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#Demonetisation: Farm to loom, textiles totter

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Mumbai, Bhiwandi & Ahmedabad: Since the turn of the century, Bhiwandi — once called the Manchester of Asia — has wilted against competition from Bangladesh and Vietnam. Bhiwandi holds more than a sixth of India’s 6.5 million power looms — machines that manufacture fabric from yarn.

A congested city of about 1.5 million, 30 km north of Mumbai, it was once a key link in India’s cotton economy, which employs 25 million workers alone, the second-largest employer after agriculture.

The Indian textile industry is already challenged by falling exports, low productivity and rising prices. Bhiwandi has now been further crippled by the aftermath of the November 8, 2016, scrapping of 86 per cent of bank notes, by value.

Notebandi ne humko paanch saal peeche fek diya(demonetisation threw us five years behind),” said Asad Farooqi, 65, who has been running more than 100 power looms for about 30 years.

In this industry where son tends to follow father, Asad’s son, Aftab, 34, remembered how they lived in prosperity in his childhood, and that earning Rs 20,000 for a consignment was very normal.

“Last month, we earned Rs 17,000 from all our looms business,” Aftab said, with a wry smile. The Rs 20,000 of 1996-97 would translate to about Rs 70,000 today, after factoring in an average inflation of 6.5.

The textile industry, of which decentralised power looms and knitting are the largest components, contributes 2 per cent to India’s gross domestic product. Maharashtra, with more than 1.1 million power looms, is one of India’s largest power loom hubs, providing direct employment to a million people in Bhiwandi, Malegaon, Dhule, Sangli and Sholapur.

Only 20 percent of these (Bhiwandi’s looms) are running today,” said Mannan Siddiqui, President, Bhiwandi Textile Mills Association, who has spearheaded the attempt to revive Bhiwandi’s looms over more than 20 years.

Malegaon, 270 km to Mumbai’s northeast, is similarly struggling to keep looms running.

Bhiwandi is one of the key links in India’s textile supply chain — from farm to loom. Although there are no consolidated data, we found production cuts, job losses and revenue declines in an already struggling sector.

Cash rules critical parts of this supply chain: from farmer to yarn factory to yarn trader to power loom cloth manufacturer to wholesaler to retailer to consumer. Dyers, zip-and-button fixers and daily workers who lift bales are some of the poorest in this chain and they appear to be the worst hit.

Textiles were the largest creator of Indian formal-sector jobs, with 499,000 added over the last three years. There is strong international evidence that exports help create additional jobs and push up wage and income growth.

In Mangaldas market, the biggest textile market in Mumbai — a city once known for its textile mills and labour unions, both now relics of history – N. Chandrakant said business was 20 percent less than normal for the winter-and-wedding-shopping season, which runs from November to February. There was no business in the first week of notebandi.

“Customers are buying simple, plain shirt material, and demand for luxury items has reduced,” said Chandrakant. “People are being economical.”

Kripesh Bhayani, a cloth-and-apparel retailer in the same market, is also a garment maker who runs 17 imported fabric-weaving machines in a Mumbai suburb. He said manufacturing was unaffected, but finishing of garments — such as fixing buttons and zips — had suffered. Bhayani outsources these jobs to household industries, which work on cash.

While the demand for garments has dropped 30 per cent, wholesale demand has dropped 50 per cent, merchants told us.

“Our market remains crowded the entire day during the November-to-February season,” said Bharat Thakkar, Secretary, Mangaldas Market Cloth Merchants Association. “Sellers struggle to attend to the flurry of customers. The relatively empty shops today tell you everything.”

At Ahmedabad’s New Cloth Market, trade had fallen by 80 per cent, according Rajesh Agarwal, Secretary of the market association. He explained why 60 of his 80 embroidery workers had returned to their villages after notebandi: When sales dropped, his cash dried up, so he could not pay salaries. Workers, said Agarwal, preferred to go temporarily jobless than endure the hassle of opening accounts in already stressed banks.

“Slowing consumer spending has resulted in a slowdown in domestic demand for apparel and other end-products of textile industry in the immediate term as a fallout of demonetisation,” The Financial Express reported onDecember 3.

As a result, retailers cancelled their cloth orders from wholesale traders.

Wholesaler Sudhir Parekh explained how a boom at the start of November — when Diwali shopping season gives way to the winter-and-wedding-shopping season — collapsed afterNovember 8.

Cashless does not work there.


“A lot of inventory that would have been sold by now is stockpiled at my shop,” said Parekh, who works from Mumbai’s Mulji Jetha wholesale cloth market. “My cloth, which is my working capital, is lying here, and there is no way I can purchase more from the textile mills. I am stuck.”

