Manesar leather product hub struck by inflation | SupportBiz

Vertical View

Manesar leather product hub struck by inflation

The rising cost of raw material is affecting the growth of the leather product manufacturing industry in Manesar, Haryana. On account of this, the requirement for investment in the industry has been steadily rising, leading to decrease in profits.

The units in the industry  are suffering due to inflation, insufficient availability of resources,  and  lack of effective conditions  in their running. There are over 300 units in this industry,  manufacturing  leather  jackets, trousers and shirts,  among other products.  The  industry employs  nearly 40,000 people, and earns  about Rs. 900 crore as collective annual turnover.

It  sells its products to various states within the country, and in other countries,  too.

“The cost of  raw materials,  like skin, has been rising frequently. Therefore, we  need to spend more to get high-quality leather in the market. However, the prices of the finished products remain stagnant, as  clients are never ready to pay higher prices, ” says  Raghav Chawla, one of the manufacturers.

“This has been affecting  the profitability of the cluster, and  growth  has been declining,” he says.

“We have to get  raw material from traders, as we do not have  any direct approach to  it.  Due to this,  the performance of the cluster has been affected,” says  Sandeep Kumar, another industrialist.

“ We also face several other problems such as irregular supply of power, poor linkages with nationalized banks, limited  resources, and the presence of Chinese products in the market, ” says  Manan Kapoor, another industrialist.

“The state government should  provide us alternative  sources of energy, such as a biomass plant, to avoid the hurdles in the smooth flow of work. There should be  awareness among the industrialists regarding the schemes provided by  nationalized banks to get proper and sufficient resources to run the industry. Measures should be taken  to maintain the quality of production, so as to conquer the market and decrease the demand for  Chinese counterparts, ” he says.

“The industry possesses the potential  to beat Chinese  competition, but it needs some support from the state government, ” he adds.