The micro, small and medium enterprise digital textiles cluster in Ludhiana, Punjab, has rewritten some of its practices to adjust to the global recession according to the findings of a study commissioned by the International Labour Organisation (ILO). The study was conducted in June by the Federation of Indian Micro, Small and Medium Enterprises association with Market Insight Consultants.
The study found that the cluster suffers from a serious shortage of labour. Anil Bhardwaj, fabric print printer labour shortage was found to be a result of the National Rural Employment Guarantee Scheme which led to reverse migration of labour to the rural areas. About 5-15 per cent of the workers are from eastern Uttar Pradesh, Bihar and West Bengal and prefer to work closer to their villages. The study notes that there is a need to enhance the Ludhiana textile print printing cluster’s attractiveness, to attract migrant labour from other states.
Other factors causing labour shortages were the growth of SME clusters in Kolkata, and growing demand for manpower in Uttarakhand. Machinery at the units was lying idle due to the insufficient availability of skilled labour, the study says.
The cluster has sought to cope with the recession — which led to cancellation of orders and a pile-up of stocks of both raw materials and finished goods, uncertainties in future contracts, and delays in payments for goods exported, the combined effect of which was erosion of profits — through both strategic and tactical responses.
The strategic shifts have taken five forms. The first is a higher focus on the domestic market. Second, those with diversified businesses began investing more resources in other ventures and reducing their focus on digital fabric printing.
Third, the larger units — in search of higher margins — are attempting to build their own brands in the domestic market, though few have yet managed to gain competencies in retail marketing. Fourth, cost-cutting initiatives through process optimisation have been set in motion (this, too, is restricted to the larger units in the cluster). These efforts have taken the form of de-bottlenecking, mechanisation, multi-skilling and target enhancements.
