Umbrella cos pray for rains

KOCHI: With excise duty squeezing their margins, umbrella manufacturers are now keeping their fingers crossed as the monsoon fans out in the country.

A weak monsoon will see them lose out to the cheaper Chinese umbrellas flooding the market. Heavy rains before the scheduled arrival on June 1 had caught them unawares, though it cheered them up since a major chunk of umbrella sales happens during this month.

In Kerala, which along with Mumbai, Kolkata and Delhi are leading umbrella-making and trading centres, the manufacturers are hoping to better the 18% growth rate achieved last year. The levy of 16% excise duty has seen the local umbrella prices shoot up by 18-20%.

The average price of an umbrella hovers around Rs 125 as compared with Rs 100 last year. The fully-imported Chinese umbrellas, which are comparatively inferior in quality, are selling at half that price.

“The price makes the first impression on the customers. The traders are now importing umbrellas from China and selling them under local brand names,” says Davis Thayyil, MD of Poppy Umbrellas, the largest umbrella manufacturers in the state with 36 lakh pieces per annum.

“We are importing most of the raw materials as good quality materials are not available in the country. The rising production cost and excise duty have put pressure on our margins. This can be offset only by higher business volume,” says KN Marzook, owner of Colombo Umbrellas and secretary of the Kerala State Umbrella Manufacturers Association.

Every year, new umbrella varieties swarm the market. It’s no different this time. Customers can choose one which fully closes on pressing a switch or, for that matter, the one which can be hooked to their belts. The market size in Kerala is at around 72 lakh pieces a year.

John’s Umbrellas, which had a production of 18 lakh pieces a year, has scaled down production after the imposition of excise duty. “We have represented to the government to withdraw excise duty. If the duty stays, then importing umbrellas will be a better alternative though it will mean the death of cottage industry comprising mostly women workers,” director Joseph Thayyil points out.

While Mr Marzook is upset by the feeble rains in the state in the last few days, Mr Thayyil sees it as a stabilising factor in the sales since the rains had arrived earlier than expected.