Tirupur, one of India’s best, self-developed apparel export cluster, is on a consistent growth mode and a remarkable aspect of this growth platform is the hub’s relentless capacity to overcome challenges regularly. Having an inspiring target of apparel export of Rs. 1 lakh crore by the year 2020, the cluster is currently having an annual turnover of Rs. 40,000 crore. As challenges within the country and in the overseas markets are something that exporters can’t do much about, the industry has to work on self-improvement for results. Following this mantra, some export houses of Tirupur have already started working inwards. They are implementing lean and adopting automation, skilling their existing and new workforce, deskilling with the increased dependency on machines rather than man… which is resulting into reduction of wastage and cost, improving productivity. Along with these technical improvements, the companies are also restrategizing themselves be it in the form of consolidating the buyers, adding new markets, new buyers within their existing markets or focusing on US and other emerging countries (Europe has been the main base for Tirupur till now). Export houses are doing woven also, along with knits which is the brand identity of Tirupur. They are working on different and new blends. This is how no stone is left unturned by the companies to survive, to grow further.
Currently, rough weather is looming over the entire apparel industry across the country, and Tirupur is no exception. However, this place has a ‘never say die’ attitude which makes it a winner under all circumstances. Setting an apt example of this vigour, T. R. Vijaya Kumar, MD, CBC Fashions shares, “Previously our company used to dispatch 97%, but now we dispatch 100% and further plan for excess quantity. Sometimes we book orders through buying houses…though margins are less in this domain, we still manage to make profit due to these productivity initiatives.” The company is implementing lean through Sri Lankan experts and is a part of a group of 13 companies who are working on collective approach. The representatives meet every month and understand each other’s working pattern, discuss their key problems, solutions, etc.
“Still lot of exporters are missing most of their deadlines and delivering late. This is one of the main reasons that Tirupur exporters are not working mainly with US buyers as they are strict on delivery time and don’t give any extension. As things are improving, Tirupur is working on right-time delivery.” – T.R. Vijaya Kumar, MD, CBC Fashions
Raja M. Shanmugham, President of TEA and Chairman of Warsaw International briefs about his success mantra stating,“Challenges are increasing at every point like Europe is working on 16 seasons in a year and we have only one month for any order in such a case. These kind of changes are not easy to adopt with automation. We have repositioned ourselves, and as one has to do, there is no other way. Existing as well as emerging competitive countries are getting stronger, and hence, the only way for us is to move swiftly towards Lean, Six Sigma, 5S etc. No company can escape from this. Without addressing these factors, we can’t sustain.” Warsaw International has also reworked its strategy with respect to its buyers.
Beyond Europe?
Due to Brexit and Euro fall, already many exporters of Tirupur are struggling to book orders from euro zone and are striving for reduced dependency on EU. Still, many Tirupur-based companies sustain by focusing only on Europe because of their weak progress in other markets. Raja elaborates briefly on the reasons underlining such thought and rightfully states: “Handling US-based buyers is comparatively difficult than dealing with European buyers as US buyers don’t have a strict line between yes or no, so risk factor is huge. This pulls back Tirupur from working actively with the US although US has a big order size and is a very important market. But dwelling upon the current scenario, Tirupur needs to gear up to work more with the US, and accordingly, companies need to change and improve. In fact, grown-up factories have already started moving in this direction, which is a good sign.”
“As far as growth in current fiscal is concerned, with the INR appreciating by leaps and bounds against the US $, and simultaneously other currencies falling against US $, we are facing a two-edged sword; so, we are facing very tough opposition due to prices.” – Sri Prakash Mundra, Rajat Collections
Though some exporters believe that sufficient quantities of knitted garment are already being exported to the US from Tirupur, Sri Prakash Mundra of Rajat Collections says, “We were earlier concentrating on Europe with large buyers. After the economic turmoil there, we had to look elsewhere and right now, we are exporting to the South American markets. But it is necessary to explore the US and other markets very much.” M Ganesh Babu, MD, Sudarsan Clothing shared, “We tried working for some US clients back in 2010, but as it was not profitable, we realized that our strength lied in working with European clients alone. We have also identified a good hub for several European clients here at Tirupur and have been working exclusively for a particular buying house. Sudarsan Clothing grew by 60 per cent last year and is rapidly moving to achieve the same growth rate this year too.
