A Collaboration Between United Students against Sweatshops Jobs with Justice Society for Labour and Development

March 2007



Chapter One: Introduction ............................................................................ 3
1. Methodology ..............................................................................................................3

Chapter Two: Agency Profiles
1. Registrar of Companies (ROC)...........................................................................10 2. Third Eyesight.....................................................................................................12 3. Apparel Export Promotions Council (AEPC).....................................................15 4. National Institute of Fashion Technology (NIFT) ..............................................18 5. Northern India Textile Research Association (NITRA) .....................................21

Chapter Three: Company Profiles
1. Modelama Exports Ltd.
I. II. III. IV. V. VI. VII. VIII. IX. X. XI. Contact Information .........................................................................................24 Brief History ....................................................................................................25 Basic Profile.....................................................................................................25 Financials .........................................................................................................27 Brand Information............................................................................................28 Infrastructure....................................................................................................29 Working Conditions.........................................................................................31 Human Resource Policies ................................................................................32 Business Bottlenecks .......................................................................................35 Industry Comments..........................................................................................35 Personal Experience.........................................................................................36

2. Shahi Exports Pvt. Ltd.
I. II. III. IV. V.


Contact Information .........................................................................................37 Brief History ....................................................................................................37 Basic Profile.....................................................................................................38 Financials .........................................................................................................39 Brand Information............................................................................................40 Infrastructure....................................................................................................41 Working Conditions.........................................................................................44 Human Resource Policies ................................................................................45 Business Bottlenecks .......................................................................................48 Industry Comments..........................................................................................48 Personal Experience.........................................................................................48

3. Jyoti Apparels
I. II.


Contact Information .........................................................................................49 Brief History ....................................................................................................49 Basic Profile.....................................................................................................50 Financials .........................................................................................................51




Brand Information............................................................................................51 Infrastructure....................................................................................................52 Working Conditions.........................................................................................56 Human Resource Policies ................................................................................57 Business Bottlenecks .......................................................................................58 Industry Comments..........................................................................................59 Personal Experience.........................................................................................59

4. Company G of R Group of Companies
I. II. III. IV. V. VI. VII. VIII. IX. X. XI. Contact Information .........................................................................................60 Brief History ....................................................................................................60 Basic Profile.....................................................................................................61 Financials .........................................................................................................62 Brand Information............................................................................................62 Infrastructure....................................................................................................63 Working Conditions.........................................................................................64 Human Resource Policies ................................................................................65 Business Bottlenecks .......................................................................................66 Industry Comments..........................................................................................67 Personal Experience.........................................................................................67

5. Pearl Global Ltd.
I. II. III. IV. V. VI. VII. VIII. IX. X. XI. Contact Information .........................................................................................68 Brief History ....................................................................................................68 Basic Profile.....................................................................................................69 Financials .........................................................................................................70 Brand Information............................................................................................71 Infrastructure....................................................................................................73 Working Conditions.........................................................................................74 Human Resource Policies ................................................................................75 Business Bottlenecks .......................................................................................76 Industry Comments..........................................................................................76 Personal Experience.........................................................................................79

6. Orient Craft Ltd.
I. II. III. IV. V. VI. VII. VIII. IX. X. XI. Page Contact Information .........................................................................................80 Brief History ....................................................................................................80 Basic Profile.....................................................................................................82 Financials .........................................................................................................83 Brand Information............................................................................................83 Infrastructure....................................................................................................85 Working Conditions.........................................................................................86 Human Resource Policies ................................................................................87 Business Bottlenecks .......................................................................................89 Industry Comments..........................................................................................90 Personal Experience.........................................................................................92 2

others self-report to financial databases.) were identified using “Mapping First Tier Suppliers in Garment Industry in Delhi. Orient Crafts Ltd. Ministry of Textiles). E-mail was also used to a large extent to set up meetings. though it proved best to limit the amount of e-mail communication. Manicandan. Contact information was available on websites. linked to the Ministry of Textiles. linked to the Ministry of Textiles). Interviews were obtained in a variety of ways. and others do not disclose financial information beyond approximations of annual turnover and production capacity. 2) To identify correlations between labor conditions and businesses characteristics. Company G of Group R. Pearl Global Ltd. the Apparel Export Promotions Council (AEPC). India context. the Registrar of Companies (ROC. Online searches yielded some kind of press release or interview for each entity except for Jyoti Apparels. Methodology Preliminary research was conducted on the internet. Five companies (Modelama Exports Ltd. Obtaining the phone number from the agency website and directly calling was the simplest way of setting up interviews. Shahi Exports Pvt. and Third Eyesight (an industry consulting agency). Managers at six companies and four agencies gave interviews. Several other agencies that are major players in the export garment industry were identified and profiled by the researcher. an interview by telephone would be far more likely to be successful than an information Page 3 . display their financial information on the company website. Government of India).. These are the Northern India Textile Research Association (NITRA. The sixth company was identified by the researcher through an interview with a representative of the Indian Apparel Export Promotions Council (AEPC).” a CEC report submitted by G.. the National Institute of Fashion Technology (NIFT. while asking the same question in person would yield a response. 3) To develop corporate research strategies specific to the Delhi. It is advisable not to send questions via e-mail. Public limited companies like Pearl Global Ltd. If an interview cannot be conducted in person. Ltd..CHAPTER ONE INTRODUCTION The identification and profiling of top tier Indian garment exporters was undertaken for the following purposes: 1) To identify common Human Resource strategies used to suppress union organizing in the export garment sector. Four of the six companies profiled and all of the agencies have individual websites. A management survey was developed using the framework of surveys used in other geographic contexts and updated on the basis of preliminary interviews. Asking a question via e-mail often yielded claims of confidentiality. although some were out of date.

What groups? Manager: Oh.request by e-mail would. industrial accidents record. Just. and Orient Craft Ltd. ladies are more focused on work. The purpose of this research was to obtain information about companies from a management perspective.. An interview with an anonymous manager produced the following conversation. However. Furthermore. no telephone interviews were conducted in this survey. all interviews were in person. Researcher: I don’t understand. I’ll tell you. Researcher: Did you have problems with employing males in the past? Manager: No—no. Also. The attitude and openness of those interviewed are subjectively recorded in the individual profiles. men together tend to form groups and lobbies because they have spare time. easier to control. The agencies profiled were primarily interviewed before the export houses. The AEPC was instrumental in identifying Jyoti Apparels as a top tier supplier. or productivity schemes. but off the record. they get involved in politics—(phone call) Researcher: What were you saying about the worker groups? Manager: No—that’s not—don’t quote that. while others would refuse to state the number of workers in the manufacturing unit. no significant differences in productivity. going as far as to hand over Standard Operating Procedures. which typifies management attitude both towards women and unions: Researcher: Why are your workers mostly female? Are there significant differences in productivity? Manager: No. Women are easier to handle.S. however. Aggressiveness both in pursuing interviews (which could take several phone calls and emails before contacts could be made) and in asking questions during the e-mail was not seen as rude as it would in a U. I don’t think they ever employed males… Limitations Time constraints limited the consistency and thoroughness of company information. and used to establish industry contacts. and NIFT gave updated contact information for Shahi Exports Pvt. Questionnaire Used by the Researcher The following questionnaire was handwritten in shorthand and brought to the scheduled interviews as notes. context and was integral in order to obtain information. Managers were surprisingly open in some cases. They’re more docile. time constraints would not permit cross-checking all information with workers and officers at each company. Information on these companies was obtained primarily from top-down management sources. Ltd. It was not e-mailed to any of the managers. even though such a one-sided perspective may not reflect the reality of the situation. and one experience ePage 4 . without which interviews would not have been possible. and as such may be misleading as to actual conditions. as it was not possible in many cases to conduct follow-up visits.

if only a higher level manager could be reached. they often had information regarding each of these areas. The survey questions were divided into sections according to the position of the respondent. sourcing. Ownership of Company. Landed Cost)? different practice of brands and retail clients? How does the company get contracts with foreign vendors? How are prices negotiated with a foreign brand? Do you have design department? Where is it located? Give details. DSP questions.S.Incorporation of Company) What is the shareholding and ownership makeup of the company? What plans for expansion? Do they cater to domestic market or only export? What share of turnover/sales/production is export? Markets—who. CMT. U. no input--or more capable. vol of product. EU? Major foreign brands that the company supplies to: length of relationship.mailing questions proved fruitless in gathering information. and Responsibilities of Respondent: Number of Years in the Company: General Upper Management Do you have a brochure saying what products. total sales. deliver? Does the company ever have problems with contracts and/or steady orders? (if possible. where. I’ve heard of collegiate licensing that would provide steady orders from major brands at higher prices. package. However. specialty (GAP). Designation. The questionnaire was used only as a guide in the interviews as a reminder of what kind of information was needed. since a conversational approach proved to yield the most information. how fast company delivers products to brand Kinds of buyers—importers. etc? What products do you manufacture? How many factory locations does the company have? Size and scale? Addresses? Does it have objectives on which it was founded? Articles and Memorandum of Association (Objectives. What kind of input— CMT. as there are some questions that an HR manager would know more than a Merchandising Agent. Name.. dpt stores (Belks) What is the average price that you get per piece of garment supplied? Do you know the average retail price at the point of sale? By item? At what point of delivery do you get the price (FOB – freight on board. help design. discount retailers (Wal-Mart). get order. if such a program were introduced would be willing to participate if increase wages and committed to labor rights and worker representation?) Problems with seasonality? Manufacture winter clothes? How have vendors changed post-MFA? Have you taken price cuts? Which products? Larger volumes? Different buyers? Deepened relationship? Middlemen? Who are the company’s competitors? Are subcontractors involved and if so at what stages? Which factories/companies? What are the size and scale of these operations? Has this changed post-quota phase out? What effect does the company believe the quota phase-out will have on turnover and the industry in general? Page 5 .

supervisors. what is displayed to workers on details of employment. Quality Circle? If yes. semi skilled. washers. infrastructure How do you manage being so large? Market Related information: Is financial data/ annual reports for the past five years available? Can you give a copy of the latest annual/financial report for the company? Current figures for the company: Total sales. Grievance Committee. subcontracting. overhead. How many women. who are the members and how are cases handled? Give details. can you give a sample of the contract letter? Is there a procedure for workers to complain about supervisors/management? Are there programs or committees to minimize conflict and improve morale of workers? i. Have there been any attempts at unionization in the past? What is the company’s attitude toward unionization? Page 6 . or do they use agencies like Third Eyesight for technology and HR development? How has AEPC or NITRA or NIFT helped them? In what capacity? What are two or three main things holding business back? What are you doing to solve this? How has the central and state government helped the company’s smooth functioning? Or not? Labor laws. tailors (skilled. codes of conduct. checkers. Sexual Harassment Committee. etc.Have they used outside agencies in developing any part of their strategies? Part of AEPC. Productivity Committee. Shopfloor Committee. what do these forums do? Get any documents willing to give at any point. trainees. profit margin HR Manager What are the normal timings of work at the factory? What are the periods of break? Do you use labor contractors? Temporary employees? What benefits are different? How do you train your workers? At what level? How long does the training last? Give figures for the total number of employees and their average wages per month by category and gender. men. material cost. how long they have stayed in company Are workers in any way involved in wage negotiation or target setting? Target setting-prod planning mtgs? How many years of experience do the workers need to have in ordered to be hired at your company? What is the usual turnover of employees? How do you fill vacancies? Do you use recruiting agencies? Are all employees in the company given a letter of contract? If yes. pressmen. total value of exports. Have you seen a benefit in productivity since implementation of program? Are there joint worker-manager forums in your organization? If yes.e. cutters. unskilled). average age of employees. etc. helpers. finishers. standing orders. NITRA. labor cost.

Is there a personnel ‘code of conduct’? Is this a company policy or vendor policy? How are these communicated to workers? What employers are covered by: (i) ESI (Employee State Insurance) (ii) PF (Provident Fund) (iii) Gratuity (iv) Maternity benefits (specify) What are the details of employment that are displayed / notified to workers? (i) minimum wage (ii) ESI/PF/Gratuity? What is the average overtime payment to all employees? (i) overtime per month (ii) overtime as a percentage of total wages (iii) rate of overtime payment Ask about industrial accidents, if there is a doctor available, how often, rotate between factories, what is the most common injury, what kinds of safety equipment What is your approach in HR and Productivity/Efficiency? (Get policy document) Do you involve outside agencies in your HR strategies? Do you have common policies across your plants? What are the typical causes of punishment of employees? What are the types of punishment given? (wage cuts/extra work/asked to go home?) Is there a procedure followed for dismissal of employees? Who initiates the procedure? Is the employee given a hearing? Give details? Do you have a legal officer in the company? Do you have an Industrial Relations policy? (any written documents?) What are two or three main things holding business back? production, labor situation, training , quality control, etc. What are you doing to solve this? HR/Production Manager: Get any documents willing to give on productivity schemes, time-study worksheets, productivity numbers, structure of lines, how many supervisors, etc What is your approach in HR and Productivity/Efficiency? (Get policy document) Could you give me a sense of the floor layout of a typical factory; what kind of technology and planning has gone into the factories? What are the different departments? (Floor chart) Department # Workers # Men # Women # Machines What are parts of a Line? Is it an assembly line? How much time does an item take from the beginning to the end of a line? How many supervisors are there on the Line? Is there a productivity scheme in your company? If yes, when was it introduced? What categories of workers are covered? Are workers in any way involved in target setting? Prod planning? How much time does a worker take to achieve the desired productivity? What kinds of productivity schemes? Teams? Line supervisors? How come up with time studies? How conveyed? What have been the benefits from the productivity scheme in terms of (i) increase in productivity (ii) reductions in waste (iii) any others? Does the productivity scheme give incentives to workers? If yes, give details based on category, average incentive, and maximum incentive. How make workers more productive?



What are the typical causes of punishment of employees? What are the types of punishment given? (wage cuts/extra work/asked to go home?) Is there a procedure followed for dismissal of employees? Who initiates the procedure? Is the employee given a hearing? Give details? Has the company ever consulted industrial engineers to design the factory? What was productivity output before and after the consultation? What are the quality check points that the buyer requires? Does the company management have other quality checks? How have they used technology and state of the art equipment to improve quality? What are two or three main things holding business back? production, labor situation, training, quality control, etc. What are you doing to solve this? Types of Sources (other than management interviews) To obtain much of the initial company information, the researcher performed internet searches for the company names, and several common business periodicals showed up several times including: Apparel Resources The Economic Times The Hindu Business Line Internet Edition, Financial Daily Most of the companies profiled had company websites, except for Jyoti Apparels and Orient Craft. Once interviewed, the companies typically gave company profiles that they use for potential buyers, which contain information about the composition of the company, the types of clothing it manufactures, production capacity, turnover, and major clients. The agencies profiled, especially the AEPC and NIFT, were vital in obtaining information that would lead to interviews, identification of major players, and important industry resources. Third Eyesight has links to industry-related articles at Although the researcher was not able to research the following sources further, some were featured at an international garment fair and others are commonly used as industry resources for financials: CMAI (,, EBSCO CRIS, INFAC (intranet and internet), INSIGHT, CMIE, RMS, IAS, INDIASTAT, IRA. Information In Company Profiles Contact information includes addresses of known production sites, contact persons, website, and e-mail. Brief history includes relevant information regarding the establishment and incorporation of the company. Basic profile includes the legal composition of the company, export oriented unit information, the breakup of exports and imports of the company (100% exports for all the companies profiled in this report), the product mix, clients, and awards of the company.



Financials section includes the turnover and whatever other financial information could be obtained on the company. Brand information section includes major clients, length of relationship and percentage of turnover, direct or buying agency clients, and unit prices. Infrastructure section includes subcontracting information, the type of production system (all assembly line units), production capacity, the design/sampling department, quality control, specific departmental information, and productivity schemes. Working conditions section includes timings of work, wages, wage-setting procedures, benefits, overtime information, and labor turnover. Human Resource policies section includes management structure, worker training information, recruitment policy, dismissal procedure, union information, worker committee information, grievance policy procedure, corporate social responsibility schemes, codes of conduct, worker medical care information, and security system information. Business bottlenecks section includes whatever setbacks or problems that managers perceive as holding back business. Industry comments section includes strategy, predictions, and other relevant information regarding the growth of the company, its views on the industry as a whole, strategies for expansion, etc. Personal experience section includes miscellaneous description regarding the researcher’s views of the company and its managers and the ability to get an interview.



Website of the Ministry of Company Affairs: http://www. which are available for inspection by members of public on payment of the prescribed Nehru Stadium. Such forms include: Form 1.htm : Delhi & Haryana Regional Director: Dr.The financials publicly available include the annual return and balance (for all companies). New Delhi – 110003 E-Mail: However. Lodhi Page 10 . Form 32. Since Pearl Global is a public limited company. Form 29 for Pearl Global makes it a public limited company.CHAPTER TWO AGENCY PROFILES 1. relating to the companies registered with them. Form 18. the compliance of companies act. CGO Complex.nic. REGISTRAR OF COMPANIES (ROC) The Registrar of Companies is a division of the Indian government’s Ministry of Textiles. the office at Nehru Stadium closed down earlier in the year. the address of the registered office and the locations of the Navrang Saini Addresses: B-Block Paryavaran New Delhi 110003 Phone: 011-24362708 Fax: 011-24364570 E-Mail: rocdel.mca. The addresses of each state’s ROC as of 2003 can be found at http://dca. These offices function as registry of records. which is not true for privately owned Companies are required to register new events such as a change of directors with the ROC. in order for a company to be registered with the ROC. the profit and loss are also publicly website to access the public disclosure documents).in According to the Ministry of Company Affairs website: Registrars of Companies (ROC) appointed under Section 609 of the Companies Act covering the various States and Union: Territories are vested with the primary duty of registering companies floated in the respective states and the Union Territories and ensuring that such companies comply with statutory requirements under the Act. the details of the board of directors/management structure. they must submit several forms at incorporation and annually. Form 20 gets the Director a Director’s Identification number (the number used on the mca. The Central Government exercises administrative control over these offices through the respective Regional Directors. According to an interview with the Company Secretary of Pearl Global Ltd..

