The 3rd Survey conducted by CMAI amongst its members reflects the crisis the domestic garment industry is going through, with 74 per cent of its respondents seeing a 90 per cent drop in sales for the quarter ending June 2020. An additional 13 per cent indicated a drop of more than 75 per cent. This indicates that 87 per cent of the industry saw a more than 75 per cent drop in their revenues in the 1st quarter of 2020-21.
The projection for the coming quarter (July to September) is equally grim. 95 per cent of respondents expect to operate at less than 50 per cent of their production capacity. Of these, as many as 68 per cent of the respondents anticipate using less than 25 per cent of their production capacities in the next 3 months.
The respondents do not see much improvement in the next 12 months either. 21 per cent of the respondents expect to operate at less than 25 per cent of their capacity in the coming 12 months, and 46 per cent expect to operate at between 25 per cent and 50 per cent. Which means almost half of the Industry expects to operate at less than 50% of capacity in the coming 12 months.
What is obviously adding to the worries of this largely MSME dominated sector, is the drying up of working capital funds, with Manufacturers not receiving payments from the equally stressed retail sector.
Ninety-one per cent of the respondents have received less than 25 per cent of their dues in the last quarter – and close to 85 per cent are not expecting their dues to be cleared in the next 3 months. In fact, 44 per cent of the respondents fear that 20-50 per cent of their dues will turn in to Bad Debts, and another 10 per cent expect even a higher percentage of bad debts.