Workshop on
Forex Risk Management at Udaipur
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Dr. R.K. Dhawan, Chairman, FIEO (NR) addressing the workshop. On the dais, from left, Mr. M S Khimesara, General Secretary, UCCI; Mr. Sunil Agnihotri, Director, FIEO (NR); Mr. Nilanjan Chattopadhyay, Associate Prof. IMT; Mr. Ganga Sharma, Regional Manager (North) TUV Rhineland. |
With rupee playing havoc, exporters are left with no option but to master the skill of foreign exchange risk management and optimise their business processes through quality certification to increase operating profits. FIEO’s Northern Region Chairman Dr. R K Dhawan said this while welcoming the participants to a workshop organized by FIEO on "Forex Risk Management, Imperatives of Quality Certification and Sourcing Buyers through Internet" on 12 April at Udaipur.
"Unabated strengthening of the rupee during last year eroded operating profits of the exporters to such an extent that many of them were forced to either close down their production units or run for cover in the vast growing domestic market," Dr. Dhawan added.
Quoting a recent survey conducted by FIEO among exporters during April 2008, Dr. Dhawan said, 92% of the exporters have confirmed their competitiveness being affected by the rupee going up. The survey estimates that while the competitiveness of 41% of the exporters are affected by 10 to 15%, around 29% of them are affected by over 15%.
Dr. Dhawan is of the opinion that to sustain in today’s international market it is necessary for the exporters to optimize their business processes so that they could continue working with lower operating profits resulting out of appreciating rupee, increased competition, global slowdown etc. He urges the exporters to go for quality certification for not only meeting the requirements of their clients but also for optimizing their own profits and increasing visibility of their products in global market.
According to Dr. Dhawan, business is solely dependant on the numbers of buyers one has and that access to hi-speed, low-cost internet provides vast opportunity for trading on the internet. During last seven years, from 2000 to 2007, he says, internet usage has grown by around 266 percent, with maximum growth in African region by around 883 percent. Referring to the Asian continent, he said that it was second in terms of growth in internet usage during these seven years, experiencing a growth of approximately 347 percent. 71% of the total population in North America, 57% of the total population in Oceania and Australia and 43.4% of the total population in Europe use internet. The whopping growth in internet penetration is not limited to Asia and Africa. During these seven years, North America experienced internet usage growth by over 120% while Europe saw a growth of over 231%. Dr. Dhawan added.
Given the global internet growth statistics, Dr. Dhawan said that the internet penetration was expected to grow tremendously in every part of the globe - be it in the developed or in the developing. The developments in the Internet technologies have removed distinctions between traditional marketplace and global electronic marketplace and the technologies enabled SMEs to compete with large business houses, he added.
Mr. S. S. Mann, Team Leader, Regional Treasury Marketing Unit, State Bank of India, New Delhi provided training on the techniques and tools like hedging, forwards and options etc. to protect exporters from the shocks of foreign exchange fluctuations.
Mr. Ganga Sharma, Regional Manager (North), TUV Rheinland India Pvt. Ltd., New Delhi addressed the exporters on the imperatives of quality certification and the process of installing quality systems in an organization.
Prof. Nilanjan Chattopadhyay, Associate Professor, IMT, Ghaziabad shared his experience on using internet as a tool to source buyers, enhance the visibility of the exporters using internet etc.
Mr. Gaurav Anshuman from ECGC discussed the ways and means to cover export credit risks which otherwise give nightmares to exporters when they conduct business across the boundaries without having sound knowledge of the buyers.