Documents are publicly available after submitting a form requesting a release of information along with a small fee for each company. photocopying the documents in the file is not permitted unless a fee for a legal copy is paid. Page 11 . and though there is no formalized rule against this. Furthermore. of a newly incorporated company detailing the scope of its operations). it was not permitted either. such as financial information and company Articles and Memorandum of Association (objectives. Not only were entire company files missing.The ROC in Delhi is in a process of transitioning to an electronic format of filekeeping. was difficult and did not yield a lot of useful information. but several did not have up-to-date financial or structural information. Information must be copied into a notebook by pencil (pens are not allowed). As such. the process of obtaining public documents. The researcher attempted to take notes by laptop. etc.

trainer and Third Eyesight's Experience Profile: (from their promotional materials) Third Eyesight was founded in late-2003 by Devangshu Dutta who has worked with retailers and manufacturers from across the world in a variety of consumer products sectors. and returned to India to his position as General Manager of the Indian business. Benchmarking against global supply chain and product development best practices.3isite.122 002 INDIA Tel: +91 (124) 4112493. During his career Devangshu has performed the roles of an entrepreneur. in marketing and distribution.2. He then joined a start-up consulting firm and was instrumental during its growth into a multinational consulting firm's joint venture in India.Assistance in development of global sourcing strategy and action plan. manager. assistance in assessment of Indian supply base Page 12 . Founder and Director of Third Eyesight A-847. including fashion. Devangshu began his career with the then-leading Indian national retail chain in buying & merchandising and in store operations. advisor. assistance in formulating strategy and developing partnerships with International retailers and brands. food & grocery. Third Eyesight's project teams consist of professionals who have hands-on experience in various aspects of retail and consumer products businesses. as part of the team that launched the JV. home.strategic inputs for Asia-Pacific top management team to identify emerging opportunities in the Indian textile supply chain * Leading UK Retailer . * One of the largest global home products retailers . new business start-up and operations projects with Indian and international clients. competitive and regulatory information. dining etc. Sushant Lok-I. 4112495 Fax: +91 (124) 2577586 Cell: +91 98111 03494 Email: devangshu. and product analysis. He subsequently worked with an international retailer's joint-venture in India. Thereafter.dutta@3isite.Carrying out sectoral market studies in retail. he co-founded a fashion sourcing company in which he remains a shareholder. 4112494.Strategic assessment of India – insights for a global senior management team to gain a realistic picture of the opportunities and the challenges in India. Third Eyesight and its team of associates & professionals have worked on a variety of business strategy. Support in implementing changes in sourcing strategy and organisation. * International multi-billion dollar apparel brand . * Diversified Indian consumer and industrial products conglomerate . health. He was also based in the European practice of this multi-national consulting firm. 2nd Floor. over the last 16 years.development of India strategy and preliminary business plan including market analysis. THIRD EYESIGHT (INDUSTRY CONSULTING AGENCY) Contact person: Website: www. The following are brief descriptions of some of the projects on which Third Eyesight's professionals have worked. Gurgaon . Devangshu Dutta. * Global fibre and chemicals company .

and the result of this was that a successful company was prevented from expansion. * Indian subsidiary of one of the largest sports apparel and footwear brands – Design. Directed researcher to online industry magazine resource (Website: apparelresources. In the early 90s. The name is on the WRC disclosure list. The government thus limited how much you could produce under the reasoning that overcapacity would lead to inefficient use of capita. Gave a brief background about salient law regulating the textile and garment industry: The tax laws are such that if you subcontract work but sell to the domestic market. and assistance in seeking new capital infusion. reserves certain sectors for small units. The investment cap was very low. who could then direct me to industry management: Dr.Assistance in formulating strategy and developing business with global customers for exports. labor laws also limited the ability of companies to expand. Since the garment industry is extremely labor intensive. development and delivery of sales & marketing collateral for three consecutive seasons. The other reasons for company fragmentation are the nature of quota system and labor Advised researcher to contact faculty of the management studies department. Much of the fragmentation of companies was really only on paper. it was a licensed economy in which you needed to get government clearance to manufacture in specific capacities. Sibichan Matthew. which continues to regulate knit-fabrics.K. * One of the largest Indian textile and garment companies . Mentioned another apparent Tier 1 (said they are large and source directly to MNCs). Pradeep Joshi.Business planning for new brand acquisition. Content of Interview (5 July 2006) with Director of Third Eyesight: Asked about study. * Pioneer luxury brand house in India . Business strategy and plan for current business. Matrix. Mr. as you needed approval from the state government if you were operating a place of business with more than a hundred workers. Page 13 . This is partially why many of the current successful companies (such as Richa Global) are split up into many different companies.* Multi-billion dollar Indian consumer goods conglomerate . this model was phased out. and you cannot have large units. Initially. Batra. Mr. Also told the researcher to contact faculty of Pearl Academy of Fashion. D. you need a separate registration and thus it is easier to simply export (used to be tax-free). gave contact information for the National Institute of Fashion Technology in Hauz-Khas.Formulating strategy and assistance in strategic alliance proposal to key European customer. Gave history of market structure in India. The quota system obliged companies to set up under different names. (Website: niftindia. The small-scale reservation system. who would be able to help schedule company interviews.Comprehensive comparative study of 7 cities in India and outside to choose location of new garment manufacturing plant * Leading Turkish supplier . According to

for example. he said.S. However. From 2001-2004. but more menswear). He expressed hope that soon the labor laws would relax some to reflect changing needs of business. but in the strategic long-run. effort. and money (wastes that would not be eliminated by greater cooperation. Bangalore (roughly equal. the MNC may like it or require additional changes. investment in the industry slowed down. The MNC gives product specs. material. He began to talk about sourcing. then privatized factories. and that Chennai (mostly menswear). and Tirupur (mostly jersey knits) all have different cultures. but would be greatly minimized). He said that Delhi is doing extremely well in terms of business and is the largest in terms of exports. how the current transactional model is very inefficient insofar as buyer-supplier cooperation goes. since vendors and suppliers both may have had bad business experiences when attempting to do the same. whereby long-term relationships are cultivated. the quotas had restrained India far more than China (showed a graph from a U. as the companies began to listen to the needs of buyers and in 2005. and as such is seen as a big risk and many are reluctant to actually work on establishing these relationships. that they were too “over-exposed in China. money is instead wasted on an inefficient process. He then mentioned that “strategic sourcing” would be much more beneficial to the market.” however that had mostly been talk and no action. this changed somewhat. but that the outlook of the management may be more pessimistic than Tirupur. worrying that Indian business could not compete with China. saying that the industry had often talked of diversifying. He mentioned that Delhi (mostly womenswear) is only one side of the big picture. the investment returned. and rather than cultivate a relationship in which the supplier provides input and designs according to a long-standing relationship. the product is re-done. He stated that “the inconvenience of a labor inspector” pestering and harassing company management was a minor price to pay for business expansion. He began to describe the different ways of sourcing. so all the businesses had to pay was labor and overhead.. the supplier makes the product. economic source. ships a sample. The current model has self-contained worlds instead of cooperation.” Furthermore. In 2004. etc. as it was clear that Indian businesses were gaining from the phase-out and smaller countries like Bangladesh were losing hundred workers is nothing. couldn’t see name). Although he expressed the belief that a market economy cannot compete with a controlled economy like China in that the Chinese government built factories and infrastructure. Because of this. doesn’t communicate with the designer. gets quotes from suppliers. strategic sourcing is dramatically different from the current widespread transaction model. Page 14 . total costs would go down because the current transactional model wastes a lot of time. which has worse infrastructure but is nevertheless optimistic about business. he made it clear that somehow they were competing because of their “ability to develop and deliver product. it would increase unit prices. From a piecemeal view. he said that Indian companies were extremely uncertain about the effects of the MFA phase-out. wherein the buyer.

Clothing Mfrs. Ramadorai (Chief Executive. of India. Institutional Area.. Clothing Mfrs. particularly to undertake market research. Clothing Mfrs.F. New Delhi) President. Ltd. New Delhi took a lead in this matter and formed a special ad-hoc committee of the following Members: Mr. to send trade delegations and missions to foreign countries as well as to survey export potential of readymade garments from the country. woollen knitwear and garments of leather. excluding. Singh (M/s Singh Export Corporation. quota distribution and allocation. Bombay and Garments Exporters Association..3. Banthia (M/s Magnum Enterprises. New Delhi) Ex-president.. M/s Handloom and Handicrafts Export Corporation. develop export of all types of readymade garments. Bombay) Hon. (4) To conduct propaganda and publicity regularly and continuously so as to bring to the notice of the importers and the public in foreign countries the advantages of trade and commerce with India and to create a liking for the various types of garments markets Page 15 . of India. Mr. to develop new designs and patterns of garments. Two leading organisations of readymade garments. Mr. N. market preferences and latest fashions and designs prevalent in the foreign countries. Bombay) Vice-President.L. Gurgaon 122003 Contact Person: Mr. Calcutta). S. Mr. Assn. The main objectives of the AEPC are as follows: (1) To promote. APPAREL EXPORT PROMOTIONS COUNCIL (AEPC) Office: Apparel House. Secretary. Assn. Mogrelia (M/s Zoro Garments Pvt. Sector 44. New Delhi). to undertake marketing in individual foreign markets. Assan. Mr.K. but now as the garment industry has reached a stature and maturity and has achieved the target of 250 crores. jute and hemp. Ltd. Mr. Bombay) President. P. Madras). Vijay Mehta (M/s Intercraft Pvt. (2) To undertake all export promotion measures. N. agents or correspondents in foreign markets for the purpose of continuously and regularly reporting the markets prices. advance. Garment Exporters Association. Secretary General of AEPC Mobile: 98-9912-4555 Website: http://www. Premila Wagle (M/s Paville Fashions Pvt. to find out the product range and export prices of garments of other countries. increase.P. (3) To appoint representative. Amersey (M/s Milton’s Ltd. Mr. Smt. B. Clothing Manufacturers Association of India. KK The AEPC was originally incorporated in 1978 as the Apparels Export Promotion Council and re-incorporated in 1984 as the Apparel Export Promotion Council. According to the Articles and Memorandum of Association: Up till now Cotton Textiles Export Promotion Council was handling the export promotion work of garments. Garments Exporters Association. Shah (M/s Hiralal Gulabchand.aepcindia. Ltd.. of India. B.N. to find out the tariff and other restrictive practices of importing countries. Gen. the leaders of the garment industry thought that it would be in the best interests of the garment industry to have a separate export promotion council.

address. and its specialization in better embroidery and the “India look” (ethnicwear heavy with embellishments and more complex work). import licence facilities provided and how to apply for the facilities. otherwise productivity will remain stagnant and labor costs will remain high. The complete list of the AEPC’s objectives can be found on the company’s website in the Articles and Memorandum of Association (link from main page). (8) To obtain from members of the Council and to prepare for the Council as a whole. specializing in knitwear. • lobbying to government to change laws regarding labor and infrastructure (and whatever other business bottlenecks there are). NCR region. to evolve improved design and patterns and garments suitable for export. especially. unit prices have remained stable pre and post quota phase-out. development of export markets. Page 16 . to improve the skill of workers engaged in garment manufacturing in India and to assist in the technological base of the garment industry. A specific AEPC goal is to get the government to change the law that states that workers are permanent employees after 100 days. setting of export targets generally and in relation to specific countries and commodities on an annual basis and for such medium and longer terms as may be considered desirable and to ensure/undertake execution of such plans. to 200 days. its strengths being higher levels of worker productivity. He stated that the government needs to increase labor flexibility. and description of subscribers. Content of interview (7 July 2006) with the Secretary General of the AEPC: The main issues in the garment industry are labor and infrastructure. its strengths being better infrastructure. He said the three biggest centers for garment production were • firstly Delhi. and lastly Tirupur. AEPC focuses on three things: • marketing help. • help with training and productivity (14 training institutes). he stated. (6) To establish design centres. to encourage export production of quality garments and to undertake necessary research in fashions. as well as the names. (5) To assist members. garment businesses do not have orders. (7) To undertake training of workers and technical personnel. action plans for promotion of exports. traders and exporters of garments. rules and procedures. For three months of the year.for the purpose of continuously and regularly reporting to manufacturers. He stated that over the industry as a whole. so that businesses who do not get orders during the winter are not hurt by the cost of labor. and • raw material supply (both indigenous and imported). so that workers can be more easily fired and hired. in the Small Scale Sector by giving assistance in the matter of understanding and implementation of the drawback. designs and techniques and to encourage manufacture of garments for exports. to improve the qualities and standards of the fabrics and garments by importing technical know how. • secondly Bangalore. generation of production for exports.

• SPL Industries (Delhi). • Golkadas Exports (Bangalore). • Richa Global (Delhi). including • an HR training institute-KSA Technopack.He listed the top ten Indian garment factories as • Shahi Exports (Delhi). • Gurgi (“biggest industry consultant”—saw this name in the fabric stores in Jyoti Apparels). and • the Cotton Textile Export Promotion Council. and • the Eastmen Group (Tirupur). • Modelama (Delhi). • Centwin Group (Tirupur). These businesses have succeeded through a number of different strategies. • a foreign consultant agency Method Workshop (main consultant Roger Thomas). as it is self-reported. with a common thread of individual attention to quality control and productivity by hiring consultants and building better facilities. • Texports (Mumbai). He mentioned several notable resources. • Golkadas Images (Bangalore). The AEPC did not have company specific financial data. Page 17 . The researcher purchased the newest book of statistics on industry level data that the AEPC had (2003) and a directory of garment exporters. • Creative Group (Mumbai).

New Delhi-110 016. and entry-level candidates in the form of Continued Education Programmes. These programmes reflect the requirements and Page 18 . Chairperson. enhancement of critical abilities. Extn:306 Contact Person: Professor Rajesh Bheda. 26964771. 26965080. Hauz Khas Near Gulmohar Park. The centres are professionally managed platforms of the world’s finest design expertise. creativity. 26964771. Government of India Website: http://www. Hyderabad. management and technology across the globe. Chennai. (Gauri Kumar. rajeshbheda@niftindia. and the evolution of new professionals. Kolkata and Mumbai. India Telephone: 26850484.4. They offer a learning environment that encourages innovation. Gandhinagar (Sub-Centre: Surat). and diverse faculty expertise. Department of Fashion Technology Telephone: 26850484. also offers short duration part time courses under Continuing Education (CE). NATIONAL INSTITUTE OF FASHION TECHNOLOGY (NIFT) Ministry of NIFT was set up under the Ministry of Textiles in 1986. Continuing Education (CE) Programmes: National Institute of Fashion Technology. NIFT has set academic standards and excelled in thought leadership by providing a pool of creative genius and technical competence to the fashion industry nationally as well as globally. management practices and manufacturing technologies. PhD. which have been developed in consultation with reputed academicians [sic] and industry practitioners. practitioners. 26965059. leading to upgradation of skills and professionals. Director General of NIFT) The Institute: Today. Resource Centres. Bangalore. Each of the seven NIFT Centers offers a spectrum of specialized short-term courses that address the dynamics and niche needs of the fashion industry and open windows of opportunity to interested candidates. 26965059.. advancement of careers. The thrust of CE Programmes is on integrating theory and practicals with industry best practices and reciprocal professional interaction in a consolidated time-bound format. NIFT has crafted a range of Continuing Education Programmes. and avail of facilities like laboratories with state-of-the-art equipment. NIFT is acknowledged as the premier institute of fashion design. 26965080. In addition to classroom learning. and excellence.htm Address: NIFT Management and Technology. Extn:306 Fax: 91-11-26851198 Mobile: 9810154829 E-mail: rajeshbheda@gmail. these courses offer a unique opportunity to participate in the lively academic environment of NIFT. besides conducting regular professional undergraduate and postgraduate programmes in Design. The Institute has pioneered the evolution of fashion business education across the country through a network of seven centres at New Delhi. According to its CE (Continuing Education) Prospectus 2006-07: NIFT provides quality fashion-education to industry experts.

buyers reducing number of suppliers as well as brands. methods monitored. With focus on interactive learning. Post-MFA trends have been a consolidation of supply chain and capacities. probably average 70% of India’s market. cost is up. demand is up. The main characteristics of successful firms include: • recognizing what customers are looking for. relevant to individuals at different stages of their careers. there could be a 50% improvement in quality. The CE Certificate Programmes are aimed at complementing the practical knowledge of the industry professionals with formal technical education in their respective areas of work. • have more highly trained workforce. as there has not much shift in markets. Unit prices are down. • design development. The flexible schedule enables the participants to pursue the programme without interrupting their professional activities. the programmes provide a congenial environment that integrates theory with practice. • offering shorter lead times. corporate social responsibility. and they are making efforts to reach good productivity. though you cannot take bags inside the doors or check out books. productivity (how to perform time studies). with production planning and scheduling. Content of interview (20 July 2006) with Professor Bheda: Professor Bheda has been with NIFT for 16 years. • higher productivity • use the help of consultants. trying to get workers’ involvement. If companies put efforts into enacting these measures. Most common is line supervision. The participants receive a NIFT certificate on successful completion of the programme. manufacturers consolidating capacities. • better quality product and service. performance-based rewards system. quality improvement program. and also to those aspiring to join the industry.S. • managing their supply chain better. He teaches classes in quality management. suppliers reducing subcontracting. it is a useful resource in identifying the types of materials used in classes and to train managers and HR personnel—one book on HR management that the researcher later purchased had a lengthy passage on labor unions and how to use HR strategies to discourage their formation. training managers. U. operators. The average Indian garment factory has 100% potential in physical labor productivity. and a global overview of the garment industry. The library at the NIFT campus is open to anyone. Companies are trying to move up the value ladder as product development and design are becoming more important. and • hire or train industrial engineers. and EU have always been strong markets in India.concerns of the industry and have been carefully planned to spur professional growth. Page 19 . However. • BPR manufacturing.

“suppliers get a feeling of being cheated.L. driven by price and the customer can walk away at any point.K. The researcher obtained a buyer ID and toured the grounds. The day of the interview was the final day of the Indian International Garment Fair (IIGF: www.K. He gave a contact person to interview from Shahi Exports and up-to-date contact information number for Orient Craft. the 37th annual garment fair with 393 exporters/exhibitors at Pragati Maidan. it would have to be meticulously and carefully implemented. Jalan. it would be good to invest in social improvement program. Agarwal). He does not see a correlation between turnover and CSR programs: “ultimately it comes from within. so some firms are investing in CSR to the extent they can afford.there is an erosion of the bottom line and companies find it difficult to survive and improve working conditions. it seemed to be a showcase for smaller firms to vie for new buyers and international exposure. Magu (Chairman of Jyoti Apparels).com. something like it has been discussed. Page 20 . The core group of organizers include Vijay Mathur. 38th annual: www. not because the buyer says the firm has to do it. Everything in the market is transaction-based. However. Retailers should start partnering with the brands and rewarding CSR compliant suppliers. The award winners for their showcases (announced the previous day. from principles. Mumbai). Regarding corporate social responsibility. Social programs are a long-term investment. Vijay Agarwal (Chairman of AEPC.” The researcher mentioned the United Students Against Sweatshops-proposed Designated Suppliers program and if suppliers would be interested in such a proposal and he said absolutely. the AEPC Director of Export Promotions (interviewed him after K. H.K. so suppliers feel they are not committed. None of the firms were top ten exporters or easily recognizable.indiaapparelfair. and as long as it is ensured that the rewards system cost comes down to the factory 2) Shilpayan Craft (Jaipur) 3) Another firm from Jaipur. and many cannot afford them because there is typically no financial payback.indianapparelfair. and are simply passing it on to the suppliers.” that retailers are paying lip service to CSR without sharing the cost burden. so the researcher asked IIGF workers) were 1) Intercraft (New Delhi). K.

P. *Customized consultancy packages for national and international clients in the areas of Product Development. and Seminars/ Conferences/ Training programs…NITRA has carved a niche and occupied leadership in Package Design Consultancy for effluent treatment and water recovery. seminars. garment. V. *Quality Evaluation of textiles. It is the only ISO 9001:2000 accredited textile research organization in India. Environmental Audit. Cost Reduction. dyes. conferences and publications. Pollution Control. workshops. effluents. environment and allied areas. *Need based cost effective software development. Manpower Planning. *Collection and dissemination of data useful to the textile & garment industry. It is linked to the Ministry of Textiles and is recognized by the Department of Scientific and Industrial Research (both government entities). The Environment division has successfully executed 74 industrial projects with effluent handling capacity of 100 m3/day to 2000m3/day…Environmental division has 40 publications in environment field…The division has organized several seminars/workshops during the last one decade in the following areas for the benefit of Page 21 . Energy Conservation. NITRA’s Experience in Environment Field: NITRA’s Environmental Division has made headway…[in] solving the industrial problems related to environment through R & D based Consultancy. Techno-economic Viability Study. Machine Design & Development.5. waters. Rao. Energy Audit. ISO-9000 Quality Management System. leather.S. Design of Effluent Treatment Plants and Water Recovery Plants. Maintenance Audit and a lot more. *Research and Development projects and industry specific surveys related to textile & garment industry. Ghaziabad (UP) 201 002 Website: http://nitratextile. Maintenance Management. Raj Nagar. According to NITRA’s 2006 Prospectus: NITRA’s Multifarious Activities *Job oriented professional courses (full-time and distance learning) in textile. Quality Improvement. Process House Study. Sector-23. Chairman of NITRA. and plastics. *HRD activities through training programs. Product Diversification. NORTHERN INDIA TEXTILE RESEARCH ASSOCIATION (NITRA) NITRA. Several prestigious textile units and multinationals are already within its consultancy network. Publications. 0120 278-3638 NITRA was established jointly by the industry and the Indian government (Ministry of Textiles) in 1975 with the objective “to carry out scientific research in the field of textile as well as to promote and foster scientific research studies for the extension of knowledge related to or connected with textile industry” (NITRA’s website).org/ Contact person: Dr. J. chemicals. ISO-14000 Environment Management System.

fear of China post-quota. During the 60s-80s. NITRA helps factories with product development and various audits.. effluent treatment and water recovery plant. He allowed that workers were being exploited. energy. has been installed for carrying out treatability studies of biodegradation of industrial effluents through aerobic cum anaerobic route. TAF). An in-house miniature ETP (effluent treatment plant) of 100 Liters/hour capacity has been installed by NITRA.. The government is currently working on better infrastructure. The Committee also guides NITRA to conduct research and provide consultancy to the industry in the areas which are more relevant in the present context. improve infrastructure. and perhaps have relaxed labor laws within these sites. etc. The library also subscribes to 150 [national and international] periodicals. etc. better access to a supply of power through a cluster system called Scheme for an Integrated Textile Park (SITP). mid term strategies and policies and creating necessary infrastructure.000 books and journals. He believes the government should subsidize capital for Indian business like China (mentioned something about a Technology Aggregation Fund. Stated that the fragmentation of the business made quality control an issue. and the Haryana State Pollution Control Board (HSPCB). from composite textile mills in the 50s-60s to the rise of small scale businesses/ fragmentation. the…library [keeps students connected with] ongoing global developments. NITRA has a wide database of employers [in its placement cell. which are essential to conduct such a program…[it] is accredited/ recognized by the National Accreditation Board for Testing and Calibration Laboratories (NABL). the Bureau of Indian Standards (BIS). Access to and the price of power seemed to be a big issue for him. Complained about government infrastructure and labor laws. quality. but would not elaborate and would only refer to the intractability of trade unions in vague terms. to build the careers of its students and] monitors the current trends and requirements in the job market [by keeping in constant touch with prospective recruiters]. According to NITRA’s website: The Research Advisory Committee is an apex policy making committee of NITRA to guide it in its research activities and formulating short term. Content of interview (7 July 2006) with Chairman of NITRA: Gave background on the history of the textile industry. [NITRA’s IT Center] has over 100 [PC’s]. which would consolidate factories. Netherlands. especially the law whereby a worker that is employed for 100 days is considered a permanent employee. There is a shortage of skilled garment workers.. especially Page 22 . environmental statement…NITRA’s Environment Laboratory is well equipped with Sophisticated Analytical instruments.textile and allied industries: waste management. Also stated that it cost businesses more to subcontract because they had to pay for delivery. eco-friendly textiles. he said that unions hurt business. legal compliance. A programmable ADI Bioreactor System of 3 liters capacity from Applikon Dependable Instruments.. Library: Enriched with 5. water.