“Absence of mother/direct vessel to Europe is a challenge. Goods still need to hop out of Colombo to reach any European destination. This costs us a week on each of our shipments. The Government should either develop the Tuticorin Port or the Colachel Port more, so that it can harbour a mother vessel.” – M Ganesh Babu, Sudarsan Clothing
Beyond knits?
Having tasted popularity as a knit city, can Tirupur achieve its ambitious targets just on the basis of knitted garments or will it need to go for woven? Most of the exporters are of the view that some amount of woven garments in their product basket is an added advantage for their buyers as well as for themselves too. Some other export houses having factories in many cities of India don’t prefer to do woven at Tirupur and their focus is only on knits. But local exporters are moving towards woven significantly just as CBC Fashions which devotes 20 per cent of its total business to woven garments. “We have to look forward to knit-woven combination as many buyers are purchasing in this way. It gives comparatively decent price also,” says Vijaya Kumar.
M. Ganesh Babu voices somewhat similar opinion briefing, “Occasionally we receive one part of an ensemble in woven which we accept.”
Long pending demands for Government – supported labour hostels, an ESI hospital, not enough Government schools, shortage of power, inadequate water, poor transportation, and road safety are some of the issues affecting the industry’s growth. But State Government’s approach is almost nil on this issue. North and South Tirupur still don’t have better connectivity, though the industry is hopeful as Tirupur is selected for Smart City project and as such these issues have now higher chances of being resolved soon.
Beyond 100 per cent cotton
As use of MMF is on the rise, Tirupur-based exporters are keen to divert more towards this prospective field. But again here lies the obstacle of facing price constraint from competitor countries. TEA is approaching some of the popular fabric companies to make things cost-effective and motivate Tirupur’s exporters to try their hands in this new fabric. Blends with polyester in quantities much lower than 100 per cent cotton are now being produced in Tirupur. Cotton viscose, cotton modal, wool, linen etc., are seen everywhere. Some of the factories have even shipped order of 100 per cent linen (ladies top). However, the proficiency of processing of the polyester blends and knitted polyester in required gauges is missing when compared to Ludhiana or the export zones in Western India. If the process houses in Tirupur can compete cost-wise with their counterparts in Ludhiana and West India, there is absolutely no reason why there cannot be a substantial jump in such blends and the quantities can be in volumes. Blends are in the limelight throughout Europe as they offer better value and more necessarily, greater flexibility.
Skill Development/Labour Availability
Tirupur needs atleast 1.5 lakh trained labour to achieve its target on which the city is still struggling. Many exporters clearly said that they have not seen any positive impact of Skill India or other such scheme with regard to labour availability. Sri Prakash Mundra maintains an ‘absolutely not’ phrase on this matter. However, Ganesh Babu differs from others, saying, “Double weightage on sample expenses is a huge plus that the skill-development programme has offered. We have although not used it till date.” Raja insists that schemes in this regard need to change a little as per the need of SME sector. “We do have self-groomed labour rather than a groomed labour force. This is the biggest lacuna which needs to be address scientifically.”
“Government allocation is less regarding skill development as we asked for 1,00,000 trainees but got totally near to 20,000 trainees only in recent years. Through NIFT TEA, we are, therefore, training at own level too,” stressed Vijaya Kumar.
“Less MoQs and fast delivery are the biggest challenges as of now. We are presently working with US market also. As of now, we are not doing woven but, of course, we have to go for the same. We are expecting at least 20 per cent growth further.” – Rajendran, Director, Adarsh Knitwear
Near about 30 per cent of labour working in Tirupur is migratory and to sustain this workforce, companies are offering many facilities to them. Now a big chunk of this labour is living permanently in Tirupur as their children are reading in the schools here.
