Small and medium entrepreneurs in Uttar Pradesh (UP) have found their own ways to counter the ongoing recession. Units in UP have been facing the crisis of increased price and supply shortages over 10 months. Firms in the fabrication sector are suffering losses due to the hike in the prices of steel sheets. In Bhadohi, in the carpet belt of UP, exporters have suffered huge losses after their orders were cancelled.
A leading silk exporter from Varanasi, Rajat Pathak, who exports his products under the brand name Madhuri Creations has prepared his own package to counter recession.
“We have decided to curtail the surplus staff in the unit and to freeze recruitment till the situation improves,” said Pathak. According to him, in a scenario where foreign buyers are not available, his product will be marketed in the domestic market at reasonable rates. He added his firm had recently received cancellation orders from Japan and Dubai. He also said he would be willing to try out the domestic market, in case his exports do not receive the desired response.
According to Vikas Sharma, a leading exporter of Varanasi Sarees, there has been a slump in the overseas market.
“We will cover our price in the domestic market,” he said . Rajat who owns Synergi Fabricraft said now in the current downturn there was nothing to be gained by participation in trade fairs and exhibitions. “We know that orders will not come, hence avoiding trade fairs is the best way to save money,” he said.
Pathak has also decided to negotiate with the various banks where he was having accounts. “Now I am asking them to have all my money in one account and give decent interest rates so that some money could be made out of the balance created during the heyday,” he said.
In cases where a firm has piled up stocks, the firms must explore domestic market and sell their produce at cheap rates. Another SME in UP, Empire Plywood, has started organising daily sales at its show room. Roli Singh, owner, Empire Plywood, said plywood is a commodity that is necessary for house construction.
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Still, he says, his firm is offering the product at very cheap rates to attract buyers.
According to Rajat, SMEs will have to reduce their margins to get new orders like the foundry owners in Kanpur have done. “After all, we have to survive and for this the business will have to be done on reduced profit margins,” he said.
A leader of traders in UP, Chandra Prakash Chabra, said that SMEs are not making much investment on the design development. There is no point in investing on design development in the era of recession. “One should consolidate business at this hour of time,” he said.