The researcher obtained a copy of the 2006 prospectus. not garment manufacturers). They typically have 4-5 students applying for one seat. NITRA’s worker training program’s classes (this year beginning in August) cover mostly productivity issues for middle management such as production managers and line supervisors. he mentioned Vardhmal. 10:30 am . Arvind. Page 23 .machine operators at the shop floor level. Students apply to the program online and are selected on the results of aptitude examinations and interviews. Reliance. so NITRA conducts training programs for workers that last 3-6 months. When asked for company names. The course coordinator is Vivek Agarwal. Classes are full days. a NITRA Senior Scientific Officer. L and J (seem to be mills.4:30 pm. Bilwara. They conduct in-plant training as well as distance learning programs for middle management at NITRA itself.

phase -1 New Delhi -110020. India Tel: 91-124-2290993. I. and updated telephone numbers from interview. CONTACT INFORMATION1 Contact Person Lovleen Kumar. Director E-mail: lovleen@modelamaexports. Haryana.modelamaexports. Mobile: 9810015693 Corporate Office2 Plot No. the company website. 2291131 Fax: 91-124-2290864 Website: www. MODELAMA EXPORTS LTD. and G. India Tel: +91-11-26810103 fax: +91-11-26817969 Head Office Gurgaon E-mail: info@modelamaexport. documents given by the HR and production managers including a company profile. business articles. An ISO 9001:2000 certified company The information in the following company report was obtained from interviews with the Director. India Tel: +91-124-2397838-42 fax: +91-124-2397843 1 Initial information obtained from company website. Human Resources manager. Merchandising Agent. Manicandan’s CEC Report. ICRIER financial data. 2 Unit visited by the researcher. 7 & 8. Manesar IMT Gurgaon -122016. Head Office Delhi B-57.CHAPTER THREE COMPANY PROFILES 1. Okhla Industrial Area. Page 24 . Udyog Vihar Phase -1 Gurgaon.

Okhla Industrial Area. IMT Manesar. Sector-5. “Build Quality Rather Than Check The Quality. 45 lakhs with 50 indigenous sewing machines and a workspace of 4. B-57. Phase 1 Gurgaon 4. <http://apparelresources. B-80. and Pandey. 7 & 8. Manesar. In 1999.000 square feet. Lalit Gulati as a family-run operation. In the first year they exported 5 From website.asp?msg=2710&cod=newsindetail&nam=>.5 III. interview. BRIEF HISTORY Modelama was founded in 1979 by Mr. Phase 1 Gurgaon 3. Okhla Industrial Area. 6 From company website. 4 3 Page 25 . Phase 1 Gurgaon 2. 200. owner is Mr. Other production sites in untranslated Hindi document. Sector-4 Gurgaon 5. Plot No-5. 184.00. B-33. phase -1 New Delhi 7. Modelama professionalized its management structure and has been consistently upgrading technology in their production facilities. B-26. Udyog Vihar Phase -1 II. phase -1 10. Okhla Industrial Area. Okhla Industrial Area. Gurgaon1 6. 201. Lalit Gulati. Modelama today has ten professionally run production units over 4. BASIC PROFILE6 Legal Composition Sole proprietorship. 204. phase -1 New Delhi 8. phase -1 New Delhi 9.Road Map 3 Production Units4 1. Modelama places a great emphasis on technology as the secret to its success. Vinita.000 square feet. Plot No. From company website.” Apparel Resources.

1993. Modelama does not manufacture for the domestic market. 4-530/2001-100% EOU/103 dt 14/09/2001 and also registered with the Apparel Export Promotion Council since 03/05/2001 (Registration No. Colt’s Europe: Etam. Westelm. skirts. polyamide). Dayton Hudson Corporation. knitwear and garments of leather. Zellers Australia: Country Road Awards Target Vendor Award of Excellence. cushion covers. Saks. Mervyns. Product Mix Areas of specialization include outerwear. Old Navy). synthetics (viscose. is an export oriented unit registered with NEPZ. shorts. La Halle. drapery. Villersey & Boch. Sears Roebuck & Co. Marshalls. Clients USA: GAP (Banana Republic. trousers. 1998. Grattan. which may have contributed to minimizing seasonality issues. silk. Canada: Eatons. 1996 Charming Shoppes Inc. 1999. Launched Home Textile Collection in 1999. Zara. etc. Marmaxx. Modafil UK: Laura Ashley. Monoprix. and home furnishings. Added outerwear to their product mix in 2001-2002. Charming Shoppe Inc. Lands End. offering products such as table linen... GUS.4530/2001-100% E.O. kidswear. Target Stores. William-E-Sonoma. 2000. Proffitts. Incorporates ethnic Indian accents and embroidery into design samples. polyester. Lane Bryant. Exports/Imports 100% exports. nightwear. wool). Next. 2000 Page 26 . 2000. ladies blouses. top of beds. Galeries Lafeyette. dresses. and 2002 Associated Merchandising Corporation Outstanding Performance. linen. LOP NO.EOU Information Modelama Exports Ltd. A & F. Uses natural fabrics (cotton. Sears Roebuck & Co. Hudson Bay. Chambers. 2001 Federated Merchandising Group Five Star Award (in Development of Federated Department Stores Private Brands and Labels). Tommy Hilfiger. AMC. Freemans. Federated Stores (Macy’s). Nov. Sales Growth and Profitability Vendor Award. Eurofiel (Women’s Secret). 1999. and decorative items for loungewear like throws. jute and hemp. Marks & Spencer. and blends. H&M. Pottery Barn.. silk. 1992.AEPC/REG/MER/47569/N/2001) as a manufacturer/ exporter of readymade garments including woolen.U I/6921dt28/08/01 RCMC NO. Kohls-Belk.

000 30% Rs.5 2 3 5 30 Other Financials7 2003 2004 Total Sales 180 crores 180 cr % of output exported 100% 100% Profits 15% 15% Capital employed 2.5cr. of pieces exported to the US No. of pieces exported to EU countries Proportion of workforce that is female Average wage for female production workers Average wage for male production workers 2005 200 cr 100% 20% 3cr. 500 500 450 60% 40% 150. Rs. 500 Total employment 500 500 Production workers 450 450 Proportion exported directly --Proportion exported indirectly through intermediaries Misc. 3cr. VA per employee Rs. No. 500 Rs. 2800/per month. 3000/per month Rs. FINANCIALS Turnover 70 Turnover (millions USD) 60 60 50 40 30 20 10 0 1981 1985 1990 1995 2000 2002 2005 projected 15 0.IV.000 per year 25. 7 ICRIER Data (based on an interview at B-57 Okhla Industrial Area plant in Fall 2005) Page 27 .

60% of that is Target’s profit margin per unit (PMU). 9 8 Page 28 . Europe Others 94% Major Clients Brand Federated Stores (Macy’s) Target Stores GAP (incl. Modelama Chairman. Brands Casual wear $10-16 USD European Brands High Fashion Retail Markup 4 to 7 times 4 to 7 times Type10 Mostly FOB Mostly FOB From interviews with the Director and Senior Merchandising Agent. ~$2.A.99 is the landed cost. which includes not only the factory unit price but the duty cost (AMC and freight). “Build Quality Rather Than Check The Quality. An example given was if the retail price of a given garment manufactured for Target is $9. Vinita.75 goes to Modelama. Average Unit Prices (per piece of garment supplied) Unit Price Origin Product Mix $5-7 USD U.V. 10 Nearly all brands are FOB with the exception of discount retailers like Target Stores (USA). Although they get large production volumes from discount” Lalit Gulati.S.S.asp?msg=2710&cod=newsin detail&nam=>. Of that remaining $3. The remaining $3.99.” Apparel Resources.99. BRAND INFORMATION8 Modelama's Export Market 1% 5% U. BR and ON) 9 Tommy Hilfiger Marks & Spencer A&F Colt’s Saks Etam Zara Marks & Spencer H&M Origin USA USA USA USA USA USA USA USA Europe Europe Europe Europe Length of Relationship Since 1975 Since 1975 10 years plus 10 years plus 10 years plus 10 years plus 10 years plus 10 years plus 5-6 years 5-6 years 5-6 years 5-6 years % of Sales 30-40 15 10 ---------- Buying Agency or Direct Most contracts are negotiated through buying agencies. <http://apparelresources. “GAP is sourcing worth about $1 billion from India and we are doing more than $10 million with them. quoted in 9 Pandey. the unit prices are markedly lower than specialty stores.

Vishnu.13 Gayatri Prices Since MFA Phase-out Unit prices have gone down an estimated 7-10% due to increased global competition. V. 13 From interview with Director and Senior Merchandising Officer. Some of the orders can be pretty huge . Then there is some back and forth communication between Modelama and the MNC to reach an agreement in terms of product Modelama will present their company profile to the buying agencies of MNCs. Production Capacity12 9 8 7 6 5 4 3 2 1 0 Number of Garments Produced (milions) 8 4 2.ittimes. is one of the principal designers.11 Production System Uses an assembly line system. The day the researcher observed the process.. We then sit down with the stores. and get down to manufacturing.” <http://www.) as well as home furnishing products.”14 11 12 According to interview with the Director.000 pieces. and delivery times. subtract a bit. for instance. “Indian Fashion Firms Adopt Global Pret and Couture.1 1981 0. an alumnus of the National Institute of Fashion Technology (NIFT).7 1 1990 1995 2000 2002 2005 projected Design/Sampling Modelama has a fairly large design department. Page 29 .asp?em=M&mcode=200602&idx=1083>. add a bit. which varies according to the product. Typically. they were manufacturing garment orders for Charming Shoppes Inc. From company website and brochure. “My team of designers scans international trends and comes up with a tentative collection of not only designs but also shades.80.5 0. volume. INFRASTRUCTURE Subcontracting Modelama does not appear to subcontract. 14 Makhijani.4 1985 0. who will then contact them with a development package if their profile fits their needs. Marks and Spencer (Style and Co. fine-tune the patterns.

PH check. input. Pneumatic Button Hemming Stations. Tests include tensile strength. Air Flotation Tables. Site visited by the researcher employs about 1100 workers (including about 15 accounts staff). The floor is laid out in dozens of assembly lines. Differential Feed Machines Needle Feed Machine. Auto Dart Making Stations. Procedures are based on aql 4 point system by which all fabrics are screened and categorized. Auto Cutter (Lectra). GSM check. and brushing machines (from light softener washes to heavy enzymatic washes).” Modelama emphasizes technology and internationally acclaimed systems to maintain a high level of quality. supervisor name. 17 Information on machinery was primarily taken from the company website. and number of workers. Washing (24 workers) and Finishing/ Pressing (175 workers) The finishing area had lines of workers pressing and folding clothes. Page 30 . Blind Hemmers. Autocad (Lectra). perc based dry cleaning machines. The company deploys over 3000 imported sewing machines with customized workstations. color fastness to light. Machinery includes Auto Zig Machine. Multifusing with Three Track of Loading (High Performance Macpee). laundering and crocking. From interview with Director and Human Resources Manager. pitting test. The product was women’s fashion blazers for Style and Co. Washing machinery includes a wet and dry processing unit comprised of micro processor controlled washer extractors. over 90% male. sand blasting. Auto Pocket Welting M/C.000 workers in all plants. Approximate number of workers16 Modelama employs a total of ~6. Programmable Sleeve Setter Stations. An example line was sewing collar parts with a total of 46 tailors and 5 helpers. In the sewing departments. Machinery includes Auto Spreaders. Auto Belt Attaching Stations. they use internationally standardized procedures like the traffic light quality assurance system. Information on workers and floor layout is specific to the unit visited and is taken from an interview with the HR Manager.Quality Control15 Modelama’s motto is “build quality rather than check quality. Band Knife M/Cs. Modelama has an in-house laboratory that is equipped with testing machines for AATC Standards and has developed in-house grading systems based on ERP. Cutting (50-55 workers) The cutting department had five lines of machines laid out with worker stations. tearing strength. Auto Surging Machine. at the front of which is displayed an “Hourly Production” dry-erase board with the line number. etc. output. Top. Differential and Bottom Cylindrical Bed Unison Feed Machine. This was the only department with women. 15 16 From company website. Departments17 Production (~800 Workers) There are about 560 tailors.

Additional Machinery Factory has a special conveyor system that moves products from assembly lines to other departments. The production manager gave the researcher a copy of a time-study conducted for Charming Shoppes. Category Tailors +skilled 18 Average Wage (Rs. If workers cannot reach their targets. VII. Productivity Schemes Company has production planning meetings consisting of the HR Manager. dummy presses. the HR manager said that no incentives are given. However. No workers are involved in these meetings. He talked vaguely about “helping” the worker to reach their targets or perhaps moving them to another department for which they would be better suited.Pressing and finishing machinery include multipresses. Production Manager. Veit. indicating that he would like to develop such a system in the future./month) 3500 From interview with HR Manager. Embroidery Did not observe embroidery process during visit. Because the factory is not near a city. The Director said that workers are given incentives in productivity schemes if they reach their targets. WORKING CONDITIONS18 From 9:30 1:00 1:15 to 6:00 1:30 (washing) 1:45 (production) Work timings Timings for Lunch break (in shifts by dept) Wages Average wages Rs. Machinery includes 20m length Schiffley Embroidery (Lasser & Saurer). and unskilled minimum wage was Rs. Page 31 . and line supervisors who perform time studies on particular styles and set worker targets. HR Manager boasted that Modelama was the only factory in India to have this machine. The targets are communicated to workers by line supervisors and dry-erase boards on the production floor that display productivity goals. Inc style. 200 single head and 6 multiple head computer embroidery machines. and Renzacci. Trevil. 3000 per month. Has hand and machine embroidery capabilities. calendaring machines and range of buck shapes and steam irons from manufacturers like MACPII. flatbeds. stressing how much state-of-the-art machinery has contributed to the quality and productivity of the manufacturing process. management states that they set wages higher than minimum wage to get workers to commute. the HR manager stated that no punitive measures are taken as it is prohibited by law. 2448 per month.

like China. and that workers receive double wages for overtime hours. “It should be time-and-a-half.+semi-skilled +unskilled Cutters +machine operators +unskilled Washers +sandblasting operators +other machine operators Finishing +pressers +skilled final checkers +semi-skilled checkers +general unskilled checkers Supervisors/Mid Mgmt +skilled (3+ yrs experience) +assistant (1-2 yrs experience) 3000-3300 2710 3000 2500-2800 4000 5000 3000 3500 3200 2700 7000-11000 6000 Wage Setting For shop floor workers. including ESI and PF. HR Manager stated that wages increase after a year. Expressed dissatisfaction with labor laws requiring double overtime. Overtime Management indicated no more than four hours per week per worker.” Labor Turnover Estimated worker turnover per month at 7-10%. which is not subject to negotiation. After a three-day period. Benefits HR Manager indicated that workers receive the social benefits required by law. workers are then offered a monthly wage based on this evaluation. except for worker recruitment for middle management positions. 19 Information based on interview with HR Manager and documents given by HR Manager and production manager. Indicated that there are a few shop floor employees who have remained the two years the factory has been in operation. VIII. HUMAN RESOURCE POLICIES19 There does not appear to be common policies across the plants. stating. supervisors conduct time studies evaluating the skill level and productivity of a new hire. Page 32 .

Manicandan’s “Mapping First Tier Suppliers in Garment Industry in Delhi. and vendor codes’ of conduct. Anil Chauhan HR Manager Management Staff/Accounts Personne Mr. the company posts signs on the gate. To recruit shop floor employees. such as the unit located at 200. Recruitment Policy They do not use labor contractors at the unit visited. and in nearby worker villages. Page 33 . while dotted-line boxed positions are factory-specific and subject to variance. grievance procedures. Shiv Singh Skilled Production Line Supervisor Assistant Supervisor (Less skill/experience) Skilled Tailors/Machine Operators Helpers (Unskilled) Boxes with straight-line borders are positions common throughout all production sites. Lalit Gulati Sole Proprietor Founder/Chairman Mr. Modelama’s anti-harassment policy. workers have a brief orientation session during which they are informed of security measures. K. Worker Training This site does not provide training to its workers. However. at bus stops. Kiran Production Manager Mr. the company recruits from training centers and placement companies and has a formalized policy that the researcher obtained. Phase-I Gurgaon. For middle management positions.” Modelama uses labor contractors for some of its other units. Lovleen Kumar Director Ms. according to G. Workers are a mix of local villagers and from Gurgaon. standing orders. Beneeta Seigal Senior Merchandising Other Upper Management Positions Mr. However.Management Structure Mr.

that they can report their grievance to their direct supervisor or upper management. Customs Security requirements regarding issues like preventing trespassing. The code of conduct for Charming Shoppes Inc.”21 Corporate Responsibility/ Codes of Conduct Modelama’s Anti-Abuse/Harassment Policy is posted on the factory floors in English and in Hindi. All workers were said to have received medical attention. was displayed on the factory floor.20 Grievance Policy Procedure If workers have a problem. Received a Hindi copy of policy. U.Dismissal Procedure No information was obtained by the researcher regarding a formalized procedure. and that management works to quickly solve problems in order to maintain an atmosphere of “family.5 km from the factory.” Worker Committees Since there is no union. the company usually pays the medical expense. According to G. Union There is no union in the production site visited. but avoids paying for major injuries and illnesses. they have joint employee-worker committees required by law. There are only six recorded injuries at this site for 2006. Phase-I Gurgaon and B-57 Phase-I Okhla Industrial Area). according to the Customers Trade Partnership Against Terrorism. “We take care of all their problems. Work times for employees were also posted. companies have required them to uphold a more stringent counter-terrorism model of security in compliance with U. A resident doctor is “available at all times. traceability. a Works Committee.” there are no doctors in two of Modelama’s other production units (200.” but when asked to meet the doctor. and an ESI station 1. Medical Care There is a medical room in the factory. or CTPAT model.S. Page 34 . the researcher was informed that he was at another production site. in compliance 20 21 Received a Hindi copy of group meeting minutes. Management stated that it would have no objection if workers wanted to form a union and they are free to associate with any group they desire. preferring to dismiss the workers. tampering. Manicandan’s “Mapping First Tier Suppliers in Garment Industry in Delhi. If workers suffer from minor injuries. but only in English. There is a company dentist that comes every Thursday. Security New security measures have been implemented since the quota phase-out. The factory locks its doors at night. nor have there been unionization attempts. so there is no need for a union. an Anti-Harassment Committee. such as a Health and Safety Committee. and a Sexual Harassment Committee. HR Manager indicated that there are very few worker grievances.S.

