Olympics pinch Agra shoe business

Shoe-making units face shortage of raw material like foam, adhesives and dyes, chiefly imported from China, which asked its facilities to shut down due to environmental concerns.

Agra’s footwear industry, already facing labour shortages, is now battling raw material shortages. Material like foam, adhesive, dyes etc has been in short supply for over a month now. The small scale units have cut down production to tide over the shortage. Most of the material is imported from China.

Industry sources say the shortage has resulted from the shutting down of raw material manufacturing units in China, a couple of months back. The Chinese government asked these units to close down as environmental protection measures before the Beijing Olympics. This led to the present disruption in supplies and a rise in prices by over 30 per cent.

Speaking to Business Standard, Govind Magan, co-proprietor, Shanti Shoes, claimed that though there was a shortage of raw material in the market, mid-sized footwear units were able to maintain their production rates. He added most mid-sized units maintained adequate buffer stocks and the only setback for these units had been a rise in packaging prices, which had caused a slight reduction in profit margins.

Ikraam Hussein, owner of a small scale footwear factory in the Mantola area of Agra, said the units which operated on a small scale were suffering as they lacked the capital to maintain adequate raw material inventories.

He added nationalised banks were not interested in giving loans to such factories to facilitate their expansion, while private banks offered only personal loans.

Sources claimed the crisis was temporary and was expected to continue for just a few more months after the Olympics, till the Chinese factories gradually began production and supply lines were re-established.

Hussein said most small factories produced footwear which was sold directly to traders in the shoe market of the town. If the factory owner was unable to provide his worker enough material to produce his day’s quota, the worker was bound to seek employment elsewhere, causing further shortage of skilled labour in the factories.

Meanwhile, the restarting of the five-storey footwear market project in the town has come as a relief to small units, who wish to retail their products directly to the buyers instead of going through middlemen.

Deoki Nandan Son, president, Agra Joota Dastkaar Shoshan Unmoolan Sangathan (Footwear Workers’ Exploitation Prevention Organisation), said the footwear workers and small factory owners would get immense help in direct marketing of their product in the new market, though financial assistance from banks was a prerequisite for obtaining a shop as the cost of obtaining a lease in the market, being developed by the Agra Development Authority, was high.