Hawaii chappal units are the most affected, prompting some units in Kochi and Kozhikode to roll down their shutters. The economic recession has obviously affected the footwear industry in the state; it has became an unprofitable business now. Even some major players have disappeared from the field. The high cost of raw materials, exorbitant electricity charges and the unrealistic taxes are the major factors that affect the industry today, says an industry watcher.

Another impediment is that manufacturers only get a profit only after the sales, but they have to pay the taxes prior to that, says PVC Footwear Manufacturers Association state president Ummar Koya. They have to pay the tax to the retailer when the goods are delivered.

In fact, the footwear market in Kerala has been active in the last seven years. There are approximately 125 major chappal-manufacturing units in the state. These units collectively pay an annual sales tax of Rs 3.6 crore. The state produces 60 lakh pairs footwear per day, and thus 15 lakh pairs a month.

Seventy-five per cent of the footwear units in the state are in the Kozikode district. Kollathara, a village in that district, has 40 chappal-manufacturing units. Radiant Mould and Compounds, started in 1987, was the first footwear unit in the Malabar region. Gulf returnees are also active entrepreneurs in this sector. A chappal unit can be started with low investment, and this factor attracted the Gulf returnees; the machinery to set up a small-scale unit costs just Rs 5 lakh.

If a unit works for eight hours a day, it can produce 400 to 500 pairs of chappals. The production cost for this for a month works out to be Rs 3,54,871, and for a year it is Rs 42,58,452. Kerala produces 15,000 pairs of Hawaii chappals per day, but in the recent years the sales have drastically come down. The state, however, has now found an export market in neighbouring countries.

A reason for the trend is that Keralites now prefer leather footwear to Hawaii chappals. In my childhood, dhothi and Hawaii chappals were the favourites in villages. Not anymore. Modern, fashionable dresses have crept into our villages. Nobody wants to use Hawaii chappals outside the houses. Yes, we have started importing, but the prices are not competent, says T A Noushad, the proprietor of Nissan Footwear Manufacturers.

According to Noushad more than 50 small-scale manufacturing units in and around Kochi have closed down in the recent years. The manufacturers association has now requested the state government to take necessary steps to save the footwear-manufacturing units in Kerala.