Leather companies earn more from Armani on weak rupee

CHENNAI: The entire country is weeping over the recent slide in the rupee. But Mohan Sreenivas is a happy man, as are several of his industry colleagues. Being one of the few in the country who exports ready-made leather garments to the Armanis or the Hugo Boss stores of the world, his company Orient Express is set to make bumper profits on his sales with the rupee depreciating about 20% from the value it was fixed at when contracts were signed.

Joining him are other nondescript companies in several pockets in semi-urban India which supply ready products for brands such as Armani, Abercrombie & Fitch and Guess.

Leather product exporters are happy that, for the contracts already signed when the rupee was hovering at 58 to a dollar, magical margins are in the kitty. What makes it better is the fact that the industry has been in the dumps over the last year after demand in the European region dropped. "This makes Indian companies more competitive and we will get more orders. In the long term, there is scope for the industry to double and get more business from China and other markets," said Manoj Tuli of P&G Enterprises, an exporter of leather apparel. There are some hiccups, of course, regarding import of certain raw material like the chemicals required to make leather products. "We expect to see 12% growth over the next few months," Rafeeque Ahmed, an exporter of leather footwear and president of the Federation of Indian Export Organisations (FIEO), said.