Shoe soles to apparels, input costs surge, labour shortage hurting now, Pg1

Key Highlights:

• The West Asia conflict has disrupted supply chains, causing a surge in input costs and labor shortages for Indian manufacturers.
• Footwear production is impacted by a 15% increase in sole production costs due to rising polyurethane (PU) rubber prices and disrupted mono-ethylene glycol (MEG) supply.
• Textile manufacturers face 10-40% higher input costs for fabric and plastic, along with PET price surges of 20-30% due to Strait of Hormuz blockades.
• Apparel exports to war-affected regions, accounting for $1.8 billion of India's $18.97 billion ready-made garment (RMG) exports, are threatened by declining consumption and increased shipping surcharges.

Detailed Insights:

• The footwear industry, India's second-largest producer employing 4.42 million people, is struggling as sole costs, comprising 40% of a shoe, have risen by 30%.
• Petrochemical shortages are a key concern, as these are vital for plastics, fertilizers, synthetic fibers, and rubber production, impacting various sectors.
• Textile factories are experiencing labor shortages as workers return home due to cooking gas shortages, exacerbating production challenges.
• The Confederation of Indian Textile Industry (CITI) has requested duty exemptions on cotton imports to mitigate the impact of rising PET prices on apparel production.
• Increased container shipment surcharges have raised the prices of apparel items, potentially reducing brand confidence and impacting future orders.
• Indraprastha Gas Limited has advised manufacturers in Noida to restrict Piped Natural Gas usage to 80% due to curtailed overseas supplies.

Key Concepts Involved:

• Polyurethane (PU): A polymer used in the production of flexible and rigid foams, coatings, and elastomers.
• Mono-ethylene glycol (MEG): An organic compound primarily used as a raw material in the manufacture of polyester fibers and polyethylene terephthalate (PET) resins.
• PET (Polyethylene Terephthalate): A strong, stiff synthetic resin used to make bottles, containers, and textile fibers.