Economy, Business And Markets

Garment Industry Struggling to Keep One’s Shirt On

Garment Industry Struggling to Keep One’s Shirt OnGarment Industry Struggling to Keep One’s Shirt On

The garment industry has gone through drastic ups and downs in the past couple of years and is now struggling to keep the sizable market of men’s shirt production up and running.

“The current situation is dreadful and most of our colleagues have quit their job. The recession keeps getting worse and therefore, I do not recommend anyone to embark on this business,” the Persian daily Forsat-e Emrooz quoted Abbas Mortezaei, a veteran producer of men’s shirt, as saying.

He explains that production takes place in one of two ways. “Production based on received orders is one where limited numbers of shirts are sewn for a special group. The second kind is when production is for wholesale purposes, which is more capital intensive and requires full awareness of market conditions and good marketing skills,” he said.

According to Mortezaei, a plot of land as small as 20 square meters and two sewing machines will suffice to start business.

“Apart from the expenses needed to rent or purchase land, some 200 to 300 million rials ($5,800 to $8,700 at market exchange rate) are needed to get going. Not to mention, one also needs to obtain a license from Men’s Shirt Makers and Retailers Union,” he said.

He stressed that good patterns and polished cutting methods are key to a successful business in this field.

“The kind of textile used in the business is also another important factor. Domestic textile production is limited and the industry lacks standard quality,” he said.

“Yet there are very few quality brands of Iranian textile that produce very expensive shirts. These are often made in Isfahan, Yazd and Semnan. But the bulk of our raw material is imported from China, Pakistan, Taiwan and Turkey. Chinese textile, although cheap, has poor quality and happens to take its toll on production.”

Mortezaei laments the hike in import tariffs, which has in turn resulted in an increase in textile prices.

“All the thread we need is imported,” he said.

Javad Doroudian, the head of Men’s Shirt Makers and Retailers Union, said more than 3,000 production units have acquired the license to operate in the field.

“Close to half of these have shut down because of unfavorable production and market conditions, and the rest are operating at 30% or sometimes 10% of their nominal capacity,” he said.

One main problem faced by producers, according to the official, is abundance of contraband.

“The market is replete with low-quality shirts that are sold at very cheap prices. Unfortunately, there is no control whatsoever over the smuggling of these items, which undermines production and harms the domestic economy,” he said.

According to Doroudian, there was a time when domestic demand was met by production at home and the surplus was exported to regional markets.

“At present, 60% of the shirts in the market are imported. I regret to say that Turkish companies come to our country, hold exhibitions and are even granted incentives, while local producers do not receive the slightest support,” he said.

Noting that most of the domestically-produced shirts are more expensive than foreign brands, he said, “Iranian producers pay heavy taxes and insurance fees. On the other hand, shopowners happen to feel free to set whatever price they please amid lax supervision. This makes the price of Iranian shirts uncompetitive.”

“The punishing taxes and duties set on the businesses are ironic, given the stagnation in the market. We are in dire need of government support, otherwise more production units will shut down,” he concluded.