Sanjay: …We have to train the operators to work on these re-engineered machines and I myself have worked on the machines eight hours to familiarize myself.with these measures. MNCs would present their contract orders to Modelama as an Indian company. stated that seasonality was not an issue and that they have orders year-round. In an interview with Apparel Resources magazine. and government bureaucratic hurdles regarding labor law. low relative levels of productivity. Vinita.22 X. In 2002. “Build Quality Rather Than Check The Quality. 25 crore in jackets alone. 22 Pandey.” Apparel Resources. IX.perator. We do not need masters. The idea is to convert a single lockstitch machine into a machine which can do a specialized jobs…so that we do not have to worry about the skill of the o. however. advancing the common view that the government should amend labor law to increase worker flexibilization so that companies can more easily fire workers when there are fewer orders in the winter. it would appear that seasonality should be less of an issue for them than other companies who do not manufacture winter clothing. The Director mentioned that seasonality is an issue. Modelama would then shift the actual manufacture of the product to either countries with lower labor costs like Sri Lanka or duty-free countries. whose upper management and design departments would remain in India.” a more developed system of subcontracting modeled on Southeast Asian business strategies. Lalit: Machines change according to the product requirement…We have to be flexible because the buyer doesn't buy one thing all the time. This can be achieved by deskilling operations to the simplest and most automatic level…We convert the machine with the help of our in-house engineers into individual units by developing different work-aids that convert a normal lockstitch machine into a workstation. Page 35 . The HR Manager. relative strength of the Indian rupee to the dollar opposed to weaker Asian currencies. the former Director stated: Lalit: We do not consider machines as individual equipment but as a complete workstation. A business strategy that Modelama is looking into is “triangular shipping. BUSINESS BOTTLENECKS Main problems hindering financial success according to the Director are poor relative infrastructure. only their department is kept open and the rest of the factory is shut down at 6 pm. Lalit Gulati. and Sanjay Gulati. the Chairman stated that though the South is better known for it. If workers stay for overtime. Modelama successfully invested in the necessary infrastructure to export If Modelama has had as much success in outerwear as they have stated in press releases. the Chairman. and then ship the product from that country. INDUSTRY COMMENTS The Director opined that the only reason MNCs were still placing orders in India is because they did not want to overexpose themselves in China. <http://apparelresources. we need operators who can be trained.asp?msg=2710&cod=newsin detail&nam=>.

when they began to develop the infrastructure to manufacture outerwear. This is likely the factory to which buyers are taken. who was not available on the date of the interview. The unit visited is the site of their corporate offices and was built two years ago with the help of industrial engineers. The high level of attention paid to infrastructure and personnel management is probably not typical of their older factories. The only question that management would not answer was regarding a detailed financial breakdown of the company. XI. but directed the researcher to her colleague. Contact was made by calling the general inquiry number on the website.Sanjay: It is a very unique combination of machines that we have that gives us this flexibility of handling [versatile] product [mixes]. as it is the most modern. Modelama was the first company to be interviewed by the researcher. Modelama was very open in disclosing information about the factory unit. Page 36 . PERSONAL EXPERIENCE Modelama used an Italian consulting agency for the design of two of their factories. then was directed to a Senior Merchandising agent.

and Website: Head Office Bangalore Belandur Gate. business articles.2. Karnataka Tel: +91-80-28439214/15 Fax: +91-80-28439356 E-mail: shahiblr@vsnl. Two or three other units are in Delhi (Noida) and a fabric processing unit. the owner of the company. Page 37 . Divisional Manager of Marketing Mobile: 93-13369269 E-mail: ajay. Senior Management Ashok Production Units: Plot No. Manicandan’s CEC report. Tel: +91-129-2273970/80 Fax: +91-129-2273485/91 E-Mail: seh@vsnl. Palmprint Textile.24 23 Unit visited by the Head Office Faridabad23 Industrial Plot 1.shahiindia. Giri. CONTACT INFORMATION Contact People J.raman@shahi. Sector 28 Faridabad 121008. LTD. Shahi Export House has a total of eighteen manufacturing units. I. BRIEF HISTORY Incorporated in 1974 in Delhi. Sector Ajay Khanna. General Manager of Marketing Mobile: 98-18212505 E-mail: ashok. 1. Faridabad.D. the company website. The remaining woven and all knit production sites are located in Bangalore. SHAHI EXPORT HOUSE PVT. is former vice chairman of the Apparel Exports Promotion Council of India. is in Ghaziabad. The information in the following company report was primarily obtained from interviews with the General and Divisional Managers of Marketing. Harish Haryana. Sarjapur Main Road Bangalore 560034.

indigo dyed units. H & M. JC Penny’s. the sole proprietor was Harish Ahuja. though any exporter of this size must have at least one registered EOU for importing Target Stores. pique. full jacquards. Family-owned.The fabrics range includes solids. golfwear. Jeans Dynam. Carolina Colours. Von Daniels. GAP.pdf/$FILE/Fashion _News_05_02_en2_Webb.26 24 Fashion Newsletter. tanks tops. Arizona Jeans Co.nsf/pub/Fashion_News_05_02_en2_Webb. sleepwear. TKS Basics. BASIC PROFILE Legal composition of the Company Private Limited Company. double mercerized. ladies' and girls' dresses. and circular woolen knits. turtlenecks.. American Eagle. Solutions (New York). Exports/Imports 100% exports. 2. heavy jersey in cotton. EOU Information No information was obtained regarding registration and EOU capabilities. interlock. <www. 100% polyester polar fleece. 25 From company brochure. t-shirts. Shahi has expanded to home furnishings in the past year. jackets. Akademiks.25 Wal-Mart. acrylic wool. John’s Bay. 2005. jacquard. Clients Bobbie Brooks (Woman). Old Navy.III. Cento Mila. nor does it currently have plans to do so. rib. Faded Glory. textured knits. The knitwear product range includes 3 button polo shirts. Seacorn. Product Mix Areas of specialization are mostly ladies woven tops and men’s tops. No Boundaries. Shahi’s product line covers casual and formal men's and boys'. No. St. flat back rib. A & F. polyester cotton. Carolina Blues.pdf>. yarn dyed single jersey. ladies' & girls' blouses . engineering stripers. It is primarily information taken from the website with a few new passages regarding Human Resources and corporate responsibility. which was printed in 2005 by the Bangalore office.. mock neck. American Khakis. Page 38 . Enzo Lorenzo. Sag Harbor (Sport).lawson. spun filament. At Last and Co. Euro Open. Cherokee. polyester viscose. Place Jeans. men's and ladies' bottoms. Cross-Bow. lingerie. cotton fleece. Ralph Lauren. loungewear. Up until a year ago. but it is a small fraction of turnover ($5-10 million). Hollister Co. Abercrombie & Fitch. The Children’s Place. who is now the Managing Director. Van Heusen. Natural Issue. (Pacific Merchants). Bleu. tailored collar polo shirts. 26 Remaining client names were obtained from interview with Divisional Manager of Marketing. Liz Claiborne. Shahi does not manufacture for the domestic market. sportswear.

pdf>.8 million 7-14 million 14 million % of Sales 50% 12-17% 10-20% 1% 2% 2% 5-10% 10% target Per Unit Price31 $3.8 million 14-28 million 1.25 $0.65-$1.pdf/$FILE/Fashion_News_05_02_en2_Webb.13 $0. Turnover estimates varied by tens of millions of dollars between the GM and the Divisional Manager of Marketing.4 million 2.78-$1. accessed July 2006. 31 Based on the company’s average unit price of $6.07 $0.11 $0.65 $0.30 $0. No.nsf/pub/Fashion_News_05_02_en2_ Webb.lawson.033-$0. Did not obtain average retail markup information. FINANCIALS Turnover $140 million 2005-200627 $120 million 2004-200528 $90 million 2003-200429 Other Financials Breakdown of Sales Revenue30 Est USD 2006 70 million 16. 30 These figures were estimated by the Divisional Manager of Marketing in the space of 5-10 minutes. so figures cannot be considered accurate.Awards Wal-Mart International Supplier of the Year 2000 (can’t read others) IV.13 $0. 32 Embellishment costs such as embroidery depends on style. though generally it is four to seven times the unit price of the garment. 29 Estimated by General Manager of Marketing. Page 39 . 2005 <www. so they can only be thought of as a rough approximation. It can be none or most of the unit price. Percent of sales is based on an average estimate given by the Divisional Manager of Marketing.65 Material Cost Labor Trims and Packing Depreciation Machinery upkeep Overhead Embellishments32 Profit 27 Estimated by General Manager of Marketing.8 million 2. 28 Fashion Newsletter.8-23.5 USD.

Shahi's Export Market 1% 15% Europe U.S.A.


Other Licensees (Japan, Middle East, Australia)

Major Clients Brand Wal-Mart GAP H&M Target Stores JC Penny’s Liz Claiborne Abercrombie and Fitch American Eagle

Origin U.S. U.S. Europe33 U.S. U.S. U.S. U.S. U.S.

Lgth of Relationship 18 years 6 years 6 years 4-5 years 15-16 years 3 years 5 years 4-5 years

% of Turnover 10-14 7-14 5-14 3-8 3-8 3-4 3-4 3-4

Stated that do not have many huge clients; sales are mostly spread out among 15-20 buyers at any point in time. Buyers haven’t changed considerably post-MFA, though they are planning to increase shares in Europe. Buying Agency or Direct About 30% direct relationships, the rest through buying agencies. Stated that it is easier to deal with buying agencies in India than to maintain a direct relationship. Unit Prices (USD paid to factory per piece of garment supplied) Unit Price Range Average Product Mix Type $3.30-$26 $6.50 Casual, High Fashion Mostly FOB34

Delivery Time 60-120 days

Liz Claiborne can be up to $20, A & F can be up to $26, Wal-Mart is usually $4.50. Unit Prices Since MFA Phase-out Unit prices have gone down an estimated 7.5-15%, depending on the product. Prices for pants have dropped more, because of the nature of the quota restrictions.
In the U.S. as well, but the majority of the sales are to the European market. H & M is also the company’s biggest client in Europe. 34 Very few landed costs, though Abercrombie was mentioned as a landed cost buyer.



VI. INFRASTRUCTURE Subcontracting Shahi does not subcontract. Production System Assembly line system. Production Capacity Shahi as a whole: 2.4 -2.8 million PCs per month All Delhi factories: 300,000 PCs per month Production site visited: 150,000 PCs per month The knitwear sewing facility is capable of producing 250,000 pieces per month. Efforts are on to increase the knit production capacity to 0.5 million pieces per month. When the researcher visited the unit, Shahi was producing orders for many different buyers, among them 85000 pieces of peasant blouses with lace trim for GAP (Old Navy), denim jeans for Woodland, and 5,000 pieces of embroidered corduroy fashion blazers for Monsoon company. Design Shahi has two design departments located at the head offices in Delhi and Bangalore. Buyers send a “technopack” and/or samples of the “look” they’re going for, Shahi’s design departments produce a sample range for the buyer, who then shops around until they reach some sort of agreement. Quality Control Shahi has a fabric division that handles knitting, processing, and inspection. Fabrics are sent to in-house testing facilities to ensure that they adhere to STM standards. The laboratory is equipped with a Datacolor Computer Colour Matching System coupled with a Datacolor automatic Dispenser to ameliorate human error as well as a Mathis Padder with Dryer and Steamer and a replica pilot plant of bulk dyeing machines. The lab to bulk co-relation is maintained above 95%. The lab has a Datacolor infra-red dyeing equipment for exhaust dyeing. The color management group handles the product shade sorting and color related defects like listing and end-to-end problem detection. It is equipped with various machines that check tensile strength, tear strength, abrasion resistance, pilling resistance, shrinkage, fabric drape, fastness to various agencies (washing, crocking, perspiration, etc.). Processing Palmprint Textile is Shahi’s wet processing plant in Ghaziabad. Woven fabrics like poplin, twill, canvas, gauze, etc., and made of cotton, linen, rayon, and lycra blends are processed to international standards. Shahi makes prints like reactive, vat color discharge on reactive grounds, and pigments apart from some special printing techniques like burnt out effects on polyester-cotton blends. The unit produces 9000 meters of processed fabric per day. The pre-treatment section houses an Osthoff Gas Singe & Desize machine,



Benninger Continuous Bleaching Range, Ben Dimensa Chainless Merceriser. The Dyeing Section has machinery like a Kusters Cold Pad Batch & Benninger wash range, Continuous Dyeing Range , Jet Dyeing, Benninger Pad-Dry (with Kuster Padder) and Benninger Pad Steam Range. The unit has twelve color rotary Printing Machines, with after treatment machines like continuous Ager, Loop Ager , Star Agers , Polymerisers and Washing Ranges. The designing department is computerized with small yardages tackled on a Baby-Pilot Rotary Machine. The Finishing Section is equipped with Stenters, a Relax Dryer cum baker, Emerising (Peaching) Machine & Preshrinking Range, Speciality finishes (apart from normal silicon or soft finishes) like easy care (Self Smoothening rating 3-3.5), Permanent Hydrophilic, Stain repellant–Teflon , Water repellent, and application of Anti microbe or Permanent Fresh and Permanent Perfume. Knitwear The knitwear sewing facility is equipped with Pegasus top feed, micro processor controlled with automatic trimmers, CF Italia Collar attaching and latest Button Hole Machines capable of handling fine textured knits. Number of workers 15,000 in all of Shahi’s production sites 5,500 in all of Shahi’s Delhi (Faridabad and Noida) units Shahi’s Delhi factories employ 80% female workers, while in the Bangalore factories they are 90% female. Workers at production site visited Department and category Production +Unskilled +Semi-skilled and Skilled sewing operators +Line supervisors Cutting +Unskilled fabric spreaders +Skilled machine operators Centralized Storage35 +Semi-skilled and unskilled +Skilled workers +Staff who manage quality control Washing +Semi-skilled +Skilled machine operators Finishing (incl pressing/checking) +Unskilled (heavy lifting) +Semi-skilled +Skilled

~Number of workers Total 1800 400-500 1100-1300 25 Total 85 60 25 Total 150 120 20 30 Total 150 120 30 600 50 410 100

Gender Mostly female -90% female Mostly male Mostly male ---------Mixed

Stores for Noida production units as well.



incentives depends on how many pieces are finished. Durkopp Adler. Embroidery Most is done by computer. stone wash. grading. merchandising.800 in all of Shahi’s Delhi (Faridabad and Noida) units 750 in production site visited The CAM based cutting department can make 75. This department is responsible for timemotion studies and an operation breakdown.+Supervisors and dpt/line-in-charge 40 Sampling (think incl in production) 50-150 Remaining marketing. fusing press. who are not involved in these meetings. It is also equipped with single needle lock stitch programmable machines with UBT. enzyme wash . They conduct production planning meetings jointly with managers and supervisors by department. The latest CAD software enables quick processing of pattern creation. Productivity Schemes The unit visited has an industrial engineering department with eight staff. Ngai Shing. desize soft wash and golf ball wash. Sampling This is a fairly large department in the production site visited. There are two departments for sampling. The incentive scheme only applies to skilled and semi-skilled workers. and there are quality bonuses if clothes do not need repairs. Washing The washing facility puts out over a ton of garments per day through specialized wash treatments such as softener wash. collar/cuff turning and blocking machines. shipping staff Total number of workers: 3. while the 60 multihead computerized embroidery machines have a capacity of 800 million stitches per day. which can be 10-25% of monthly salaries depending on how difficult the style is. but they Page 43 . very little is done by hand. For example. In finishing. in sewing. pocket machines and automatic pocket welters.000 Mostly female Mixed Machinery 6. Juki. line supervisors convey target setting to them. Hashima and Kannegiesser. and it was stated that each unit has a similar department. single needle top and bottom variable feed machines. They also conduct joint department meetings.500 in all of Shahi’s production sites 1. feed-off-the-arm machines. one for production and another room with rows of computers in which employees work on digitized patterns and samples. marker making and global electronic exchange of pattern data. The production unit boasts machines from Brother. in which workers get bonuses for exceeding their targets. accounts. These meetings set targets for the shop floor workers. double needle-needle feed split bar machines. every hour the target is marked. Its implementation and form depends on the department. The Divisional Manager of Marketing states that they always had incentive schemes.000 cuts per day. This unit has an incentive scheme for productivity.

lower labor turnover. and another fifteen-minute tea break between lunch and the end of their shift./month) Unskilled 2448 Semi-skilled 2558 Skilled 2708 Highly skilled 3008 36 Information from interview with the Divisional Manager of Marketing and the researcher’s observations.have recently gone through major changes in their implementation. 4200.000 Supervisors/Mid Mgmt 10. leaving male sewing operators and some female ones. VII. Page 44 . This early shift seemed to be entirely female. and a decrease of waste in the cutting department. Manicandan’s CEC report says a supervisor with eight years experience makes Rs. Manicandan’s CEC report. 38 According to G.38 Wages As Estimated by Divisional Manager of Marketing39: Category Average Wage (Rs. these benefits are additional. WORKING CONDITIONS36 to From Work timings (Shift 1) 8:30 am 5:00 pm37 Shift 2 9:00 am 5:30 pm Shift 3 9:30 am 6:00 pm The office opens at 9:30 and closes at 6:00. However./month) Unskilled helper 2200 Semi-skilled operator 3600 Skilled operator 6. Benefits of the incentive scheme include a 10% increase in productivity in past two years in the sewing department. 37 The researcher toured the factory around 5 pm. the workers at this unit do not get a tea break. when the first shift of workers were getting off. there was still a strong female presence in the factory. 39 Stated that these numbers do not include ESI and PF. The workers get a fifteen-minute tea break between the start of work and their half-hour lunch break. an increase in attendance.00040 Minimum wage is posted as follows: Category Wage (Rs. 40 G. Workers use their ID card to clock in and out of the factory.

People who are motivated to excel and trained in different disciplines of garment 41 From interview with the Divisional Manager of Marketing. HUMAN RESOURCE POLICIES41 “Human intelligence is the greatest asset which we possess. after which the HR manager will put them into a set wage scale depending on their ability. Workers also have access to an on-site crèche for their children during the workday. Workers are then on a three to six month productivity probation. Labor Turnover Estimated at 7-10% per month. Most sewing operators have been at Shahi for around two years. and a three-month maternity leave. 7500 are provided with ESI benefits. they are only evaluated to see what category of skill they fall in.Wage Setting Procedure Managers interview workers and then take a trial of their work for one day. Page 45 . Estimated two hours per week per worker in the sewing and finishing departments. Workers who receive less than Rs. Overtime Stated that there is not a lot of overtime because they plan production with target setting. and negligible overtime for the other departments.” ~Shahi’s website Shahi’s updated brochure includes lengthy passages stating their dedication to innovative Human Resources approaches. PF. Wages are fixed and there is no negotiation. if overtime is needed. which the researcher observed. they try to have the male workers pick up the extra work instead of the female workers. Benefits Stated that workers do receive ESI. VIII. The Shahi workforce consists of committed and highly skilled people. Shahi’s overtime policies take into account gender.

