AP apparel export parks set to rake in Rs 200cr this fiscal

Exports from the two apparel export parks in Andhra Pradesh, which are the only operational parks among over 30 such parks in the country, are expected to double to Rs 200 crore by the end of the current financial year.

The total apparel exports from Andhra Pradesh, inclusive of those from the units outside the parks, are said to be over Rs 350 crore in the last fiscal. India's share in the $200 billion world trade in garments is a measly 2.75 per cent and Andhra Pradesh accounts for 0.04 per cent.

The two apparel export parks in the state are located at Gundlapochampally on the outskirts of Hyderabad and near Visakhapatnam. The park near Hyderabad is spread over 170 acres and is accommodating 32 units. Of these units, eight are already operational, while 10 units have began setting up their facilities. The remaining 14 units have recently got allotments.

"With the enquiries for land still pouring in large numbers, the management of the park has taken a decision to cancel allotments if these units do not commence operations in 90 days," Sushil Kumar Kanodia, president of Apparel Exporters Association of Andhra Pradesh, told Business Standard.

At the apparel park set up on a 145-acre campus near Visakhapatnam, six units have taken up 25 per cent of the land.

Coimbatore-based Kadri Mills is said to have envisaged an investment of Rs 1,000 crore in the park and is seeking the entire remaining land at the park. The company is likely to set up three manufacturing units "� textile, garments and bath robes.

Following representations from the association, the state government has recently acquired 480 acres for the third apparel park near Shamshabad and named it as Garment City. However, the transfer of land to the department of handlooms and textiles and subsequent infrastructure development by the department is likely to take another nine months.

With the quota regime slated to end from the next calendar year, garment exporters are scampering to set up units at apparel export parks in view of various concessions available therein.

Demand has so far outstripped supply and the new state government that is voted in should accelerate efforts to complete the remaining 13 apparel export parks sanctioned for Andhra Pradesh, Kanodia said.

Pointing out that time was running out for the Indian industry, Kanodia regretted the lack of seriousness both on the part of the industry as well as the administrative machinery.

Konodia, however, was all praise for the pro-active efforts of the Andhra Pradesh government which had fulfilled all promises of concessions and infrastructure facilities for the two parks. The total investments at Hyderabad Park alone amount to over Rs 120 crore and the entry of Kadri Mills would take the figure up significantly, he said.

Kanodia claimed that the garment industry would stand next only to agriculture in providing massive employment to the rural populace in the years to come. The planned parks are to be established only in rural areas. Besides, there is a qualitative improvement in wages also. At Gundlapochampally Park, the minimum wage has gone up from Rs 1,600 three years ago to around Rs 3,000 now.

Mentioning the serious threat from the Chinese players in the post-quota regime, he said there was an urgent need for operationalising the apparel parks on a war-footing. The industry had also been urging the government to allow contract labour system to increase the productivity of labour.

Citing an example, he said the total production cost for a shirt is Rs 17.60 in China and Rs 28.43 in India. The Indian units are currently operating at 55 per cent efficiency, compared to 100 per cent efficiency of the Chinese units, Kanodia said.

If India attains 85 per cent productivity efficiency, the production cost at Rs 18.96 per shirt would be comparable to that of the Chinese units.