This part of the textile supply chain is all cash: Consumers pay cash to retailers, who pay cash to wholesalers because it is convenient. Wholesalers, who place large orders with textile mills and pay through cheques or bank transfers, are not currently doing that because of the shortage of cash, driven by the drying up of retail spending.

Parekh said he was ready to go cashless, but his ability to do so depended on retailers and customers to do so.

Cashless transactions, however, dominate the large-volume purchases of cloth that traders make from textile mills in Bhiwandi, Surat, Ahmedabad, Tirupur and Coimbatore.

In Bhiwandi, Suleiman Rahil and Syed Nasar Ali, both in their 40s, were doing nothing when we met them. Both are loom workers who run five to six power looms, in whichever factory needs them. Both are from Pratapgarh district in Uttar Pradesh, and have five children each.

Rahil and Ali each earned Rs 15,000 a month beforenotebandi, they said. Their incomes are down by a third to about Rs 5,000 each, there is no work most days, and they spend their day looking for odd jobs, including in farms and other markets.

“How can a family with six children sustain itself on Rs 5,000 a month?” Ali asked.

Bhiwandi labour contractor Ashok Ahuja — who also owns about 60 struggling power looms — explained how half his workers, from various rural districts of Uttar Pradesh, Bihar, Jharkhand and West Bengal, left for their villages when work dried up.

Some have started returning. Ahuja restarted his looms in Bhiwandi on January 2, two months after he shut them down, right after wholesalers cancelled orders after demonetisation.

In Bhiwandi, Siddiqui argued that China, Pakistan and Bangladesh’s policies have benefited their textile industry, while India’s have enfeebled power loom owners like him, who must deal with not just low demand but daily price variations of yarn — the chief raw material for power looms — over the last four years.

The cost of yarn — which he buys from Mumbai — varies intra-day, “like the stock market”, said Siddiqui, as yarn traders increase or reduce the price according to daily demand.

On December 20, the yarn was selling at Rs 156 per kg. On January 4 the rate had shot up to Rs 178. When Siddiqui finally bought his yarn, it was Rs 200 per kg. “About 10 kg of yarn is enough to produce 100 metres of gray fabric, which typically sells at Rs 30 per metre,” said Siddiqui.

A 100-metre swathe of cloth fetched him Rs 3,000, of which Rs 2,000 went into buying yarn the day we visited. With the Rs 1,000 left, Siddiqui had to pay for workers, electricity and machine maintenance.

While the manufacture of yarn, the chief raw material in making cotton fabric, has largely been unaffected, the same cannot be said of ginning facilities in the same mills, where cleaned, seed-free cotton is obtained from raw, impure cotton. The slowdown between November and January was because cotton farmers were not accepting cashless payments.

“About 30 vehicles with cotton come to our mill every day,” said Mukesh Patel, who runs the ginning facility at Pashupati Mills. “On January 6, we had only five vehicles coming to sell cotton. The highest number we have seen after demonetisation is 15.”

“Farmers accept only cash as they have to pay their farm labour in cash,” said Patel. “Cashless does not work there.

By Abhishek Waghmare

Business

LinkedIn partners with Oracle to help HR teams attract right talent

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New Delhi, Oct 17: Cloud major Oracle on Wednesday said it entered into a partnership with professional networking platform LinkedIn to help HR teams attract, engage and retain employees.

A series of new integrations between Oracle’s Human Capital Management Cloud (Oracle HCM Cloud) and Taleo Enterprise Edition, and LinkedIn, will help HR teams to grow their talent pool and increase career development opportunities, Oracle said.

“The world of work is rapidly changing, and this is creating new opportunities and challenges for talent leaders,” Scott Roberts, Vice President of Business Development, LinkedIn, said in a statement.

“We are excited to be working with Oracle to create better solutions to make hiring and developing talent as seamless and effective as possible,” Roberts added.

The new integrations enable HR teams to take a holistic view of their talent’s experience, skills and career aspirations in order to achieve a meaningful alignment between each employee’s job responsibilities and an organisation’s overall business objectives.

They improve the candidate experience by enabling them to apply for a job via Oracle Recruiting Cloud or Taleo Enterprise Edition and identify and contact (via InMail) their LinkedIn connections who can best refer them for that job.

“The rapidly changing global talent market is forcing organisations across industries to rethink how they attract, engage and retain employees,” said Nagaraj Nadendla, Group Vice President, Product Development, Oracle.

IANS

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Hyundai’s Kona EV ready to hit the road

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hyundai Kona Electric Kona EV

Seoul, Oct 15: Carmaker Hyundai is developing a crossover sports utility vehicle (SUV) named Kona and the electric vehicle (EV) is reportedly ready to hit the road.

hyundai Kona Electric Kona EV

While industry stalwarts like Ford and startups like Tesla dominate the conversation around the future of the EV market, Hyundai is out here quietly developing the crossover SUV that can travel farther on a single charge — 258 miles, to be precise — than any other electric vehicle on the market, Engadget reported on Monday.