Tirupur vs. Dhaka
Exporters feel that for big volumes, Bangladesh was already a major competitor for Tirupur, but now the country has started selling smaller quantities also. Hence, this would be another gradual impediment in the development path of Tirupur since Bangladesh’s production cost is much low and productivity quite high. Tirupur exporters shared their helplessness on this front as things are going to be more critical in the coming days. Only FTAs are the plausible solutions in this regard. Vijaya Kumar, from his widespread experience, believes that Tirupur was never near to Bangladesh with regard to volume business. He further adds, “Dhaka wants to do value-added garments into volume also which is not possible. Our biggest buyers are placing maximum order of value-added garments of 10,000 pieces only. This is the only thing benefiting Tirupur but Turkey is emerging as our competitor as they are doing small orders also in value addition. Proximity to Europe and on-time delivery are the existing parameters in favour of Turkey.” Some other exporters revealed their disagreement on Bangladesh being a probable competitor for smaller and value-added orders as it is used to do volume comfortably. “Tirupur’s strength in handling the value segment will continue to give it a unique advantage over its global competitors. Ability to handle short deliveries, low quantity, high assortments, last minute style changes, multiple tires of sampling exercise are all hallmarks of the value segment,” maintains Ganesh Babu optimistically.
To tackle lesser lead time issue, some exporters, having in-house knitting, now prefer to source fabric rather than to increase knitting capacity.
Some of the exporters are outsourcing processing from Gujarat which shows that there is opportunity for Tirupur to increase its processing capacity.
Buying houses’ perspective
The Imperial, Tirupur, a 20-year old ISO 9000/14000 certified buying office, did some export orders with Japan but withdrew last year due to small quantity. Now its US business is in pipeline. Dr. G.Loganathan, MD of the company and Joint Secretary of Apparel Buying Agents for Textiles (ABAT) stated,“Tirupur must explore other markets but again competition on conventional products are high. Technical textile products are in big demand but Tirupur has to go long way to meet the quality requirements.”.
“We have biggest threat from Bangladesh with respect to price competition and this might lead to closure of MSMEs/SMEs. Besides, Bangladesh is equipping itself quite fast in technology and better-quality products.” – Dr. G. Loganathan, MD, The Imperial
The Imperial also handles woven orders and uses blends such as poly-cotton, cotton-viscose, etc. “Tirupur must provide product mix for further growth. Tirupur is yet to go a long way to make perfect quality blends,”added Loganathan. He further suggests that being cluster of MSMEs where professionalism is lacking, there is definite lack of coordination between technology and implementation.
Anandan of Knit Sourcing Inc. insists, “I don’t say Tirupur completely depends on European market only. It is a mixed market as we are working for US, Canada, South Africa, Australian clients apart from the European ones. We need to explore the opportunity with all potential countries across the world.” Knit Source Inc. is also into wovens, home textiles, and sweaters. “Our major strength is knits in which we can be very competitive in quality, pricing, delivery which we must focus. It is important for all to explore with various products to present before the buyers as their one-stop source destination,” says Anandan with a futuristic vision.
“The business is increasing despite all obstacles. We need to find a way of getting and meeting the clients for providing them their required products in order to be a winner. Providing buyers one-stop source with perfect quality will be a key factor. Increasing volumes with very sharp prices is vital.” – Anandan, Knit Sourcing Inc.
First year of TEA’s new team
• Focusing on 10 lean clusters, each cluster has 10 units. So, 100 units are being trained under Lean. This helps them improve their overall system.
• TEA is going to open a consortium purchase company which will buy/import in bulk for its exporters. Volume buying will reduce the cost.
• TEA’s branding committee is focused on Vibrant Tirupur to promote Tirupur and sustainable aspects like its efforts to start two ESI hospitals.
• Three common facility centres/projects are already approved by the State and Central Governments. Under these new projects, advanced machinery will be upgraded in NIFT TEA college.
• The new team created multiple leaders to address multiple issues, formed 18 different committees/panels to handle different topics (HR, Finance, Production, IE, Logistics etc..) with specialization.
• Highlighted issues effectively to the ministers be it import licence issue, anomaly of GST on jobworkers… All these collective efforts helped to increase the annual turnover of Tirupur.
