The weakening state of the U.S. dollar has created a new rash of problems for importers of textiles.
These difficulties are a result not so much of the fact that the dollar has gone south, but more to the fact that it happened so quickly. “It would not have been an issue had the dollar fallen over a period of time,” said Arpan Chaturvedi, director of India Covers Textiles. “But the falling of the dollar, and the strengthening of the rupee, happened in such a short span of time that we could not prepare ourselves well for the situation.”
Since it has happened, its effect has been overwhelming. “The currency problem is killing us,” said Bob Hickman, senior vice president of sales and marketing for United Feather & Down, which imports comforter and pillow shells from China. “We’re paying more for the products coming from China, and it’s also why we do little business with Europe anymore.”
Most of the impact has occurred with what Bob Hamilton, director of marketing for India-based Welspun, termed “marginal operators. They’ve taken some hits because they were working on slim margins to compete from the beginning. It will probably result in some fallout among these operators, either from going out of business or being acquired.”
The impact of the weaker buck hasn’t been felt everywhere. “The dollar remains stronger against our local currency,” said Muhammad Ayyob, chief executive officer of Pakistan-based Reach Expositions, “so there’s not much difference.” Dinh Van Quang, an executive with Hung Quang of Vietnam, added, “We are using the U.S. dollar in all business transactions, and the exchange rate with the Vietnamese dong is not changing much now.”
Those that have felt the impact have responded, in part, by rationalizing their production cycles. “We are trying to maximize our efficiency and to minimize waste,” said Manju Shrinagesh, director of India-based Design 45 Exports. “That is, we are trying to get our development of the product correct the first time around.”
Other companies are ramping up marketing efforts toward customers in other countries. “The U.S. is not the only stop on the railroad,” Hamilton said. “Other countries are expanding in their consumer markets. The only barriers to these companies’ entry in some cases is political—in other words, how much in imports those other countries will allow.”