The Kona Electric has a 64KWH lithium-ion polymer battery pack delivering 258 miles per charge.

hyundai Kona Electric Kona EV

Notably, this make it the longest-range non-luxury EV, beating the likes of the Chevrolet Bolt EV (238 miles) and Nissan Leaf (151 miles) — and even Hyundai’s own Ioniq Electric (124 miles).

The Kona Electric or Kona EV is, unsurprisingly, based on the existing Hyundai Kona gas-powered platform.

“The exterior stylings are virtually identical, with the EV just 0.6-inches longer and 0.2 inches taller. The two models also share the same trio of trim packages. You’ve got the base SEL, then Limited and Ultimate,” the report added.

The SUV would be available in six colours, two of which are exclusive to the electric model.

IANS

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Sugar mills worry over surplus, talk of ‘industry collapse’

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New Delhi, Oct 14 : With the availability of sugar set to reach an unprecedented level of 44 million tonnes thanks to huge unconsumed stock from last year and expected higher production this year, an imminent threat of “industry collapse” is being talked about. This has pushed mills to consider producing globally-accepted high-quality refined sugar as the most promising way to dispose off the surplus.

The decision of Brazil, the world’s largest sugar producer, to lower production this year has given Indian industry an opportunity to fill the space. However, it will have to live up to global expectations, the National Federation of Cooperative Sugar Factories (NFCSF) has said.

It said the mills are planning to boost their exports by improving quality of sugar to 45 ICUMSA grade, a high quality refined grade and considered one of the highest purity levels globally.

“Currently, we produce sugar whose grade is between 100-150 ICUMSA. Till now, the domestic consumption offset the domestic output. So Indian sugar mills never bothered about producing high refined quality sugar as per the global standards,” NFCSF Managing Director Prakash Naiknavare told IANS.

ICUMSA is a global body and its rating is an international unit for expressing the purity of the sugar, which is directly related to the colour of the sweetener.

Brazil has decided to cut down sugar production by earmarking more cane for manufacturing ethanol, so India finds a space where the domestic surplus can be accommodated.

“To achieve it, we will have to produce sugar of 45 ICUMSA grade. It will take minimal efforts and capital to upgrade the existing machinery,” Naiknavare said.

India has a surplus (opening stock) of 10.5 million tonnes from the last season and it is expected to produce around 33.5 million tonnes of the sweetener in 2018-19 starting October.

So the total availability of sugar this year will be around 44 million tonnes against the expected domestic consumption of 26 million tonnes, thus putting a “burden” on the mills to clear huge sugar stocks in the backdrop of depressed retail prices — around Rs 37 per kg in the national capital compared to around Rs 40-43 a year ago.

As the sugar output in Brazil is to go down by almost 10 million tonnes, India is set to become the largest sugar producer in the world this year.

Naiknavare said it was “a god-sent” gift, which had provided India “with an opportunity to make perception that India can be a great destination” for high-quality refined sugar.

As per the initial estimates of the Indian Sugar Mills Association (ISMA), which represents private sugar mills in the country, India is set to produce around 35 million tonnes in the 2018-19 season starting October against 32.25 million tonnes in the previous year.

The NFCSF, however, said that the 2018-19 production figures would be around 33.5 million tonnes owing to the infection of white grub in Maharashtra and Karnataka, which damages roots leading to the death of cane.

The government can store three million tonnes. It will also help mills to export five million tonnes under the Minimum Indicative Export Quota (MIEQ) by compensating expenses towards internal transport, freight handling and other charges.

“The government’s assistance and incentives have been helpful to the industry. Even if we take all these into account, including 26 million tonnes of domestic consumption, there will be surplus of 10 million tonnes. If it is not disposed, the industry will collapse,” said Naiknavare, adding all stakeholders, including the ISMA, had started brainstorming on how to dispose the surplus.

The government, while announcing a bail-out package for the industry in June this year, had fixed minimum selling price (MSP) at the mill gate of Rs 2,900 per tonnes to ensure that retail prices do not fall further.

The average price sugar received at global market in last 15 days is roughly Rs 2,200- 2,400 per tonne.

However, the prices have been on the increase from last few days — 10.97 cents per pound on September 28 to 13.11 cents per pound on October 9 according to the International Sugar Organisation — a trend the Indian sugar industry finds positive.

Acting on the industry’s request, the central government had given a subsidy of Rs 55 per tonne of sugarcane to help mills to clear cane farmers’ arrears.

(Saurabh Katkurwar can be contacted at [email protected])

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