Buying Houses urged to evolve Forecasting Mechanism

Mr. Subhash Mittal, Convenor (IT & EP) (3rd from right) addressing the meet. On Mr. Mittal’s right are: Mrs. Tinoo Joshi, Secretary General, FIEO; Mr. Sanjeev Agarwal, Associated Merchandising -Target Corporation; Ms. Anita Kumar, Triburg; Mr. Sunil Sethi, Alliance Merchandising; Mr. Ashish Gidwani, Continuum. On his left are Ms. Maysa Kurdali, Country Head, Kappahl Far East Ltd.; and Mr. R B Mathur, Chief Executive, Warp & Weft International.

At a business meet between exporters and buying houses organized by FIEO on 22nd March at New Delhi, Mr Subhash Mittal has said in today’s’ fiercely competitive international market, the buying houses are expected to regularly update the exporters with upcoming social and quality norms in importing countries that exporters are asked to comply with. While welcoming the participants, Mr. Mittal, who is the FIEO Convenor on International Trade & Export Promotion called the meet the first ever initiative on vendor development.

The meet, jointly sponsored by Port of Halifax, a subsidiary of Jeena & Co. and National Small Industries Corporation (NSIC) was joined by the buying houses dealing in apparel, home furnishings, carpets, leather bags and accessories, handicrafts, kitchenware, etc. The leading buying houses participating in the Meet were Alliance Merchandising, Indian Merchandising Services, Kappahl Far East, Triburg, Continuum, Associated Merchandising, Portfolio Merchandising, Indus Valley, East West Inc, and, India Inc.

Earlier, while initiating the deliberations, FIEO Secretary General Ms. TInoo Joshi said that the meet aimed at making the small & medium exporters aware of the changing requirements in the international market and sensitizing them to product design, development and innovation. She also highlighted the increased role of logistics in influencing new business models and compliance of international standards as ‘market enhancers.’

The participating exporters in general felt that buying houses should evolve a forecasting mechanism to inform exporters and suppliers on the emerging market trends. Some exporters pointed out that different buyers adopted different norms in case of certification by agencies like SGS, Smartwood, Soil Association, TUV, BSIS, UL, CE, etc. causing harassment to them. They also highlighted the cases of rejection by the buyers at the port of discharge in spite of 100% pre-shipment inspection conducted and approved by nominated agency of the buyer. In such cases, they suggested that the buying houses should encourage third party inspection system.

 A view of the participants.

The small and medium exporters joining the meet expressed their difficulties in meeting international norms applicable to jobs subcontracted to agencies located in remote villages. The representatives of the buying houses advised them to work with an approved list of sub-contractors to avoid non-compliance in this regard and also advised them to get such work done in clusters like the one initiated by NIFT.

Observations at the Meet

  • Cost reduction will continue to dominate as a factor for business enhancement.

  • Both economies of scale and price factor will be the driving force for consortium of manufacturers/exporters for market sustainability, Government intervention may, therefore, be required for setting up industrial parks, Common Facility Centre (CFC) etc wherever possible. This approach will minimize cost factors like electricity, water and such other utilities and logistics.

  • Norms and compliance should be in place for implementation as per mutual agreement. Suitable agency may provide service to SME’s in this regard to enable compliance.

  • SMEs should develop capacity and work environment in tune with global demand.

  • SMEs should continue to invest in product development to meet the growing global customers’ need irrespective of their status as cottage or other industries.

  • SMEs and Buying Houses may avail of the existing institutional support services like cost reduction technology, credit rating, certified quality control, etc.

  • Increased global competition requires even cottage enterprises involved in export to become more professional in terms of meeting delivery schedule, maintaining quality and raising the scale of production. They need to work on the principle of quicker turnaround time.

  • Government has much larger role to play in helping the cottage sector to reduce cost of production since much of the additional cost is on account of utility charges relating to electricity, water etc. on the one hand and added cost of raw material and accessories on the other.

The exporter participants unanimously resolved that the ISO 9000/SA 8000 and QMS certified exporters should be treated as branded Export Houses and such exporters should be eligible for premium pricing.

Mr. Sanjeev Agarwal, Manager, Merchandising and Mr. Shobhit Gupta, Manager - P.C. during the one-to-one day interaction.

Ms. Anita Kumar, General Manager (Merchandising) and a colleague from Triburg interacting with exporters in the one-to-one Business Meet.

Federation of Indian Export Organisations
New Delhi, INDIA.