Garment export falls to 60 percent in May
Nepalbiznews.com, 7-Jun-2007
Fall in the export of Nepali readymade garments to the United States, the single largest market to Nepali apparel, is continued for the month of May with massive decline of 60 percent.
It is the fifth consecutive month this year that export of Nepali textile and apparel products lost ground. Garment exports to the US has been suffering from the very beginning of the year, witnessing a whopping decline of 54 per cent in January, 64 per cent in February, 47 per cent in March and three per cent in April.
The industry is in doldrums for the last couple of years, following the termination of quota regime under multi-fibre arrangement (MFA) in January 2005.
Exports had suffered a loss of 30 per cent in 2004 and rose to 41 per cent in 2005. However, it slowed down with a marginal drop of six per cent in 2006. As the US alone absorbs more than 80 per cent of the total Nepali garment exports, the single market concentration is blamed for such a plummet.
Garment and apparel products valued at over $2.25 million were exported to the US on May 2007, whereas garment products worth over $5.60 million were exported last year, reveals figures provided by the Garment Association of Nepal (GAN), Wednesday.
Continuous fall in exports indicates a difficult time ahead for Nepali garment manufacturers and exporters, as markets have already been opened for all competitors without quota restrictions, an exporter said.
He urged for enhancing the competitive strength of Nepali products to compete with big suppliers from India and China and other strong players like Bangladesh and Pakistan.
According to quantitative analysis, altogether 2152 kg of the commodity were exported during the month, whereas the figure for May 2006 stood at 11714.8 kg.
Besides building up competitive strength, diversification of markets and products has remained a major challenge.
Showing posts with label Garment. Show all posts
Showing posts with label Garment. Show all posts
Saturday, June 09, 2007
Garment production shifting overseas
Garment production shifting overseas
eKantipur.com, 28-May-2007
BY MILAN MANI SHARMA
Citing fragile security situation as one of the main obstacles for industrial operation, some half a dozen leading garment manufacturers have shifted their manufacturing base to foreign lands to retain their main clients.
The manufacturers that have pulled down the shutters due to labor strike have entered in a manufacturing deal with Indian, Sri Lankan and Vietnamese factories and are fulfilling their orders from there, an official of Garment Association - Nepal (GAN) said.
“Volume of such export is estimated to stand close to one-fifth of the export made through factories in Nepal,” said the source.
If GAN's estimates mean anything, then the figure of export through such overseas bases goes more than US$ 500,000. Moreover, such shifting of base has gobbled up jobs of some 3,000 Nepali workers.
Labor stir and industrial insecurity, besides eroding competitiveness have badly hit the Nepali readymade garment industry, reducing the employment in the industry down to 15,000 from 30,000 over the last couple of year.
“Incoming of those diverted production could have generated employment for thousands, but the fact is: it is the labor stalemate that has resulted in such an action,” GAN president, Kiran Saakha told the Post.
Entrepreneurs, however, preferred not to discuss about it openly lest that might attract authorities' attention -- as the act can be interpreted as investing overseas, which is prohibited by laws -- and draw trade unions' ire. Concerned government officials expressed their awareness on the matter. “But rather than addressing the problem that has caused people to lose jobs, they have prefer to maintain silence,” charged Saakha.
The saga of shifting the base started when labor stir forced some half a dozen companies, including leading ones, to pull down their shutters last year; and over a month-long terai unrest this year posed a threat to exporters of losing clients due to failure in meeting delivery schedule.
Such a situation mainly threatened entrepreneurs of losing orders permanently, said Uday Raj Pandey, general secretary of GAN, adding “In such a situation, there was no alternative but to fulfill orders by requesting manufacturers outside the country to help.”
Proprietor of Sirin Garment, Pandey accepted he himself fulfilled the delivery order by tying up the manufacturing deal with a party in India. “Since the situation in the industry still remains bad, the trend has come to stay,” he stated.
“Ours is a long-term business deal. No exporter wishes to lose his buyer, especially when rising competition has rendered buyers difficult to come by,” said an entrepreneur who has tied up the manufacturing deal with an Indian manufacturer in Hyderabad.
He said his decision to shifting the base and hammering out a deal with factories outside the country was not easy. “The hassle is too much and we also have to compromise on profit margin,” said he.
Given the situation, Pandey said that general mindset of such manufacturers was to resume manufacturing the orders from their own factory in Nepal.
However, amid latest ultimatum of trade unions to absorb all the workers and hike wages, which they fear would ignite fresh round of labor stir, manufacturers said they seriously doubt their chances of meeting delivery deadline yet again.
eKantipur.com, 28-May-2007
BY MILAN MANI SHARMA
Citing fragile security situation as one of the main obstacles for industrial operation, some half a dozen leading garment manufacturers have shifted their manufacturing base to foreign lands to retain their main clients.
The manufacturers that have pulled down the shutters due to labor strike have entered in a manufacturing deal with Indian, Sri Lankan and Vietnamese factories and are fulfilling their orders from there, an official of Garment Association - Nepal (GAN) said.
“Volume of such export is estimated to stand close to one-fifth of the export made through factories in Nepal,” said the source.
If GAN's estimates mean anything, then the figure of export through such overseas bases goes more than US$ 500,000. Moreover, such shifting of base has gobbled up jobs of some 3,000 Nepali workers.
Labor stir and industrial insecurity, besides eroding competitiveness have badly hit the Nepali readymade garment industry, reducing the employment in the industry down to 15,000 from 30,000 over the last couple of year.
“Incoming of those diverted production could have generated employment for thousands, but the fact is: it is the labor stalemate that has resulted in such an action,” GAN president, Kiran Saakha told the Post.
Entrepreneurs, however, preferred not to discuss about it openly lest that might attract authorities' attention -- as the act can be interpreted as investing overseas, which is prohibited by laws -- and draw trade unions' ire. Concerned government officials expressed their awareness on the matter. “But rather than addressing the problem that has caused people to lose jobs, they have prefer to maintain silence,” charged Saakha.
The saga of shifting the base started when labor stir forced some half a dozen companies, including leading ones, to pull down their shutters last year; and over a month-long terai unrest this year posed a threat to exporters of losing clients due to failure in meeting delivery schedule.
Such a situation mainly threatened entrepreneurs of losing orders permanently, said Uday Raj Pandey, general secretary of GAN, adding “In such a situation, there was no alternative but to fulfill orders by requesting manufacturers outside the country to help.”
Proprietor of Sirin Garment, Pandey accepted he himself fulfilled the delivery order by tying up the manufacturing deal with a party in India. “Since the situation in the industry still remains bad, the trend has come to stay,” he stated.
“Ours is a long-term business deal. No exporter wishes to lose his buyer, especially when rising competition has rendered buyers difficult to come by,” said an entrepreneur who has tied up the manufacturing deal with an Indian manufacturer in Hyderabad.
He said his decision to shifting the base and hammering out a deal with factories outside the country was not easy. “The hassle is too much and we also have to compromise on profit margin,” said he.
Given the situation, Pandey said that general mindset of such manufacturers was to resume manufacturing the orders from their own factory in Nepal.
However, amid latest ultimatum of trade unions to absorb all the workers and hike wages, which they fear would ignite fresh round of labor stir, manufacturers said they seriously doubt their chances of meeting delivery deadline yet again.
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