NEW DELHI, November 7: Trendy styles of Bollywood heroes and cricket stars notwithstanding, cap manufacturers in Delhi are in trouble. Reason? Orders from police departments, the major buyers for this segment, have been falling. Cap manufacturers have come up all over the country and have cornered the bulk of the business at the State level.

Some like Satish Mehra of Dwarakanath and Brothers are, however, optimistic. "Hats and caps will stay in the market till the Bollywood stars keep using them in new shapes, sizes and appearance," Mehra says.

Mehra points out that caps with popular brand names, like Reebok, written on them, are in great demand. Though fancy caps have a ready market with manufacturers in areas like Seelampur and Bara Hindu Rao in Delhi doing exclusively this, the industry is colourful only from above.

"Industry is dying," maintains G L Mehta of Mehta Cap House. "Within a year, we are going to close the cap and hat business."

To survive in the market, he is now diversifying into sarees and dress materials. Says Mehta, "We were supplying caps and hats to the paramilitary and the defence forces but for a businessman money is the prime requirement and in the saree market I can at least make some profit regularly."

However, Mehta, who entered the field in 1970 with an investment of Rs 65,000, will not completely pull out of this line. "In case, there are some orders, we will supply. But one can imagine the status of a business when last year we were able to have a turnover of around Rs 18 lakh only."

Apart from government departments, Mehta was supplying to private parties also but the volumes were not very big. "For entering the business a minimum of Rs 6 to 7 lakh is required though. But there is no future in this business."

Mehta is not the only entrepreneur to think on these lines. S K Jain of Mahaveer Hat Manufacturing Co says that with the prevailing rate of corruption in the government departments, future will not improve. "Corruption and favours are the primary reasons for the downfall. The officials favour the near and dear ones," Jain alleges.

Set up way back in 1944, Mahaveer Hat made a turnover of Rs 3 crore last year. Though the figure looks good enough, Jain is not a happy man since it means a 30 per cent decline in sales.

At first, the company manufactured Sola hats, a variety used while hunting and other outdoor activities. But with demand dipping and skilled labourers becoming scarce, they stopped the production.

The state governments' preference for local buyers restricts business. "The local people can handle the situation quite well and the state governments are imposing restrictions in passing tenders of outsiders," alleges Jain. "I had some queries from Jammu and Kashmir, Assam, West Bengal and some other states. But handling the state government personnel is a tough task. So, we missed the opportunity."

Dewan Chand, owner of Dewan Chand & Co, agrees: "It is the prevailing system and we cannot change it." Chand's 37-year-old set-up incurred a business of only around Rs 25 lakh last year. The slow payment process of the government organisations also dampens enthusiasm.

Besides, the official bottlenecks, labour also causes problems. "We cannot keep them busy the whole year, labourers often leave the organisation," says Dewan Chand. The workers are always on contract basis. The skilled labourers are not easy to get. "In such a competitive market, we cannot afford to pay more to the labourers."

Competition in the industry is growing and it has a adverse effect on the already shrinking market. Coupled with this, is the entry of Reebok and other multinationals. "MNCs will capture the market," proclaims Jain. "It is not due to their quality but it is due to their marketing and advertisement. Besides, there is a craze for foreign brands," says Dewan Chand.

Jain admits that MNCs have better testing facilities. "But the advertisements in the media helps them getting a better sale. Media is the most powerful segment in the society and MNCs are brainwashing people through the fourth estate." Adds Mehta: "If I have that much of money at my disposal to spend on advertisement, I can top the market."

Jain is particularly peeved with the government. "Why do they allow foreign companies to enter into the market of products which are meant for small-scale industries. The government is not taking enough care of SSI units in the business of caps," he says. "Export is also a prospective segment. Enquiries from abroad are coming. But it always passes through the hectic process of transaction," says Jain. Mehta, however, feels that money is the prime factor for supplying products abroad since no foreign party is willing to give anything in advance.

But Salim Ahmed of Salim Bhai Caps Exports is happy with exports saying that risk in the name of the game. "Fortune always favours the brave."

Till the time the young want to catch up with what Sachin swears by or what Akshay throws in the air, the demand for caps will continue to exist. But volumes will not rise till bulk buyers like the government bail out the manufacturers. As Dewan Chand says: "Only if the government makes any special project to promote the industry in terms of exhibitions abroad, is there any hope of survival."

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.