Union Didn’t ask directly. making Shahi one of the most sought after organizations to work for in the garments arena. but definitely not. In the Shahi factories in Bangalore. Particularly so as clothing corporations the world over are labor intensive and it’s imperative that they are well looked after. they provide transportation to overcome those issues. Grievance Policy Procedure Presumably. workers revealed that there had been unionizing attempts that were suppressed by the management. not the outskirts of cities. There is also an orientation program for upper level staff.manufacturing. Employ more women and uses HR strategies to disempower workers and remove blatant rallying points for workers. Manicandan’s CEC report. but it is not necessary to do so here. it is all direct employment. so they do not need to train them. 42 The brochure and website both state that human resources are developed using the training procedures of Kurt Salmon Associates. Dismissal Procedure No information was obtained regarding a formalized procedure. the worker forum is a “safe space” in which workers can address any issues they have with managers. Worker Committees Stated that there is a worker forum that managers also attend. so the labor is here. Page 46 . Training depends on the job description of the worker. Shahi has invested in a dedicated personnel management division to take care of its labor. They do not recruit for shop floor positions beyond posting signs on their gates and through wordof-mouth. Labor problems get a kind ear and are followed up on a priority basis. In G. 42 From company brochure and website. Some are skilled. and union organizers were either dismissed or isolated from other employees. Worker Training Shahi trains the unskilled operators for a period of a week. They are able to have female workers because they are in heart of Faridabad. Shahi has ensured all systems are in place to make sure that everybody works in an extremely salubrious environment. Recruitment Policy Shahi states that they do not use a labor contractor.

” Shahi’s updated brochure includes add-ons regarding treatment of their labor force. Codes of conduct posted in factory include Carafour.45 Medical Care There are male and female onsite doctors and nurses in case of industrial accidents. The company organizes fire drills to keep employees alert in case of emergencies. American Pacific. More of these were in both Hindi and English than I’ve seen at other factories. seminars. securing of employees’ earnings through e-com (EDI) and ATM cards.Corporate Responsibility/ Codes of Conduct The company has a biweekly English magazine that publishes news and articles by workers. Awareness programs are conducted for employees on health. Target Stores. A full-fledged Dispensary and Ambulance is provided with a doctor always on standby. Liz Claiborne. It aims at providing a conducive environment for employees to protect.” “Anything worth doing is worth doing well” and one about the importance of personal hygiene. and lectures. And some of the remarkable provisions for employees include: eligibility of workers for health insurance. There are many signs posted on the factory floor with stating things like “Discipline: Team work is an easier path to excellence. Charming Shoppes Inc. educational facilities for children. personality development through work shops. and support their families in the best way possible. Nautica. From interview with Divisional Manager of Marketing and joint worker-manager magazine. and nutrition related topics. Fire fighters are on high alert at all times and every floor is equipped with the right fire fighting equipment. Best employee awards are given for overall discipline. and a first aid room in the facility. Wal-Mart. The Limited. promote. Dayton Hudson Corporation. training facilities for employees. Strict compliance with anti-child labor law is ensured. in fact nearly all had a Hindi translation. Evaucation boards are put up on all floors along with photographs of fire fighting personnel. Shahi Export House adheres to International Labor Legislation. hygiene. attendance and productivity. They have activities for the workers such as an annual cultural week with games and contacts.44 Safety measures are given utmost importance.43 Shahi’s website claims a dedication to the environment and that “waste reduction is practiced to the hilt… the plants are environment friendly with Effluent Treatment Plants at all the wet processing units. 44 43 Page 47 . and American Eagle.. 45 From company brochure and website.

4 million pieces during the peak season and 2. who reported her case to the police. Shahi does not have a sexual harassment committee.000 pieces per month. Stated that they need better infrastructure regarding port system. now they are getting competition from small exporters. since it takes too much time to get clearance at the ports.47 XI.S. tampering. according to G. Page 48 . as he would not permit the researcher to do so.46 Shahi recently opened up a warehouse in New Jersey.S. only different season. or CTPAT model. The picture of the minimum wage was taken by the manager. but I did not have to show it. Supposedly all visitors have to have proof of identity. now they do. as they produce about 2. Manicandan’s CEC report. PERSONAL EXPERIENCE Obtained contact information from NIFT. BUSINESS BOTTLENECKS Seasonality is an issue. traceability. INDUSTRY COMMENTS Trying to build up capacity to produce outerwear by next year to reduce seasonality issues. though the researcher was not permitted to take pictures during the tour. Shahi is currently constructing a production unit in Bangalore that would have a capacity of manufacturing 200. however said they currently retain workers during the off-season because it becomes a problem to rehire workers. companies have required them to uphold a more stringent counter-terrorism model of security in compliance with U. Customs Security requirements regarding issues like preventing trespassing. However. The production unit was enormous.1 million PCs during the off-peak season.) X. and there was some controversy a few years back regarding a male manager and a female worker. Mentioned that Southeast Asia has the same problem of seasonality. U. 46 47 From interview with Divisional Manager of Marketing. Shahi has to decline some orders during peak season (OctoberMay). IX. according to the Customers Trade Partnership Against Terrorism. (Stated that retained incentive schemes and everything off-season. and then not working to full capacity during the off-season. However Shahi is trying to diversify their product range so that it becomes even less of an issue. where the garment industry is over 90% male. From interview with Professor Rajesh Bheda of NIFT. before they didn’t have the quota holdings to compete. Suppliers have changed post-quota. Also argued for more labor flexibility.Security System New security measures have been implemented since the quota phase-out. Shahi is notable in that they have a majority female workforce in a place like Delhi. The security guards inside were asleep. It is not a huge issue. The Marketing Managers did not mention any new initiatives taken to deal with the issue. Website contact numbers are out-of-date.

20. CONTACT INFORMATION Contact People H. M/S JYOTI APPARELS An ISO 9002 Company Government Recognized Trading House The information in the following company report was obtained primarily from an interview with the Managing Director. K. Magu. Manish Mall Assistant Production Manager Mobile: 9899096999 Registered Office48 D-42 Okhla Industrial Area. Managing Director Senior Vice-Chairman of the AEPC (Apparel Export Promotion Council) Mobile: 9810029999 E-mail: hklmagu@jyotiapparels. 500. two are in Manesar (southwest of Delhi. who had contacts in the garment and textile industry. Magu and deceased brother. and two are in Okhla Industrial Area (New Delhi). a company profile and Standard Operating Procedures given by the Managing Director. 26810804 (D) Fax: +91-11-26819684. The company has increased sales an estimated 30-40% in the past year. of which five are in Gurgaon. shop floor observations by the researcher. he started business in 1977 with an investment of Rs. Unit visited by the researcher. which roughly doubled each year until 1984. HR strategies and production from Assistant Production Manager. south of Gurgaon). L.111 USD) in the first year. H. 50 Conversions are based on today’s exchange rate (Rs. 51 48 49 Unit visited by the researcher. 41/42 Phase IV Udyog Vihar. and an interview with an Assistant Production manager. Gurgaon49 The researcher was not able to obtain the addresses of all nine factory sites. The company’s turnover was Rs. 26817910 Website: Jyoti Apparels does not have a website.000 ($444 USD50). 110020 (India) Tel: +91-11-26816917. He had no experience. 000 ($11. Phase-I New Delhi. but by networking through his brother.K. Page 49 .L.3. due to the quota phase-out. BRIEF HISTORY Company established in 1976 by Mr. 45~$1) and are not adjusted for Production Units Magsons Exports. and remaining information is from observations unless otherwise noted. 51 Information on company background from Managing Director. E-mail: jyotiapparels@vsnl. II. I.

T.III. India Imports. Carol Anderson. but the majority is summer clothing. L. K. Specialize in high fashion made of exclusive prints. Otto Australia and New Zealand: Just Jeans. Charming Shoppes of America (CSI). Adams. Littlewood. Oxford Industries Inc. as it mentions “Quota Holdings: We have sufficient quotas in all categories of USA. Europe and Canada. Woolrich. House of Frasers. Zellers. solid dye. Exports/Imports 100% exports. Blair Corporation). BASIC PROFILE Legal composition of the Company Partnership firm. Magu and Mr. Siplec (E Leclerc). Evans.. Prenatal. Enjoy.D. skirts. Donn Kenny. Jyoti manufactures some winter clothing (about 20% of production volume). Karstadt Netherlands: Wehkamp. Brumel. British Home Stores. Roamans. Cabella’s. Freeman’s. Gus. Tesco France: C. Manufactures woven (80%) and knitted (20%) garments using mostly yarn dyes. Canada: Hudson Bay Co. International. Promod Germany: Neckerman. Kishore Magu EOU Information No information was obtained regarding a registered EOU. gents. K. The Farmers Trading Co. V F Jeanswear (Wrangler). Mexx. Zeeman Italy: La Rinascente. Miss Erica UK: Marks & Spencer. Product Mix Areas of specialization include ladies’ (roughy 80% of production volume). sequins. blouses. Jyoti’s strengths (and the North in general) are in high fashion garments with embroidery. Primark. viscose yarn and denim fabrics.” it was pre-quota phase-out January 2005). Lane Bryant. Debenhams. Page 50 . 52 According to profile (which is out-of-date. H. Phool Fashion Ltd. owners are Mr. and children’s (roughly 15-20%) readymade tops. Onyx Denmark: Kompagniet Switzerland: Manor. Wal*Mart. Jyoti does not manufacture for the domestic market. maybe 2004. Zara-Indtex Awards The researcher was unable to obtain any information on vendor awards. Clients52 USA: Kellwood (Sagharbor). Brylane.. and other garments. Reitman Israel: Fenomen Malaysia: Metro Jaya Spain: Mango. J D Williams. (Target Stores. and ethnic handiwork accents. with embroidery and beadwork. .

A.000. BRAND INFORMATION Jyoti's Export Market % of Sales U. 700.50 1. on average.50 1.50 1. Malaysia) Europe 53 Financials.6-2. 54 These figures were estimated by the Managing Director in the space of 5-10 minutes. which accounts for the inconsistencies. 10% 50% 40% Others (Canada. this figure includes the amount the MNC spends on shipping.S.6-2. 57 Since Jyoti’s unit prices are mostly FOB.5% Subcontracting Cost 1. and cannot be used as an indicator of profit. Japan. 55 Based on the company’s average unit price of $5 USD.5% Other Manufacturing 1.000 (15.6 million 10 $0.50 1.5% Overhead and profit 1.6-2.57 V. FINANCIALS Turnover 12 million USD (either 2003 or 2004) Current year 18 million USD Other Financials Current year sales Rs.5% MNC’s that source from Jyoti.3 million 60 $3 10-15% Labor 1. excluding the $12 million USD figure from the company profile. Latin America. were estimated by the Managing Director on two different occasions.555 USD)53 Breakdown of Sales Revenue54 Est USD 2006 Per % Retail Garment55 Price56 Material Cost 9.6 million 10 $0.6-2. Page 51 . 56 Average retail markup is four ($20) to six ($30) times the unit price of the garment. costs. etc.IV.6 million 10 $0.6 million 10 $0. retain 75-84% of the sale of a retail item. so they can only be thought of as a rough approximation. duty.

Two of the factories are 2.58 Production System 58 See Standard Operating Procedures for detailed subcontracting information. INFRASTRUCTURE Company has nine production facilities.000 square meters.000 square feet of land spread over ten different areas (including the registered office. American Eagle. he stated that unit prices have decreased about 10%. Did not mention any direct relationships. primarily through the Triburg buying agency. the company has about 20. VI. Subcontracting Jyoti does not subcontract the production process. Subcontracting has not changed since quota phase-out. four are 1. which is not a production facility). but later stated that overall they have remained stable. Overall. Average Unit Prices (per piece of garment supplied) Unit Price Origin Retail Markup $4-5 USD Across the board 4 to 7 times Type Mostly FOB Delivery Time 60-90 days Unit Prices Since MFA Phase-out During the first meeting with the Managing Director. It is notable that Jyoti subcontracts to a Shahi processing facility.000 square meters.000 square meters. one is 8. Page 52 . Prices and other sourcing details are negotiated through the buying agencies. and Gloria Vanderbilt through buying agencies. but they do subcontract their fabric sourcing and processing.Major Clients Brand India Imports Lane Bryant Marks & Spencer Mode Liz Claiborne American Eagle Tesco Adams Littlewood Sainsbury Okaidi Orchestra Origin UK USA Holland USA USA UK UK UK UK France France Length of Relationship 29 years 10 years 2 years 1 year 1 year 15 years 15 years 10 years 4 years 3 years 2 years Total: % of Turnover 10 10 10 10 10 5 5 5 5 }5 75 Buying Agency or Direct The company does business with MNCs such as Liz Claiborne. and two are 600 square meters.

59 Approximate number of workers (in all facilities) Position ~Number of workers Tailors60 1200 Fabric Cutters 125 Thread-cutters (use embroidery machines) 200 Pressers 75 Fabric and Accessories Storage Workers 40 Helpers 50 Accounts personnel 20 Miscellaneous 100 Total number of workers in all facilities: 1400-1800 Machinery (at all sites) Jyoti has 1000 Juki stitching machines. Quality Control Jyoti Apparels has a quality control assurance team with both an in-house auditing scheme and third-party inspection. feed of the arm. Page 53 . Design/Sampling Small design department. washing machines and set of 84 stem boiler irons. elastic insertion.000 and 300. lock stitch single needle and double needle. over locks.000 pieces per month. Production Capacity According to profile. cross stitch/lock stitch button/ button hole/ snaps.000-90. shell stitch (Merrow). According to company profile. computer embroidery. piccoting. 8000 woven pieces per day and 1200 knit pieces per day. between 240. Sometimes Jyoti has people from UK and France do designs for them.000 pieces per month. which varies according to the product. Managing Director and Assistant Production manager stated they were all skilled. perk-chloro plants. fusing machines. and brown machine-embroidered skirts for American Eagle.Uses an assembly line system. belt attaching. At production site visited. but primarily just take paper designs from buyers and converts it to clothing. dry cleaning. The researcher observed production of ladies’ white blouses for Emma James (Liz Claiborne). 59 60 See SOPs for detailed quality control schemes. usually 80.

though the researcher was not able to obtain a photograph of the plan. and embroidery departments.Ground Floor Plan Second Floor Plan There is also a basement floor with fabric and accessory storage. cutting. Page 54 .

etc. Machinery includes one bandknife cutting machine and two straight knife machines. observations. Checking/ Finishing/ Pressing (40-50 workers) The finishing area had lines of workers pressing and folding clothes. There were two workers on the machines. There were no fans in this room. Fabric and Accessories Store. with one cutting master. Page 55 . Production (~180-190 Workers)61 on Second Floor Machinery includes about 200 Juki stitching machines. three thread-cutters. Washing (10-15 workers) Washing was located on the topmost floor of the building. two supervisors in an office in the corner. is data for production site visited. The workers in this department were all male. and the remaining workers helpers. This was the only department that had any female workers. Cutting (20-30 workers) in Basement There are four lines in the cutting area. Sampling (15-25 workers) The fabric store had a sign reading “Triburg..” which is the buying agency that many firms deal with. The department has one finishing supervisor and one assistant finishing supervisor. the researcher did not have time to write names) Magsons Export (a Jyoti Apparels Production Site) Finishing: One in-charge Finishing: One supervisor Finishing: Pressing Supervisor Finishing Quality Administrator (QA) Finishing Quality Checker (QC) Finishing: Quality and Production Floor After washing 61 Number of workers per department. one cutting assistant. Embroidery (observed 5-7 workers) Workers have to take off shoes before coming in because of “dust.” so they are barefoot when operating the computer embroidery machine.(Right) A view of the basement and ground floor. Document given to Buyer About Shop Floor Management (was displayed on shop floor. It did not seem as modern a unit as other top tier factories. directly facing cutting tables and below looking up at the finishing department. Packing (10-15 workers) Did not observe department during visit. Some of the fans were broken or not on.

If workers exceed this by 1 lakh. production manager. Then he stated that they conduct production planning meetings with the factory manager. security tag Four operators Step 2—Initial Pressing One supervisor Step 3—P. button placement One checker Step 4—Initial Checking Two checkers Two thread-cutters Productivity Schemes There are no incentive schemes according to the Managing Director. Wise Tag check with care. according to the Assistant Production Manager. then the factory will give incentives. finishing supervisor. workers are offered a wage based on this evaluation. extra button.O. there is an incentive scheme that depends on monthly shippings.Step 1—Care label. After one day period. supervisors conduct time studies evaluating the skill level and productivity of a new hire. The production unit visited usually produces 80. The tailors and some finishing employees receive wages on a daily basis. Labor Turnover Estimated worker turnover per month at 20%.000 pieces per month. WORKING CONDITIONS From 9:15 am 11:00 am 1:00 pm 4:00 pm to 6:00 pm 11:15 am 1:30 pm 4:15 pm Work timings Tea Break Lunch break Tea Break Wages HR Manager stated that employees receive the minimum wage.000-90. which is not subject to negotiation. First the Assistant Production Manager stated that they do not perform time studies. while the rest of the employees receive a monthly salary. and gave a copy of the minimum wage scheme for Haryana. Benefits Production manager indicated that workers receive ESI and PF. VII. merchant/buyer (for style). rather they calculate targets manually by hourly production rate. However. Page 56 . Wage Setting Procedure For shop floor workers. it is all left to selfdiscipline. and cutting supervisor who set the production lines and targets based on manual time-studies.

The Assistant Production Manager stated that if workers are not productive. K.VIII. and the extent of their recruitment is posting signs on their front gates. Workers do not need experience per se. Recruitment Policy Jyoti states that they do not use labor contractors. but these tend to be more middle management people. though the Director mentioned that workers learn on the job. Management Structure Mr. Magu Partner Founder/Chairman Mr. HUMAN RESOURCE POLICIES There are no common policies across the plants. Kishore Magu Partner Other Upper Management? Factory Manager Management Staff/Accounts Personnel Production Manager Manish Mall Assistant Production Manager Line Supervisors Assistant Supervisor (Less skill/experience) Skilled Tailors/Machine Operators Helpers (Unskilled) Boxes with straight-line borders are positions common throughout all production sites. H. because otherwise they become permanent and you have to pay them more. but managers observe productivity and hire skilled workers. Worker Training Sometimes Jyoti trains workers during a lean period if there is time. Dismissal Procedure The Managing Director stated that they keep workers for 240 days and then change their workforce. while dotted-line boxed positions are factory-specific and subject to variance. Usually 20-25 tailors take 10-15 days to train. Page 57 . L. The Managing Director states that they recruit people from Apparel Training and Design Centers. they are given a one month notice so they can find another job and they receive a letter of termination.

Believes that there should be special customs lines at airports so that everything is not searched. Does not have its own employee code of conduct. Customs Security requirements regarding issues like preventing trespassing. he moved production to another site (now there is just the accounts staff and some sampling/design). but no visitor’s pass. production. the Assistant Production Manager stated that they do have committees. high rate of interest. etc. tampering.S.” trucks are only allowed to transport good between 11 and 4. 62 Based on interview with MD and Asst Production Manager. he did not. higher material costs (indigenous. anti-harassment. He stated that old employees with a union do not work as hard. There is a path behind the building to get to the main office over ripped metal sheets over grates.62 Security System New security measures have been implemented since the quota phase-out. A lot of money is invested into customs.Union The corporate office used to be a production site. However. He said they have the joint employee-worker committees required by law since there is no union. The first time security did not take my name in the confusion of finding a manager. For example. they cannot transfer goods during “peak hours.. lack of good fabric processing machinery. they should run cargo through machines instead. Page 58 . U. and they have monthly meetings. Worker Committees The Managing Director stated that they do not have any worker committees. Medical Care There are doctors nearby the factories and first-aid kits in the production sites. The production site visited did not have a union. Grievance Policy Procedure/Corporate Responsibility/ Codes of Conduct No information was obtained regarding a formalized grievance policy procedure. which makes it difficult to meet deadlines.S. labor laws (especially the lack of hire and fire exit policy). Second time took my name. No common policies (with HR. 63 Based on interview with Managing Director. or CTPAT model. duties. ports. etc.) across plants except for buyers code of conduct. no imports because would have to pay landed costs). etc. etc). companies have required them to uphold a more stringent counter-terrorism model of security in compliance with U. but did not give a visitor’s pass. and high transaction charges. according to the Customers Trade Partnership Against Terrorism. traceability. though neither of them knew where the medical facilities were located. such as environmental. IX. BUSINESS BOTTLENECKS63 Main problems facing the industry are poor infrastructure (need better highways. but talked about them vaguely and though he stated that he could give me committee minutes. but the Managing Director stated that when the old employees formed a union.

because of the late summer.” Jyoti supports “special garment zones. They played solitaire. The Assistant Production Manager was almost never at the factory when the researcher came to the production site. Page 59 . This year. as were much of the staff at the production site. He was very open in disclosing information. Post-quota phase-out resulted in a boom for Indian business. Phase out of quota system has brought in new buyers. production manager. or even leave their air-conditioned offices. The Managing Director is the Senior Vice-Chairman of the AEPC. Jyoti was an extremely open company in many respects. China is their main competitor. the overseas vendors couldn’t sell their inventory. before couldn’t have more because of quotas. and did nothing the rest of the time. 64 Based on interview with the Managing Director. as they still have the edge on labor productivity and good infrastructure. Companies are very upset with the government’s “bureaucratic hurdles.X.” in which infrastructure would be built up by the government. XI. it was difficult to deal in huge quantities because of the possibility of mistakes in such a large order. PERSONAL EXPERIENCE When observed work at the production site. Also. etc. did not see upper management (factory manager. and had everyone borrowing money from the bank and investing in huge factories. so could not take orders from them anymore. like American Eagle. They’ve had to become very quality-conscious and price-conscious. etc. INDUSTRY COMMENTS64 Jyoti used to deal with Wal-Mart and Target. making access to plants easier.) or some supervisors do anything. who also permitted the researcher to take photos. but unit prices got too low. labor laws would be relaxed. and one of them glanced at a time-study once. which is the capacity in which the researcher initially came to interview him.

