Jalandhar sports goods industry to see flat growth

Adidas' decision to shut down one-third of Reebok stores, decline in sports goods outsourcing from Indian units by global brands cast shadow in 2012-13

German sportswear maker Adidas’ decision to shut down one-third of its Reebok stores across India and the decline in sports goods outsourcing from Indian manufacturers by other global brands like Puma and Slazenger, owing to tepid demand, has cast its shadow over Jalandhar’s sports goods industry.

The industry, which was upbeat after the performance of Indian sportspersons at the London Olympics and had been expecting 10-15 per cent growth in the current financial year, maintained that growth would be flat.

Jalandhar’s 1,200-odd sports goods manufacturers – a majority of them being SMEs – generate annual revenues of Rs 700 crore, including exports. The industry supplies to global brands such as Webb Ellis, Reebok, Puma and Slazenger, as well as to the domestic market under local brand names.

In the wake of the Olympics, manufacturers were expecting growth in both domestic and exports markets. But they say in the last two months, sales have come down drastically. The slowdown has forced the global players they were catering for to scale down outsourcing work. In May this year, German sportswear maker Adidas decided to shut 300 of its 900 Reebok stores in the country, in a move to restructure its business amid financial irregularities discovered in its India operation.

Ranson Sports Industry Managing Director Raghunath Rana said, “We were expecting that success would boost the sports goods industry. But in the last two months, things have changed drastically. Manufacturers are not getting orders from global sports brands owing to the slowdown. The shutdown of Reebok stores has also affected manufacturers, as Reebok used to outsource sports goods from Jalandhar.

Anurag Chadha, managing partner of Universal Sports Industries (manufacturer of boxing equipment), said, “Growth in the domestic market, as in the export market, is not encouraging, as anticipated earlier by the industry. We are keeping our fingers crossed and expect a revival in the next quarter.”

His company manufactures boxing gloves. One of the oldest manufacturers in Jalandhar, it exports 90 per cent of its output and the rest is sold in the domestic market.

Rajinder Prasad, director of Em Cee Cee Sports Agencies (P) Ltd – which manufactures footballs, and badminton and boxing equipment – said, “Taking into consideration the current scenario, it is very difficult to register growth this year. As a majority of the manufacturers in Jalandhar caters to global players, the slowdown in their countries has affected local manufacturers.”

Jalandhar contributes 55-60 per cent of the total sports good exports from India, while the rest is contributed by Meerut (Uttar Pradesh) and the rest of India. Last year, the quantum of exports from Jalandhar was Rs 345-390 crore, and the contribution of the domestic market would probably be about the same.

However, Rana, who is also chairman of the Punjab Medium Industry Development Board, said in order to boost the industry, the government should create proper sports infrastructure at the grass roots level, besides facilitating research and development in the industry, so that they can compete at the global level.

The sports goods industry in Punjab provides direct employment to about 10,000 workers and indirect employment to 40,000 workers. The products manufactured include traditional products like footballs, cricket bats, hockey and cricket balls, hockey sticks, tennis, badminton and squash rackets, balls, soft leather goods and shuttlecocks.