary (Exports), Shri A.B. Joshi, Textile Commissioner and other senior officers of the Ministry of Textiles and Commerce for sorting out various problems faced by the industry.
I would like to extend my thanks to my colleagues Mr. Mohnot & Mr. Surendra Goyal for their support.

I would like to extend special thanks to Mr. Mahesh Sanil and all Staff members of the council for extending their support.

Thanks

Wool Industry Export Promotion Council

SPEECH OF SHRI RAM BHATNAGAR, CHAIRMAN, WOOL INDUSTRY EXPORT PROMOTION COUNCIL AT THE 7TH ANNUAL GENERAL MEETING ON TUESDAY;THE 8TH SEPTEMBER, 2009 AT THE PLAZA ROOM, HOTEL MARINE PLAZA, MUMBAI.