‘Non-leather footwear component mfg park will be game-changer’

Phoenix Kothari Footwear, a JV between Kothari Industrial Corporation (KICL) and Phoenix Singapore, is setting up India's first component manufacturing park for non-leather footwear at Perambalur. The park, adjacent to its factory that makes Crocs footwear, is set to attract investments to the tune of $140 million from five countries. In an interview, Phoenix Kothari Footwear chairmanJ Rafiq Ahmed spoke about how the park will play a role in component manufacturing in India. Excerpts: Why is component manufacturing for non-leather footwear important for India?Component manufacturing for non-leather footwear is vital for us as we are dependent on imports for components and raw materials. If we can manufacture them in India, it offers several advantages. We can become self-sufficient in component manufacturing, and India can make athletic shoes at competitive prices for global markets. This first-of-its-kind park will not only cater to contract manufacturers in TN, but across India. Production of non-leather footwear in China has become expensive, while Vietnam is saturated. So the focus is on India. So, the availability of component manufacturing for non-leather footwear will encourage the setting up of new factories in India. What will be TN's contribution in the non-leather footwear segment?Tamil Nadu will be the source state for the Indian non-leather footwear sector. Over the next 10 years, we will start exporting footwear to China, which currently dominates the sector and overtake it. TN, a major contributor to leather products and footwear exports, will become a hub for non-leather footwear manufacturing too. Its contribution to India's total non-leather footwear production will be above 50% in both domestic and export categories. What does the park offer?This will be the first international component park for non-leather footwear manufacturing in India, and it will be a game-changer. Some components will also be for leather footwear. We have already signed 22 MoUs with component manufacturers across China, Taiwan, Singapore, Seychelles and South Korea for this. These companies have expertise in a range of components, including the manufacture of shoe machinery, factory and automation equipment, adhesives, EVA polymer and non-woven fabrics, microfiber leather, synthetic paper, textiles for shoes and bags, CNC engraving machines, hot melt films for the shoe industry, rubber machines, spray and printing equipment, circular knit for shoes and bags, ribbons, braids and shoelaces, and elastic bands and ropes. We are providing three options for component manufacturers: they can either be 100% owners, enter into partnerships, or we can build plug-and-play facilities for them. Which companies will be the first entrants in the park?The component manufacturing park is being established over an area of 190 acres. The companies with which we entered into MoUs were gearing up with their plans. However, the 50% tariff imposed by the US last year slowed down the process. With the US reducing tariffs on Indian goods and with free trade agreements (FTAs) with the European Union (EU) and the UK, prospects have revived. Zhong Bu Development Singapore (ZBDS), which will be making adhesives; Aiteck Automation Integration Technology Corp (Seychelles), whose main line of business is making shoe machinery and factory automation equipment; and Long John Tsung Right Industrial Co., Taiwan, whose main line of business is manufacturing textiles for shoes and bags, are likely to be the first entrants in the park. The ZBDS facility is expected to commence operations next year. What are your company's production plans?The JR One Kothari Footwear factory at Perambalur, where we manufacture Crocs, will have a capacity of 40 million pairs annually as we expand the facility. We are at an advanced stage of commencing production for Adidas at Karur, which will also have a capacity of 40 million pairs annually. As part of this, we are setting up a new facility at Padalur in Perambalur district and are looking for a fourth manufacturing unit at an entirely new location in TN. All four facilities together will have a combined annual production capacity of 100 million pairs and will employ more than one lakh people by 2028. How do you see the reduction in US reciprocal tariffs on Indian goods and FTAs with the EU and UK benefiting the Indian leather and non-leather footwear sector?Apart from these FTAs and the reduction in US reciprocal tariffs, we have already signed a trade deal with Australia. Also, India and the Gulf Cooperation Council (GCC) have started negotiations for a proposed FTA. Such developments are going to boost our footwear exports.