Global non-leather footwear makers put best foot forward in Tamil Nadu

In almost a repeat of Apple contract manufacturers increasing their presence in India, suppliers to global non-leather footwear players like Nike, Adidas, Puma and Reebok are now flocking to India as part of the China-plus-one strategy.  While on Monday, the world's largest manufacturer Taiwan-based Pouchen has signed a deal with Tamil Nadu to come up with a Rs 2,302-crore unit, at least six other global majors are in the process of setting up their units in the state.

According to industry sources aware about the development global non-leather majors like Feng Tay, Hong Fu, Dean Shoes, Oasis Footwear, Sports Gear and Zucca are either in the process of setting up their units in Tamil Nadu or have already started works on this. Globally, more than 85 per cent of the footwear sold is non-leather.

“We have already allotted land to Hong Fu and now we have entered into a deal with Pouchen, which is the largest player. To create an eco-system of component industry too, we are in talks with Taiwan Footwear Manufacturers Association (TFMA) to rope in at least 30-40 mid-size companies too, so that an entire eco-system develops in Tamil Nadu,” said V Vishnu, Managing Director and Chief Executive Officer of Guidance Tamil Nadu (the state investment promotion agency).  

On Monday, the Government of Tamil Nadu signed an memorandum of understanding with High Glory Footwear India, a subsidiary of Taiwan-based Pou Chen Corporation, the world’s largest branded athletic and casual footwear manufacturer, that may see investments to the tune of Rs 2,302 crore and generate more than 20,000 jobs over a span of 12 years. The MoU entails the setting up of a non-leather footwear manufacturing unit in SIPCOT Industrial Park, Ulundurpettai, in Kallakurichi district. According to the state government, this deal heralds the rise of Tamil Nadu as a global non-leather footwear manufacturing destination and will be a beacon that will attract many more global players in the sector into the State.

“Non-leather footwear is a unique opportunity for India. Vietnam and China are the main manufacturing hubs for this. Most of these manufacturers are original manufacturers for players like Nike, Adidas, Puma and other global brands. Now, Vietnam is getting saturated and by moving out of China, they want to de-risk. Both these factors put together are helping us. Tamil Nadu is the first state to attract Taiwanese manufacturers, just like the Apple ecosystem, footwear ecosystem is also similar, that is global brands outsource to Taiwanese companies,” said Vishnu.  

In 2021-22, India’s non-leather footwear export was to the tune of $214 million. This is expected to get a new fillip with global majors flocking to Tamil Nadu.  On the other hand, leather footwear exports were to the tune of $2047 million during the same period. 

“One major reason why the state is attracting the majority of these players is because of a new policy for the sector that they came out with in 2022. In addition to the state incentives, manufacturers are being offered sops by the Centre too,” said Kozhikode: VKC Razak, Managing Director of VKC Group, a major footwear player based out of South India. 

According to Razak, earlier also such companies like Apache (supplying to Nike and Reebok) had marked their presence in Tamil Nadu.  He added that one major concern for the industry in India is lack of component supplying infrastructure. This is the problem that the state is trying to solve by roping in MSMEs through TFMA.