I. 69 From an interview with the General Manager of Operations. Gurgaon 8. 192. Page 60 .110015 (India) Tel: +91-11-25431408. Gurgaon 5. Udyog Vihar. and G. Gurgaon 3. 25454895 Contact person: Padam Vaish. including: 1. New Delhi . 208. Phase III. Phase-I Gurgaon The company profiled has over ten manufacturing units. Phase III. General Manager of Operations 236 Udyog Vihar Phase-I. 506. Gurgaon. Udyog Vihar. and Bangalore. 479. Udyog Vihar. CONTACT INFORMATION65 Registered Office: 2/2. including: 1. 239. in 1977. the current Chairman. Udyog Vihar. 133. incorporated R and Co. black iron. Phase-I. Phase I. Gurgaon. 25172437. 236. Udyog Vihar. Gurgaon67 6. 25172438 Fax: +91-11-25451549. an interview with a General Manager of Operations. Gurgaon 4. 66 According to company website. Ware Housing Scheme Kriti Nagar. Udyog Vihar. and ironmongery. 151. Gurgaon 7. Phase I. 225. Phase I. Noida. Phase I.4. Haryana (India) Tel: 95124-2439701 Mobile: 9313634777 Fax: 0124-2439710-11 Production Units66 The R group of companies has over twenty-two integrated manufacturing units in Delhi. Udyog Vihar. BRIEF HISTORY68 Vijay Uppal. Manicandan’s CEC report. Phase IV. New Delhi 2. G International was established in 1983 in Delhi and 1996 in Gurgaon. Udyog Vihar. Gurgaon 2. aluminum hardware. 67 Unit visited by the researcher. B-108. Udyog Vihar. with one woven garments manufacturing unit in Delhi.69 The R Group established its own textile mill in the year 65 Disambiguation: There is another company by the same name registered in UP that produces brass hardware. Phase III. G INTERNATIONAL OF R GROUP OF COMPANIES Indian Government Recognized Export House The information in the following company report was primarily obtained from the company website. II. Gurgaon The group of companies has several offices throughout India as well as a textile mill in Tiruthani near Chennai and a tannery for leather finishing in Hyderabad. Mayapuri Industrial Area. 68 According to the company website.

Lane Bryant. trousers. Inc. to brands such as GAP.Crew. Women’s Secret. May Stores. Debhnams.1992.. Page 61 . pants.. Charming Shoppe. The tannery has modern finishing technology for leather finishes of Sheep. vests. Calvin Klein. Target. The company has set up its own offices in Ludhiana and Tirupur in order to better source fabric. Goat and Cow leather as well as nubuck. the group includes eight companies. Exports/Imports 100% exports. It has initiated a backward integration project by starting its own tannery in Hyderabad. The R Group has recently established a fully integrated production line in Noida. The R group does not manufacture for the domestic market. Land’s End. knit. Next. BCBG. The R Group began producing knitwear when Gaurav Uppal joined the company management. It specializes in (primarily) outerwear for men. Wal-Mart.N. Sigrid Olsen. Federated Stores. skirts etc. Spigel. semi-nubuck. semi anilines. waxy distressed/ oily nappaloans. women and children including shirts. Ann Taylor. ladies tops. Liz Claiborne. and leather high fashion garments for men. Clients The R Group sources to over fifteen countries. Monsoon. and Marks & Spencer. while Vijay Uppal and Gaurav Uppal are Joint Managing Directors. III. The group launched a leather manufacturing unit in 1989 specializing in high fashion leatherwear under the management of Sunil Kapur. Awards 70 According to the company website. Mexx. which will specialize in ready-made specialty shirts. J. Tommy Hilfiger. Polo Ralph Lauren. antiques. The company has already started manufacturing leather accessories and is further expanding with a bigger factory planned in Gurgaon.K.. Mervyn’s. skirts. Etams Miss Sixty. Cortefiel. D. Betty Barclay. Product Mix Areas of specialization include ready-made woven. cargo pants and shorts. anilines. pants and shorts. Including the original R and Co. women and children such as jackets. R Global was incorporated in 2002 at Bangalore. Timberland. Dillard’s Sears. BASIC PROFILE70 Legal composition of the Company Virender Uppal is the Managing Director.Y.

Export Performance Chart71 Other Financials No other financial information was obtained. U.S.A.A.S. Page 62 .A.A. 90% Major Clients Brand GAP Macy’s Wal-Mart Dillards Liz Claiborne Federated Stores 71 72 UK and Japan Origin U.A.IV. U.S. U.A. BRAND INFORMATION72 Export Market of the R Gro 10% U. V.S. FINANCIALS Turnover The R group has an expected annual turnover of US $ 85 million for the year 2005.S. Length of Relationship 15-20 years 15-20 years 20 years 15-20 years 15-20 years 15-20 years % of Turnover 40 20-25 20 12 7 - Graph taken from the company website.S. From an interview with the General Manager of Operations. U.A. U.S.

However. G International takes indicative orders from the buyer. has an annual production capacity of 2 million knitted garments. Design/Sampling76 The design department for G International and the entire R Group is located at Kriti Nagar (presumably at the site of its registered office). Wal-Mart usually orders the largest volume. there has been a 15-20% increase in orders. since they often don’t have established offices. Gurgaon. though they occasionally take direct orders.75 Production System The R Group uses an assembly line system. Noida. They set up a shelter (“shack”) for local tailors to do the hand embroidery. though there are fewer orders in the fall and winter. and the buyer selects and negotiates the contract. Taken from the company website. see company website. the company’s knitwear divison.000 pieces. G International does not use a recruiting agency or a labor contractor. Smaller companies are more likely to be direct orders. INFRASTRUCTURE74 The R Group has over twenty-two integrated manufacturing units in Delhi.5 APQ” quality check standard across the board. Unit Prices (paid to factory per piece of garment supplied) Avg Retail Markup Type Delivery Time 73 $6-8 USD 4 to 6 times FOB 60 or 120 days Unit Prices Since MFA Phase-out Unit prices have gone down 10-12% post-quota phase-out across the board. 75 From an interview with the General Manager of Operations. Subcontracting G International subcontracts their hand embroidery. Production Capacity The R Group’s woven division has an in-house annual production capacity of 10 million pieces. R Global. though not to an established company or to direct employees. The R Group’s leather manufacturing unit has an annual production capacity of 500. shows a sample range. or sometimes they embroider in their homes. Page 63 . unless otherwise indicated. 76 From an interview with the General Manager of Operations. Quality Control The General Manager of Operations stated they use a “2. 73 74 Including Wal-Mart. and Bangalore. For a more detailed quality control process. VI.Buying Agency or Direct Contracts are mostly negotiated through buying agencies.

They incorporate corporate social responsibility schemes into their productivity ideas. 77 After disclosing this information regarding the number of skilled workers. Departments No information on specific departments was obtained.78 The R Group has a Research and Development department for the technical aspects of garment manufacturing. the General Manager refused to give any more specific numbers of workers. operation research). Preliminary worker interviews revealed that this company was considered one of the worst factories to work for in Gurgaon. such as medical checkups. 5% female).77 Machinery R Group’s production facilities use machinery at every point in the production process including designing (CAD).79 VII. from the sampling stage (product and pattern engineering. an estimate was approximately Rs. material flow). to the pre-production stage (layout and machine engineering. with 1200 workers at this site (approximately 95% male. to the production stage (work aids. and worker welfare programs. cutting (Digitizers. scholarships for workers’ children. 79 From the company website. Productivity Schemes The company has production planning meetings in which targets are set and the workers do not participate.000. Position ~Number of workers *Machine operators 250 -A-grade skilled operator 50 -B-grade 160-170 -C-grade 30-40 There is one supervisor per every 30-40 operators. G International has a total of 7. They have incentive schemes for things like 100% attendance.Approximate number of workers in all facilities The R Group has a staff of over 10. 700 per month extra. Page 64 . 80 From an interview with the General Manager of Operations. Plotters & Automated Cutting Machines) and fabric testing (fully equipped laboratory) and fusing. time and motion studies. 78 From an interview with the General Manager of Operations.000 workers. operator training and skill analysis). WORKING CONDITIONS80 Work timings Lunch break Tea Break From 9:00 am 1:00 pm 4:00 pm to 5:30 pm 1:30 pm 4:15 pm No other working condition information was obtained from the factory.

Vijay Uppal Joint Managing Director Mr./month) 2600 2750 2344 1893 2341 Wage Setting For shop floor workers. supervisors conduct time studies evaluating the skill level and productivity of a new hire. workers receive 12% PF and 2% ESI. and 225 UV. VIII. Manicandan’s CEC report.Wages81 The wage amount excludes overtime payment. Padam Vaish General Manager of Operations Factory Managers at each Incorporated Company in the R Group HR Manager Management Staff/Accounts Personnel Production Manager Skilled Production Line Supervisor Assistant Supervisor (Less skill/experience) Skilled Tailors/Machine Operators Helpers (Unskilled) Straight-lined boxes are positions common throughout all production sites. none of which were visited by this researcher. which is made on a different date than the regular salary. HR Manager stated that wages increase after a year. Page 65 . Category (from pay slip) Tailor Sewing Operator Helper (8 months experience) Unskilled helper Helper (production) Wage (Rs. Overtime payment is Rs. workers are then offered a monthly wage based on this evaluation. 81 From G. Units visited in his report are Gurgaon Phase-1 192 UV. HUMAN RESOURCE POLICIES Management Structure Mr. which is not subject to negotiation. though they do not always receive their PF once they leave the company. Benefits According to the CEC report. while dotted-line boxed positions are factory-specific and subject to variance. After a three-day period. 151 UV. Virender Uppal Managing Director Founder/Chairman Mr. Gaurav Uppal Joint Managing Director Mr. which is reportedly not always paid. 15 per hour.

buyer codes of conduct are hurting business because they are more strict. Medical Care No information was obtained regarding on-site medical care. IX. like the labor norms in China. well. More than local labor laws. Security System No information was obtained regarding a security system. customer friendly. Workers receive a letter of contract. an interview with a G International worker in a Gurgaon plant revealed that he had never seen or heard of the employee code of conduct manual. [the R Group] is seen as a highlighted-tech. that they engage in the same kinds of recruitment. Today. Researcher: But you said you didn’t use labor contractors. eco-responsive corporate citizen that is Shaping a Better Tomorrow for everyone.” The company has a manual code of conduct that the General Manager stated is given to each employee.Worker Training The facility sometimes trains workers if the operation is difficult. According to G. Company G and the R Group does contract temporary laborers and subcontract to a labor contractor. no. No other information about the R & D department at this specific facility was given. Recruitment Policy The facility posts signs on gates. These problems are taken care of with labor contractors. Page 66 . However. Manicandan’s CEC report. Other Human Resource Policies No information was obtained regarding a formalized dismissal procedure. grievance policy. The General Manager stated that there are common policies across the plants. worker committees. we do more incentive programs and get better performance out of our existing workforce. or a union. then tests worker productivity for an hour and a half. BUSINESS BOTTLENECKS The General Manager stated that buyer requirements like double pay during overtime are holding the industry back. not anymore. interviews applicants. He stated that it should be looser. Corporate Responsibility/ Codes of Conduct The R Group touts its corporate responsibility on its website “we have been in the forefront in complying with our customers’ requirements vis-à-vis Government laws and regulations on environmental safety. So how do you overcome these issues? General Manager of Operations: Oh. Training usually takes one or two days and is done through the research and development department. Researcher: Is labor flexibility or the lack of hire-and-fire policies an issue? General Manager of Operations: No.

The work culture in the south is “different—more productive and efficient. though several follow-up interviews were scheduled. General questions about labor laws or productivity issues usually prompt details and complaints. he initially would not let it leave the building. XI. Page 67 .” The South is also usually single product. which makes productivity more difficult to increase. When asked about the number of skilled workers. Virender Uppal (the MD of the R Group) is a former Chairman of the AEPC. as it would tell them new government policies and how to best utilize the system. every one of them was canceled by the General Manager. He implied it has limited use after the quota phase-out. In general. It would be better to simply show up or not leave an option of calling before coming. He refused to schedule an interview solely with the HR Manager. who was not at the factory when the researcher visited. Although the researcher obtained a employee code of conduct handbook. Furthermore. PERSONAL EXPERIENCE The R Group was extremely difficult to both interview with and extract information. especially in regards to quotas. INDUSTRY COMMENTS The R Group is in the process of setting up a backward integration project for their knits division. The researcher was directed to the General Manager at a G International plant for an interview. They are also setting up a leather accessory factory at Gurgaon. and he was much more reserved and suspicious. he asked “why do you want to know that” and refused to give much more information past that. The General Manager stated that the AEPC was much more useful before the MFA phase-out.X. G International is working on converting to a single product system within the next two or three months (August 2006). but he answered questions in a more direct. the Northern area of India is more embroidery and hand-work intensive and is multiproduct. brief way. Because they are trying to increase productivity. and avoided any other types of follow-up including the suggestion of a phone interview.

Haryana Tel : 91-124-4004086/87/88/89/90 Fax: 95-124-4004067/85 Website: www. G. 222. Manicandan’s CEC report. I. Phase V. 870. PEARL GLOBAL LTD. the company website. From an interview with the Chief Finance Jayant Sood. and its first manufacturing facility was established in 1989. The company structure of Pearl Global is extremely unique. Gurgaon 4.5. online business publications and press releases. Udyog Vihar. business began in the 1980s. Chief Finance Officer Tel: 91-124-4308201 Production Units: 1. Phase I. Phase I. BRIEF HISTORY83 Pearl Global was incorporated in Registered Office: A-3. Rishi Vig.pearlglobal. CONTACT INFORMATION Contact People: Deepak Seth. Phase V. Gurgaon 3. The information in the following company report was obtained primarily from an interview with the Chief Finance Officer. Gurgaon 2. In 1993 it became a public limited company. Udyog Vihar. Page 68 . 446. Chairman deepaks@pearlglobal. Company Secretary Tel: 95-124-4308164 E-mail: jayants@pearlglobal. Gurgaon II. Phase-V Gurgaon – 122 016. Udyog Vihar. Community Centre Naraina Industrial Area Phase-II New Delhi – 110 028 Tel : 011-51417680-82 Corporate Office82: 446 Udyog Vihar. Udyog Vihar. and an interview with the Company Secretary.” The House of Pearl is focused 82 83 Unit visited by the researcher. as it includes all parts of the garment industry under the “House of Pearl.

etc. Page 69 . Bangladesh: low cost.S. Product Mix Areas of specialization include: India: woven cotton and value-added cotton. 86 From an interview with Chief Finance Officer. Castromen. Nex86. is establishing a U. GAP (including Banana Republic and Old Navy). he has been inducted to the Executive Committee of A. Esprit. From company website. The Chairman of Pearl Global established a fashion and design academy. as a Special Invitee.P. Wal-Mart.” Its operations in Bangladesh (NorPearl and NorPlanet) focus on more simple sourcing and manufacturing while its offices in India focus on the sourcing and manufacturing of ethnicwear (more production-intensive and complicated clothing). 84 85 See company website for list of shareholders. The House of Pearl includes designing and manufacturing units. bottoms. which together yield a combined turnover exceeding U. warehouse and distribution. He has been actively involved with the development of readymade garment industry in India. and the UK.84 Exports/Imports 100% exports. ethnicwear. Lerros. vests. shorts.) and a global network of business associates and customers.on the apparel sector with manufacturing bases in India (primarily Pearl Global Ltd. marketing units in the U. BASIC PROFILE Legal composition of the Company Public limited company. Pearl Academy of Fashion Domestic. Charming Shoppes. $200 million. stain sealed garments using goretex and acquatex.S. III.P. Liz Claiborne. NorPlanet Pearl Global has manufactured women’s. Besides having been elected to the Executive committee of the Apparel Export Promotion Council (A. skirts. Karstadt/Neckermann.E. It also has businesses in Hong Kong (NorWest) and the UK (Poetic Gem). children’s and men’s shirts.C. including blouses. Inc. suits. nightwear dresses.S. JC Pennys. Dillards. children’s. Marks and Spencer. He has successfully promoted and established the fashion apparel brand "Lerros" in Europe.. Clients Abercrombie & Fitch. Pearl Global does not manufacture for the domestic market. dresses. t-shirts. It offers full services to large retailers with the chain broken into business units that cater to different product lines. basic stuff. NorPearl.E. George (Wal-Mart). and outerwear. brand “Kool Hearts. Siplec. The company recently entered into a business and education partnership with Babson College in the U.S. H & M85. trousers.1993.) for the year 1990 .C. Kohls.

cms> and “Corporate Briefs: Pearl”90 See website for detailed financials. G-Block Bandra – Kurla Complex Bandra (E) Mumbai – 400 051 4. P.400 001.88 Net profits are 234% up.” “The company’s operating profit was Rs 17.asp>. In 2005-06 the company invested Rs 29 crore to augment its production capacities in Gurgaon and setting up a new unit in Chennai. 89 From an interview with the Company Secretary.6. Sahajanand College Panjarapole. New Trading Ring.” The Economic Times: Garments/Textiles.indiatimes.5 crore [from 120.380015 87 88 From Chairman’s Message on company website. 90 “Pearl Global net up 88%.89 Other Financials “Pearl Global posted 88 per cent year-on-year increase in net profit in 2005-06 to Rs . Bombay Stock Exchange Limited 1st Floor. The Delhi Stock Exchange Association Limited (Regional Stock Exchange) DSE House 3/1 Asaf Ali Road New Delhi .com/1060712/asp/business/story_6465123. 5th Floor Plot No. Towers.41 crore in 2004-05].9 per cent to Rs 159. Pearl announced a dividend of 30 per cent for the year [subject to shareholders’ approval]. Rotunda Building.telegraphindia. Stock Exchanges where the securities are listed: 1. 3. 29 June 2006. Page 70 . 3.87 $400 million in its worldwide operations post quota phase-out. Ahmedabad Stock Exchange Limited Kamdhenu Complex Opp.9 crore in the previous fiscal].5 crore in the previous year. Babson College press release.43 crore[ from Rs. Dalal Street Mumbai . <http://economictimes.” <http://www.C/1. Ahmedabad . J.1 crore compared with Rs 7. National Stock Exchange of India Limited Exchange Plaza.110 002 2. The revenue of the company during the year was up 31.IV. FINANCIALS Turnover $200 million worldwide before quota phase-out.

