Bankruptcy liquidation, 12000 people lose their jobs, India's largest textile factory closes down

Release time:

2019-07-30

Indian official media reported that Alok Industries, the largest textile manufacturer, has been submitted to bankruptcy proceedings and may be liquidated. About 20500 shareholders, including public financial institutions and retail investors, are staring at the company's impending collapse.

Alok's business involves the three major textile process chains of spinning, weaving and garment. The scale of personnel and production equipment are also ahead of the same industry level in India, and it is one of the top textile enterprises in India's comprehensive strength. As of March 31, 2017, Alok had 11759 full-time employees, which is quite large. If the business fails, it means nearly 12000 people will lose their jobs!

Due to various factors, the competitive advantage of China's textile printing and dyeing industry has weakened, while textile enterprises in India, Vietnam, Pakistan and other countries are developing in full swing. India, in particular, has many advantages, such as low labor costs and abundant cheap labor; suitable climatic conditions for the growth of cotton and hemp; the full opening of the Indian market by the United States, the European Union, and Japan. Alok is to seize the development opportunity, step by step to develop and grow, become India's textile big-name enterprises. So why is Alok now reduced to bankruptcy liquidation?

According to industry analysts, Alok is also a microcosm of the Indian textile industry, and its bankruptcy has sounded the alarm for textile companies in India and even China.

Production costs remain high and the development of textile enterprises is restricted.

Although India's labor force is cheap and raw materials are dominant, production costs are still high. The development of its textile machinery sector is backward, most of the equipment is introduced from abroad, and the import cost is high; due to the serious power shortage, its power cost is much higher than that of other countries; the country has not yet formed a fast and convenient transportation network, and its transportation efficiency is low. Transportation costs are also relatively high. In addition, in the past two years, the local government has also begun to pay attention to environmental protection issues, and the development of textile enterprises has been restricted.

Lack of awareness of strategic development and lack of economies of scale

India's textile industry is very competitive, especially among upstream enterprises, due to the lack of strategic development awareness, often play a "price war", profits are seriously squeezed, many enterprises closed down, the industry's investment enthusiasm is becoming weaker and weaker. Small and medium-sized enterprises account for the majority. Due to lack of guidance, economies of scale have not been formed and their ability to resist risks is weak.

The overall quality of the labor force is low, and enterprises lack the ability to innovate.

With the increasing importance of scientific and technological innovation, India's labor force is cheap, but the overall quality is low, and there is a general shortage of skilled personnel. If textile enterprises can not improve the innovation of enterprises, can not develop and research new technologies, new products, it is easy to be eliminated.

Thus, Alok's bankruptcy is closely related to India's economic environment. For a large enterprise, perfect textile chain, favorable environment, rich raw material resources, long-term accumulated technical strength, high-quality textile personnel and marketing professional team are indispensable. Any problem in any link can make the enterprise embark on the road of decline.

This is an era in which no innovation will die. The traditional textile industry needs continuous innovation to occupy the market with new products and new technologies. In addition, we should also pay attention to speed and service. Facing the increasingly globalized and open textile market, any country and any textile enterprise are facing opportunities and challenges. In the next few years, whether it is abroad or at home, the reshuffle speed of the industry will only get faster and faster!