V. Page 71 . They now supply us with a variety of casual. BRAND INFORMATION91 Pearl Global’s Export Market 40% 60% U. To grow the business at this rate Pearl has had to show a "can do" attitude.S. “Dear sir. woven. To put that growth into context George Clothing at Asda has seen its market share more than double in the last 5 years to the point where it is the second largest seller of apparel in the UK on volume. we have been moving our office location over the last two weeks We have been dealing with the Pearl Group for the last 5 years. The following is a forwarded e-mail from George Clothing (Wal-Mart) regarding Pearl Global: Subject: Something you should know. Our Customer's perception This reply has come from ASDA Walmart to a query of a Sr. From an initial order in 2001. George (Wal*Mart) Kohls Dillards Marks and Spencer Esprit Liz Claiborne Nex Length of Relationship 10 years 7 years 7 years 5 years 5 years 5 years 2 years 2 years 2 years 2 years Of the top ten retailers in Asia (would not be more specific). Inc. EU and UK Major Clients Brand JC Pennys GAP (incl ON and BR) Charming Shoppes. and jersey product across all ages and genders from a variety of countries in the Far-East and Indian sub-continent.knitted. Apologies for the delay in replying.they have grown to be our second largest supplier. They are working on building strategic partnerships with between all of their vendors and suppliers and consolidating them. They have supported our growth by putting in the infra-structure to service our needs. Journalist. 91 From an interview with the Chief Finance Officer.A. the Chief Finance Officer stated that they are engaged in strategic partnerships with six of them. before the cost justified it.

Growth on this scale inevitably creates major head-aches for the supply-chain. We pride ourselves at George that our ethical standards are rigorous. no-one whether it be store customer. I honestly believe that to supply fashion retailers at the volume end is one of the most difficult businesses to be in . price. Seth and his son and that there is a trust between us and we look forward to growing together as we set out to be the best clothing brand in the world. has a right to exploit the people who make the product we sell. hence would like to have some of your observation/views/comments on the business house and your --Original Message-Dear Ms. Pearl are also helping us to achieve our ambitions to make the George brand a truly Global brand by opening an office in Canada to support the growth of the George brand in Wal-Mart Canada. and delivery have had to be a given. ASDA Wal -Mart. * For how long have you been interacting with the House of Pearl and what has been the business relationship? * As a supplier how reliable are they in terms of delivery schedule. Below are a few points which I hope you would take time off and reply to at the earliest. quality etc? * As compared to other supplier where do they stand? Please feel free to add whatever else you would like to express/say on the business house. Quality. retailer. and any issues that have arisen have been resolved immediately and taken as learnings to provide a better service going forward. Finally.quayle@wal-mart. Lancelot Joseph. it is critical for us as a business to deal in the right way. Currently I am doing a corporate feature on the House of Pearl who is your vendor. Business India” Page 72 . UK I am a journalist from India writing for India's No. Pearl have taken it upon themselves to go beyond the bare minimum requirements and when building new plant have set them up to be compliant from day one. Heather Moreton. I feel that we can have an honest conversation with Mr. 1 business publication. offering us product direct from factory or landed delivered if the situation demanded. Mr. flexibility to change our minds as to what we want right up to the last minute. For Pearl to grow their business with us. quality. As price deflation has become a way of life in the UK clothing market. Thanks and regards. Executive Editor.We want style. so Pearl have stepped in to provide solutions and support. Allan Quayle General Manager-Strategic Supplier Development George Clothing Phone 00 44 (0)1455 264409 Mobile 07779 700695 e-mail allan. Deepak Seth has also gone beyond the factory gates to work with the community and put something back. Best regards. or supplier. Senior Sourcing Manager -Kidswear. and where our distribution network has creaked under the pressure.

Subcontracting Sometimes Pearl Global subcontracts hand embroidery. INFRASTRUCTURE92 Pearl Global has five or six production facilities in India. 5% freight. They have six design factories. Quality Control Raw material including fibres. Production Capacity Pearl Global has 20 million pieces in-house capacity and 120 million pieces capacity all across Asia. VI. Sometimes designers from the UK and the U. and one in China.S. dyes and chemical are thoroughly checked before they are fed into the manufacturing process. but it mostly in-house. The embroidery tailors either come into the facilities to perform the work or they send it. shipment 50% landed 30% FOB Bangladesh: Unit Prices (paid to factory per piece of garment supplied) Range Avg Product Mix $4-12 Varies by style Mostly casual No information was obtained regarding a change in unit prices post-quota phase-out. They are working on doubling their capacity in the next 2-3 years. 90 incl. India: Unit Prices (paid to factory per piece of garment supplied) Range Average Retail Delivery Time Type India U. one in Indonesia. The House of Pearl’s research and design department prepares a collection of high fashion styles for each season. Markup (days) High of $10 $6-7 USD 3 to 4 times 60 to manufacture. Pearl Global then manufactures the style. which are shown to buyers in advance. are consulted to developed in-house patterns. Production System Pearl Global uses an assembly line system.Buying Agency or Direct They used to contract through buying agencies. Design/Sampling and Product Development Designs are mostly developed in-house. Page 73 . A few years ago the delivery/production cycle had to begin 18 months in advance. now it is 6 months. 50% FOB. but now they have developed direct relationships with their long-term business partners. yarns. two of which are in Bangladesh. The House of Pearl has over 150 factories across Asia. Pearl Global uses labor contractors. who then chooses or modifies the styles. one in Chennai and the others in Gurgaon. Every stage of the production line has its 92 From an interview with the Chief Finance Officer.S.

tensile strength. Phase V. Udyog Vihar. which is sourced from outside is tested for fibre fitness micron ( fibre diameter). count strength product (CSP). Udyog Vihar. fibre bundle strength. Manicandan’s CEC report (and confirmed by the Chief Finance Officer). twist per inch. Udyog Vihar. Page 74 . viscose tops and special fibre). and if they have a low level or no absenteeism they also get an incentive. If a worker stays for six months they get incentives. but did not give specific numbers. Gurgaon 2500-3000 workers 446. Production Unit Number of Workers93 138. Sretch yarn. 93 Numbers for the units at 446 and 870 were estimated by the Chief Finance Officer while the other numbers were obtained from G. uster percentage and impurity. Polyster viscose and cotton yarn is tested for count. Phase I. Udyog Vihar. ply yarn. Departments The researcher was not able to obtain information regarding the specific nature of the assembly line or tour the factory. Approximate number of workers in all facilities Pearl Global has approximately 6000 workers in India. WORKING CONDITIONS Wages and Benefits The Chief Finance Officer stated that sometimes Pearl Global pays workers above the minimum wage. drape and fastness to light washing and rubbing and slippage. pilling. Gurgaon 500-600 workers 222. Gurgaon 600 workers 870. The finished yarn is tested for residual shrinkage. Phase V. After workers receive their monthly salary they see a “rise in absenteeism. They are thinking of switching to a piece-rate system instead of a monthly salary because “with the current labor laws” you cannot take disciplinary action for low levels of productivity. single ply yarn is also checked on the uster machine to ensure consistency in yarn quality confirming to norms of the uster statistics. as neither an HR manager nor a production manager was available for interview. VII. Productivity Schemes Pearl Global gives out “best worker awards” and “gold stars” for productivity.own set of detailed monitoring system. CRA. etc.” as workers do not have a long-term commitment to the factory. Every set of fibre (polyester. novelty yarns. moisture regain percentage and finish percentage. Phase I. Gurgaon 2000-3000 workers Machinery Pearl Global has an estimated 2000 machines for every part of the production process. fibre composition percentage (blend %).

who must first pass a hand-eye coordination test and then spend twenty days on the training line. The union is not effective in addressing the problems of the workers. Worker Training There is a training line for new workers. & Co. 96 From an interview with the Chief Finance Officer.” but there are not enough “available. Dismissal Procedure. Manicandan’s CEC report. All but temporary workers are covered by social security schemes. though sometimes workers work double shifts and are paid double. ESI and PF. The labor turnover in Chennai. Recruitment Policy Pearl Global uses labor contractors and specifically stated they use R.” However they are working on providing the necessary infrastructure (such as transportation) so they would be able to hire more women workers. Out of 500-600 workers only about 90 are in the union. although being a “permanent” employee will entitle a worker to an identity card. They want to hire more women like Southern facilities do because women workers are “more efficient. and Sukumar Pride. They contract temporary workers through R. VIII. For their HR strategies. There is no sexual harassment 94 According to G. 3000 per month Every year workers receive Rs. 4000 per month Rs. Union and Worker Committees98 There is no job security. but if it is mixed employees then it becomes a problem with issues of sexual harassment. They did not have a HR manager before this. who are not entitled for ESI and PF. Manicandan’s CEC report. Overtime95 The facility at 222 UV has two shifts and thus there is little overtime. 95 Page 75 . and Indonesia is lower. they used a mix of outside agencies and consultants. HUMAN RESOURCE POLICIES97 A new HR manager is to be hired as of August 15.K. 2006.Position Finishing supervisor (7 months experience) Tailor (8 years experience) Tailor (5 years experience) Wages94 Rs. Bangladesh. Furthermore if “it was all women it would be fine. Manicandan’s CEC report. 3500 per month Rs.” and it is not convenient as Pearl Global would have to provide transportation. According to G. if there are no orders or “no work” employees are told not to come. 97 From an interview with the Chief Finance Officer. Labor Turnover96 The labor turnover in Gurgaon is about 20%. There is a union in the facility at 138 UV. & Company. 98 According to G. 100 more and a 20% bonus for divali. and the head of the union is not an employee at the facility. K.

e. and teams are set up to work on weak areas in working conditions. they have set up a medical treatment facility in the spirit of social responsibility. The company also operates a school by the name of 'Little Pearls' in Delhi. a fashion design and manufacturing technology institute. The company has set up Pearl Academy of Fashion. as mentioned previously there is a new HR manager slated to begin on August 15. Pearl Global just hired a lawyer to help analyze and plan financial structure. According to the Chief Finance Officer. Corporate Responsibility/ Codes of Conduct According to the Chief Finance Officer. as there is different management at each facility. implying that the AEPC is not as useful post-quota. Employees. Page 76 . Vendors and the Society-at-Large. “ethnicwear” or design. there are sexual harassment committees. Sustainability and Profitability of revenues year after year.committee. The Company has built-up very effective TEAM WORK…The primary purpose of Corporate Leadership is to create wealth legally and ethically. X. Working on having uniform HR and productivity strategies. 2006. which holds it back. Investors. Source the best from the World to deliver the best to the world by following ETHICAL MANUFACTURING AND TRADE PRACTICES. From an interview with the Chief Finance Officer. The motto of every Corporate Body is to ensure Predictability. i. which have monthly meetings. The AEPC helped a lot before the quota phase-out in terms interpreting and figuring out best way to capitalize on existing structures and business law. They want to integrate all offices with an ERP 99 100 From an interview with the Chief Finance Officer.” IX. This translates to bringing a high level of satisfaction to five constituencies Customers. The House of Pearl has enough infrastructure to double turnover. The strength of South India is its efficiency. Seasonality is an issue. Labor cost is still competitive (in terms of the world market). Pearl Global has a very effective HRD system they have build an empire highly trained and skilled manpower ready to face the dynamic changes. The unit at 222 UV does not have a union. The Chairman Pearl Global espouses corporate responsibility ideals on its website (Chairman’s Message. BUSINESS BOTTLENECKS99 The industry is regulated by the supply of cotton. Deepak Seth): “A future that shall be built with the same strategy that has shaped our past. so they are working on capitalizing upon the existing capacities. etc) helps immensely. which is missing in the North but the value-added garments (embroidered. INDUSTRY COMMENTS100 Commented on the strengths of the North. orders are fewer in July and August.

who constantly review the institute's performance to ensure that the programmes are practical and industry-oriented. Managing Director. London College of Fashion. Deepak Seth. Lalit Gulati. Mr. The Advisory Board of the Academy consists of leading exporters.htm Advisory board includes: Mr. in India and abroad.” The Economic Times: Garments/Textiles.16 equity shares of the company for every share in City Estates was recommended by the board at the meeting. Partner.”101 Pearl Academy of Design Education-Pearl Academy of Fashion http://www. It provides training programs in the areas of Fashion Design. <http://economictimes.system. the Netherlands' Hogeschool van Amsterdam. like in “Pearl Global to merge two companies. They just initiated a subjectivity productivity software analysis system which would analyze the difficulty of manufacturing particular items and adjust productivity goals accordingly (so workers are not “punished” for lower productivity levels if the style is more difficult and it is not their fault).pearlacademy. It has a validation agreement with the UK's Nottingham Trent University (NTU). Bolton University. one of the top two in this field in the world. It has links with acknowledged international leaders in fashion education. According to The Economic Times: “Leading apparel group Pearl Global Ltd has decided to merge Pearl Styles Ltd and City Estates Pvt Ltd with itself…A swap ratio of 30. and Germany's LDT Nagold. 7 Feb 2006. Hong Kong Polytechnic University. at Naraina. Chairman. R & Company. and London Centre for Fashion Studies. and is located in the Okhla Industrial Area (Phase II) of New Delhi. The House of Pearl is planning to get into retailing and is working on an industrial engineering department and setting up software SAM.Virender Uppal. 101 Page 77 . Modelama Exports The Pearl Academy of Fashion was set up in 1993 by Pearl Global Ltd. Mr. such as the UK's Chelsea College of Art & Design. As a result of the close interaction between the industry and the institute. industrialists and academicians.cms>.indiatimes. its alumni hold responsible positions in more than 300 leading organisations. whereas no equity share of the company would be issued in lieu of shares of Pearl Styles as it’s a subsidiary of Pearl Global…The amalgamation scheme has got approval from the boards of City Estates and Pearl Styles as well. Production and Computer Aided Design…The Academy has opened its second campus in New Pearl Global. The company is setting up new facilities in Dhaka (Bangladesh) and a design center at Chennai. Retailing.

have signed a strategic collaboration on a full range of activities to promote world class research and education of entrepreneurship in India. USA and Pearl Global Ltd. internship facilitation. Richa & Co. requirements.’s premier business school). Michael Fetters.. Page 78 . The collaboration is designed to expand over the next seven years. Chairman of Pearl Global and Dr. Bhupatkar. This trust is in the initial stages of developing a new. has set up a business partnership with Babson College in Boston (U. Advises Pearl Global. India. India last week for the official signing ceremony with Deepak Seth. joint information sharing. The Asia Institute at Babson. among others. * An overview of the entrepreneurship curriculum. Shoppers' Stop and Ebony. links to websites. Research in India Babson College. Vivek Jain. Babson faculty will provide workshops for Pearl faculty and staffing. learning.S. on New Business School: Two Form Strategic Collaboration to Promote Entrepreneurship Education. The Pearl School for Business Studies will grant Bachelor of Business Administration and/or Masters of Business Administration degrees with a focus on entrepreneurship. USA. Babson’s Provost. RMX Joss. was also present. and stipulations of the local region in India. distance participation in projects. Both institutions will identify mutual exchange opportunities—on-line access to library resources. Robert Eng.” 102 Partnership with Babson College Pearl Global Ltd. Orient Craft. Pearl Global Ltd. and will visit regularly to monitor teaching. and assessment standards. Sonal Garments. processes. advisor to Pearl Global’s education trust. * Student report on the student admissions process and co-curricular activities. and procedures necessary to build an Entrepreneurial foundation and curriculum. Current plans are for first classes to be admitted in the fall of 2008. Babson’s consulting reports will include: * The general curriculum for undergraduate and graduate programs. The Babson college press release: Babson College. private business management institution at two campuses near New Delhi. Pearl will shape this information into a comprehensive Entrepreneurship curriculum to meet the particular conditions. * Faculty report including Babson faculty profiles and approaches to faculty development. Pearl Global Ltd. Babson College in Wellesley. President of Babson’s Alumni Club in India and Chairman of DCW Ltd.Benetton. workshops. Mafatlal. Executive Director... Bombay Dyeing. Ponds (India). India. Mass. traveled to Delhi.—ranked #1 worldwide in Entrepreneurship Education---will advise Pearl on the strategies.. and Professor Ash Rao will present the final reports to Pearl.—a $400 million company exporting garments to Europe and North America—has formed a non-profit educational trust. 102 From the website of Pearl Academy of Fashion.

” 26 Oct 2005. is understood to have chalked up a plan for its presence in domestic retailing. 103 Babson Newsroom Release. It was difficult to obtain an interview by calling the numbers on the website. an interview was promptly arranged with the Chief Finance though the researcher was not able to obtain a copy without signing a confidentiality agreement. For information. a company that shares our vision to advance Entrepreneurship knowledge in India. however after e-mailing the Chairman. Chandigarh and Lucknow.103 Domestic and International Retailing In addition to the U.. the company is in the process of booking retail outlet spaces in cities across northern region . Mass. 104 “Pearl Global bullish on Q2 numbers. Gurgaon.“This collaboration is an important step in Babson’s journey to globalize Entrepreneurship Education.” Babson College in Wellesley. “According to industry sources. which is setting up a joint venture manufacturing facility for soft fabrics in China to secure part of its Babson Executive Education offers executive development programs to experienced managers worldwide.”104 XI.W. visit www. 24 April 2006.babson. growth prospect remaining high. <http://sify. Page 79 .S. the recent fall in price makes it an attractive long-term bet. “We are privileged to work with Pearl Global.” said Fetters. “According to market analysts.cfm>. Kool Hearts label. Pearl Global is getting into domestic retailing: “ [Pearl Global]. The interview consisted of a powerpoint presentation on the structure and capacities of Pearl Global. Ltd.such as Jaipur. is recognized internationally as a leader in entrepreneurial management education. Olin Graduate School of Business at Babson College. Babson grants BS degrees through its innovative undergraduate program. < and grants MBA and custom MS and MBA degrees through the F. Deepak Seth.php?id=13972072>.babson. The Company Secretary was not useful in arranging interviews with other personnel who would be able to answer what he could not. PERSONAL EXPERIENCE The interview with the Company Secretary was useful only in determining what reports are required to be submitted to the Registrar of Companies by each company.

mobile: 9871496362 Corporate Office: Orient House F-8 Okhla Industrial Area. but it does not contain any information beyond the heading: Orient Craft Limited: Embroidery. Manicandan’s CEC report. Page 80 . I. 2341110 2.” E-mail: orient@orientcraft. Khansa Road Sector 37. Phase-1 New Delhi. Phase IV. online business and economic articles. Founder/Chairman Personal secretary Meghna.000 shirts made in India. CONTACT INFORMATION Contact Person: Sudhir Dhingra. Gurgaon. An ISO 9001-2000 Unit: “Orient Craft Embroidery Division. From an interview with the Managing Director. most of the information is from the interview. but the company was not incorporated until has no website. BRIEF HISTORY106 Business began in 1972. so he could use the proceeds as seed capital. Haryana 4. a company profile given to the researcher by the Managing Director. Udyog Vihar. Gurgaon II. the largest computer embroidery facility in the Indian subcontinent. Gurgaon-122015. 15000 ($300) from his father. Udyog Vihar. 14-A Maruti Industrial Complex Sector-18 Udyog Vihar.6. who asked Dhingra to get 1. 68. 110020 (India) Tel: (+91-11) 26818247. There is a preliminary website set up for its embroidery division at http://www. Managing Production Units: 1. ORIENT CRAFT LTD. Dhingra was a law graduate from Chandigarh with no experience. found some tailors to make the shirts. G. and 105 106 First two units visited by the researcher. 2343262 Fax: (+91-124) 2342042. Dhingra borrowed Rs. Government Recognized Golden Trading House The information in the following company report was obtained primarily from an interview with the Managing Director on 1 August 2006. He had a friend from London who was buying from importers and selling the goods to specialty shops. Haryana Tel: (+91-124) 5090800. and preliminary interviews from Gurgaon workers. 26818249 Website: Orient Craft Ltd. 7-D Maruti Industrial Complex Sector-18 Udyog Vihar. Haryana105 3. 13. Plot No. Gurgaon. Unless otherwise indicated.

Then. Dhingra states that others followed Orient Craft’s example. and set up a manufacturing plant in the late 1970s with a assistance of a government program that give 150% of exports sales as incentives to burgeoning enterprises. 6000 ~ $133). and that plant is still there. he also encountered some buyers. only now it is 136.000 sq.A. During the first few years. ASSOCHAM. found another buyer. the Indian-inspired fad went away and he had to spend six to seven months traveling to get rid of inventory stock. When his friend repaid him the Rs. National Institute of Fashion Technology. not like today. May then consolidated supply chain into one roof. when he got back to India. with 1800 people. he obtained a factory processing site of 240 sq. Both were wholesalers who sold to specialty stores. he decided to break into the industry. CIAE. When he returned. with 3500 people. though he stated that it was difficult to actually get the money from the government. and others. CMAI. yards and outsourced actual manufacturing. Then after a few years. Dhingra “is also Executive Member of the Advisory Committee of AEPC and an active member of reputed associations such as FICCI. Orient got clients by word-of-mouth from their L. with more than 350 modernized factories. <http://www. During his traveling. During this traveling.000 pieces and an annual turnover of around $40-50. He “knew [he] had to look at the industry from a global perspective and globally what textile buyers needed and what the competition was from the suppliers. set up a pressing line on the dining table and the production line in the garage. Orient’s first factory was established in a village in Hauz Marg and it is still there.000 sq ft. Then while in Germany. Dhingra wanted to improve the standards of quality and infrastructure to globally competitive standards. And being a tailor is like being a janitor. as Gurgaon is the single largest manufacturing sector in India. 200-300 people.”107 Biography for Sudhir Dhingra for the International Fashion Technology Forum.shipped them to London. not just in the limited Indian context. they’re not looked up to. The first plant in Maruti Industrail complex was the first plant in India that was over 80. and restarted business with a trial order of 1200 pieces for a customer in L. “At the time. ft. Liz Claiborne sent an American technician to help Orient with worker training and modernization. In the 1990s Dhingra set up a bigger plant with 100 machines. 15000 plus a small portion of the profit (Rs.000. CII.” His father gave him one year to start up business.A. The first Gurgaon plant was established in 1993.htm>. and he rented a house. 107 Page 81 . he was able to observe fashion trends and the kind of things that were selling.niftindia. and Germany buyers. Orient subcontracted until the early 80s.” Dhingra wanted to move production out of the village and industrialize the area and put as many skills in-house as possible. he hired more people. he estimated a production capacity of about 150. they’re looked down upon. you had to be a tailor to be in the garment industry. In the mid 1980s.

ropers. Macy’s. Marc Jacob. sportswear. Up until 10 years ago. men’s shirts. Dhingra states that Orient is the only factory in India to manufacture for Marc Jacobs and Louis Vuitton. Mr. Calvin Klein Jeans. kidswear. Sudhir Dhingra (Chairman and Managing Director). outerwear. However. and gave 20% to his nephew and 20% to his friend. Next Retail Ltd. Zara. Limited. LizSports). The company also has a specialized home furnishing division that sources soft furnishing products such as pillow and duvet covers to brands such as William Sonoma. pants. Exports/Imports 100% exports.III. Owners/Directors Mr. was set up in 1978 and has been India’s number one garment manufacturer and exporter and is the recipient of the ‘Gold Trophy’ given by the government of India for highest global exports out of the country for 1977. 2000. because of “language and cultural differences” with the European business partners. women’s. Mr. Liz Claiborne (LizDresses. ELM Street. LizWear. and jeans). Tommy Hilfiger (men’s. Loft. and 2002. Awards Additional information: Orient Craft Ltd. dresses. Product Mix Areas of specialization include blouses. Kohli. Oasis Stores. shorts. Dhingra was the sole proprietor. Marks & Spencer. BASIC PROFILE Legal composition of the Company Orient Craft is a privately owned company but deemed public limited. Donna Karen. knitted shirts/t-shirts. J-Crew. Orient used to source for Wal-Mart in back in 2003 but has since stopped. Orient Craft Ltd. 2001. 1998. J. K. Now he owns 60% of the shares. Dillards Stores. boys’. coordinates. Anoop Thatai EOU Information The company has three 100% export oriented units (which can import all raw materials and trims free of duty). jackets. Page 82 . Abercrombie & Fitch. Clients Armani Exchange. The company does not do that much business with Zara and Miss Sixty (Italy). Polo Jeans). Lands End. Dockers. and Marks & Spencer.K.Hook.. skirts.G. is looking into breaking into the domestic market. Old Navy (women’s). Express. Ann Taylor. Susan Bristol. Jones of New York. Esprit. Rocawear. Ralph Lauren (Lauren. Diane von Furstenberg. GAP (kids). Banana Republic.

00-6.A. now it is Rs.5-99 million 19.IV. BRAND INFORMATION Orient Craft's Export Market 5% 15% U.02-0. <http://news. 742 crores) Other Financials Last years profit was $8 million (40 crores).02 V.8 million so they can only be thought of as a rough approximation.8-24. 2 March 2005.12 0.8-24. Page 83 .” BBC News. despite more competitive pricing. Europe 80% Canada 108 Basu. “Winners and losers in textile shake-up.stm>. which has doubled in a year and a half-as mentioned by NITRA president-used to be Rs.03 0. 109 These figures were estimated by the Managing Director in the space of 5 minutes. FINANCIALS Turnover FOB USD $105 million for 2002-2003 FOB USD $118 million for 2004-2005108 FOB USD $165 million for 2005-2006 (Rs.50 $1. Kaushik. 4 per unit. 9 per unit) 113 Dhingra stated that Orient usually ends up with half of the target profit.20-1.00 $1. 112 Overhead (mostly energy.00 % Retail Price111 0.8 million 19.5 million % of Sales 50-60 12-15 12-15 10 Per Garment110 $ Breakdown of Sales Revenue109 Est USD 2006 Material Cost Labor Overhead112 Profit (target)113 82.50 $1. 110 Based on the company’s average unit price of $10 USD. 111 Average retail markup is five to six times the unit price of the garment.S.03 0.

but they just opened an office last year. depending on the quota category and how much they were previously restricted. Marks & Spencer is currently direct.stm>. 115 Restarted business with Macy’s 2 years ago. Unit Prices (paid to factory per piece of garment supplied) Average116 Retail Markup Avg Retail Price Type $10 USD 5 to 6 times $50 All FOB Unit Prices Since MFA Phase-out There has been an estimated decrease in unit prices of 10-15% across the board in most categories. however used to source to them about 10 years ago. Orient tends to deal in higher quality and higher unit prices and lower volumes.50 USD (from US companies. European companies pay higher unit prices). There has also been an expansion of volumes and an estimated 15-17% growth in orders.Major Clients Brand Diane von Furstenberg114 Macy’s Marc Jacob Marks & Spencer Ann Taylor Loft Ralph Lauren Express The Limited Dillards Tommy Hilfiger GAP Liz Claiborne Length of Relationship 1 and a half years 2 years115 4 years 4 years 4-5 years 4-5 years 4-5 years 6 years 6 years 8 years 8-9 years 12 years 15-16 years Turnover $17-18 million - Buying Agency or Direct Most companies are represented by an agent and very few are direct. “Winners and losers in textile Limited used to be mostly direct. Orient would not take a Wal-Mart” BBC News. 116 According to Dhingra. 114 Dhingra stated that Orient manufactures 80-90% of what Diane von Furstenburg (high-end maternity clothes) sources from India. 2 March 2005. Dhingra stated that Orient’s average unit price is $10. <http://news. Page 84 . the industry-wide average unit price in India is $3. Some things have increased greatly. however. like cotton pants. but they will open up their own office soon. they made one skirt for Polo Blue that will retail at $1199 (did not state unit price). There has not been a huge shift in the composition of customers. however an article written for the BBC in 2005 (Basu. Orient was manufacturing skirts that would be sold for $4 USD per piece.) stated that on the date of the author’s visit in 2005. Kaushik. Dhingra states that it is easier to deal with buying offices.

as traveling became restricted and Indian companies needed to build a competitive advantage. ft.000sq. ft. 119 According to the company profile. Design/Sampling Orient has ramped up its design department in the past five to seven years using mostly in-house skills with some help from U. the company had only 17 production facilities spread over 600. INFRASTRUCTURE Company has 21 production facilities. 117 118 Plot No. It picks up fashion from around the globe. even a little bit before. Production System Orient Craft uses an assembly line system. <http://www. Sector 37.000 sq. product development became the key thing that most Western companies were looking for. 121 According to an interview with the Managing Director.121 The average order size is 10-12. Orient has a display store in NY on Park Avenue that it opened up 3 yrs in and around Delhi.niftindia.200.”118 Subcontracting Orient does not appear to subcontract. but other fabric from silk. The second plant visited was 380.000 woven per month.000 sq. after 9/11. and one large plant is located in Noida.000 pieces. May 2006. gives feedback. six in Gurgaon.000 woven per month. of which four are in Delhi.000 pieces and production capacity has grown at least 25% over the past year. In 2003 Orient established a manufacturing complex of 340.htm>.000 knitted per month 2005-2006: 720. 1.VI. companies. Production Capacity 2002-2003: 480. and creates new designs for each season.S. Haryana. which was at the time the “single largest multi-product manufacturing plant in the whole of India. Gurgaon. Orient has created a niche with their diversified product line (mostly cotton/knits or wovens. chiffon to denims and outerwear). Orient has put a lot of human resources into product development and now boasts 900 product development personnel at 5 different locations. sometimes 25-45. 13. As Dhingra stated.000 or even 100. 720. Orient also deals in some very small volume orders for high-end buyers like Oil Lily.000 pieces. (unclear if it is the same facility visited) at the cost of over $10 million USD.117 Previously.000 per day120 2006: In an average day. ft. Page 85 . According to the company profile. in 2003. though it does use labor contractors. National Institute of Fashion Technology. and employed 5000 people. whose samples are then sent to potential buyers. Udyog Vihar. 120 Biography for Sudhir Dhingra for the International Fashion Technology Forum. Orient makes 130. Khansa Road.000 knitted per month119 2006: More than 125.

Approximate number of workers in all facilities Number of people employed in 2002-2003: 12. MP and some from Haryana. According to Dhingra the “girls” in the South are operators and less skilled.000 Machinery Orient has in-house computerized embroidery machines. who manufactures 80-90% jackets/ outerwear. with very little embellishment. and since Orient produces high-end clothing with lots of embellishments. workers do not go to lunch at the same time. not through a labor contractor. the company had 7300 sewing machines. VII. In 2002-2003. Departments No information on specific departments was obtained through the interview.Quality Control The company has in-house lab testing for garments.” From 9:30 am 11:00 am 12:30 pm 4:00 pm to 6:30 pm 11:15 am 2:00 pm 4:30 pm Work timings Tea Break Lunch break (30 min)122 Tea Break 122 The line does not stop during lunch. fabrics. which is generally equal in size to the production department. they “can’t be like Golkadas.000 in-house Number of people employed in 2006: 23. Manicandan’s CEC report and could vary factory to factory. shirts. Page 86 . According to G. Bihar. Productivity Schemes Orient uses incentive schemes to reduce absenteeism and has implemented worker welfare schemes. washing plants and dry cleaning units. one facility’s production department. consisted of 12 production managers each in charge of about 250 workers (tailors and helpers) at 100 machines with 12 line supervisors. the workers are skilled and come from a tailoring background and are usually from UP. More contract workers and women (especially thread-cutting) are in the finishing department. “most of the permanent employees are supervisors and perform high-end work such as production in-charge and finishing in-charge. The labs are equipped to test for all parameters including color fastness to light. trousers. Information on work timings was taken from G. and trims. Manicandan’s CEC report. However according to G.” Dhingra stated that 70% of Orient’s workforce is direct employment. WORKING CONDITIONS The workers are 80% male and since Delhi and Orient is mostly multiproduct. Manicandan’s CEC report.

K. 3000 per month for an unskilled worker salary. Union Though unions were not explicitly mentioned in the interview. and Vasisht & Company. the salaries average Rs. probably around 8-9% and as Orient is expanding./month) 2850 2344 2000 2850 Labor Turnover According to Dhingra. and most people are above the minimum wage. Dr. Dhingra stated that in the 1980s and 1990s Orient used a piece-rate system. Category Tailors Helper Trainees Contract Worker Average Wage (Rs. VIII. no piecerate. HUMAN RESOURCE POLICIES Dhingra stated that there are common HR policies and productivity schemes across plants. but he makes no mention of any other incentives. who takes a 5% commission before paying the rest to the worker. 5-8. the company's chairman and managing director Sudhir Dhingra dreaded the idea of setting up huge factories . The payscale is adjusted twice a year according to inflation. With incentive programs for more highly skilled workers. Some of these contractos are R.all for the fear of Page 87 . The payments and benefits for contract employees are given to the contractor. 60-70% of the workers are unskilled helpers. However. “particularly [those] working in the Finishing department. & Company. semi-skilled and unskilled workers that are hired through labor contractors are paid under a piece-rate system. Sartrushi. workers are paid much less than Dhingra asserts. Viet Kumar & Company. according to G. Worker Training Dhingra stated that all the facilities have training schools and they want to make them more formalized.” Furthermore. the following was mentioned in a business article: “Till a year ago. They are trying to start a training school NGO with a founding member of NIFT.000 per month plus ESI and PF. the turnover for Orient Craft is fairly low. where workers can be trained and work for other companies if they choose to. labor turnover is decreasing. and in 1993-1994 they started moving away from piece-rate and a few years ago they did away with piece-rate completely. Manicandan’s CEC report. Bonuses are given during Divali.Wages The average wage starts at Rs. Recruitment Policy Orient Craft employs contract workers for at least 30% of its workforce.

Some of our workers are second-generation workers. M. Manicandan’s CEC report. Global players are looking for India bases. ten years ago we had 5000 people. But the management suppressed and ousted all the workers who [were] involved in the establishment of a Trade Union. One woman told me. “if someone asked me what my one single reason for success.000. workers are fired with no redress. it’s about what we can do for the community. This strategy effectively stops any attempt to consolidate workers towards creating a Trade Union. and if a manager finds a worker guilty of an infraction. According to G. sometimes more than their husbands. he also mentioned customers were concerned that if hand embroidery was subcontracted rather than done in-house that it would not meet quality compliance standards. ‘my husband doesn’t beat me anymore. Punishments are given to workers without any formalized’s not just about the bottom line. they feel very proud to bring in income. Manicandan’s CEC report.businessworldindia. Since then the company started sourcing their manpower from labour contractor[s].” Worker Committees/Grievance Policy/Dismissal Procedure Dhingra was reluctant to give specific information regarding worker committees in person. “around five years ago there was an attempt to establish a trade union (at the 7-D. 400 per month.000 building a community welfare center that provides medical care for community members. Maruti Industrial Complex unit). Orient also helped train 300 women from the nearby village in hand embroidery at international standards. and Surendar. no sexual harassment committees and workers are not involved in wage negotiations or target setting. T. Corporate Responsibility Dhingra stated that Orient has a fund to help workers who need to take a day off if they are sick or have to attend a wedding. <http://www. Page 88 . Clusters are reinventing themselves. now we have 23. Twenty years ago we had over 1000 workers. I have always been very people-centric-. Sector-18. The “village panchayat said that Muslim women can’t go out…but now that they are trained. Orient had no worker committees at the facility visited. it would be people. Although Dhingra stressed how this was all for the benefit of the women and the community. But will we be ready in time?” Businessworld. GAP gave Orient $35. Thirty years ago we employed a women who worked as a thread-cutter and got paid Rs.’” They built a four story structure to house the embroidery tailors. Now she is a finishing manager and gets 123 Rajshekar. no formalized dismissal procedure. There is no grievance policy procedure in place for complains against workers or management. stating that he would forward the company’s code of conduct and a list of their worker committees through his personal secretary. However upon further inquiry. he stated that such information was confidential and would hurt Orient’s competitive According to Dhingra.asp>. “Preparing for 2005: Dressing up for the party.000 and Orient spent $20.[worker] strikes.”123 According to G. and that Orient pays in full for the schooling of female children of workers and for 65% of the schooling of male children.

Dhingra wants increased flexibilization otherwise it is more difficult to expand and it hurts business. but Orient has taken up some holiday decoration work.000 people. “India is still not good at producing fall fabrics. IX. Although happy about Orient’s success. highly tailored outfits with additional embellishments like embroidery and special washes.” They started up home furnishing about three and a half years ago. Seasonality is an issue. comfort.000 per month. White Co. which eases strain some as well as the other diversification of profits. According to the company website: The new complex is designed to create a very worker and management friendly environment in terms of esthetics.. in an endeavor to go beyond compliance we have adopted the village next door as one of the community welfare programs under which we are helping the local community build a primary school as well as a garment sewing and embroidery unit. Labor flexibility is also an issue. and her son is working here… I have always thought about social welfare. and Orient needs to do competitive pricing to stay in the game and Page 89 . Pottery Barn. This facility is completely air-conditioned and dust-proof to facilitate higher efficiency levels during summer months as well as better quality of sewing and finishing for some of the higher end apparels. in-house fully functional gym and an Executive Club. It is the soul of our company. We have created great recreational areas for workers and middle management by building great cafeterias. They started producing denim products 5-6 years ago and just started manufacturing men’s suits at a plant for Liz Claiborne and Express.paid Rs. Dhingra stated there are companies who do $1 billion (mentioned China and Lian Thai from Hong Kong. Donna Karan. Specifically. as Orient usually doesn’t have as many orders May through August. Marks & Spencers. “they have 100. for Bed Bath and Beyond. BUSINESS BOTTLENECKS Productivity is relatively low. since Orient Craft products tend to be high-fashion. and ease of working. 50. which includes a more complex manufacturing process.000). Besides being compliant by the current standards. he wants to extend the length of time it takes to become a permanent employee to 12 months. such as home furnishing. Macy’s.” His words are interesting when you consider that Orient uses labor contractors and didn’t build up any of the community welfare projects until external forces like GAP pressured them. we only have 23. Home furnishings is still smallish industry and comprises about $15-17 million of Orient’s sales.

indiatimes. The company has since then stripped the Spain unit of its machinery and fitted them in its plant here at Gurgaon. Mr Dhingra estimates the annual turnover to be in the excess of Rs 800 crore. India. INDUSTRY COMMENTS Orient recently bought a Levi’s plant in Spain for its technology.000 crore. “Indian textile companies on acquisition spree. and aims to increase it to over 40 lakh units after the expansion. Since the quota system has been reimposed on China. as they need to grow the base of buyers and price is a compelling reason to do that. At present.htm>. buyers are getting increasingly quality conscious. Noida and Okhla in Delhi. Kumar. Ironically it is the same Indian companies who are buying the units for their machines. Orient came up on the global radar when it started its first overseas facility in New York two years ago. X. 16 September 2005. it is important to have machinery comparing to global standards. near Gurgaon…Levi’s was looking for a buyer due to high maintenance and labour costs in Spain.124 The machinery from the newly acquired plant will form part of the company’s expansion plan at Manesar. The company expects the expansion plans to boost its revenue generation. The company’s management is also planning to raise an IPO later this year. However. The expansion plan envisages setting up of two new facilities at Manesar.5%. India is in an advantageous position. And retribution has come in the form of dying sick units in EU which are suffering as a result of lower labour costs in China.” said Mr Dhingra.curpg-1. In the changed business scenario. “Garment exporter Orient Craft buys Levi’s plant in Spain for Rs 60 India’s lack of worldclass machinery producers domestically has seen a lot of companies look to the West for help. the textile industry in India still has a long way to go before it can catch up with Chinese volumes.bring in buyers. Page 90 .125 124 Dipankar. The company’s deal with Levi’s is the second such significant international venture.” Industrial Economist: Textiles Report. World over.00. PTI Economic Service. Earlier. (despite quota regulations) and India adds to a minuscule 1. growing by over onefourth from last year. <http://www.” Times News Network. As of now. From business articles: The company… acquired a Levis unit in Spain in mid 2005 for Rs 60 crore (approximately 13. Bangladesh and Pakistan. 125 Jha. <http://economictimes.indeconomist. Orient Craft manufactures and exports about 30 lakh units of garment every month.3 million dollar)…Orient Craft by its own admission acquired the unit because of its superior machinery content. “The lifting of quota has brought humongous demands on one side and on the other. Orient has 20 production units spread across Mayur Shekhar.cms>. the garment industry presently stands at approximately Rs 15. of which China contributes one-sixth.

if there is a mall…Real estate is growing. Chairman and Managing Director of the company. a leading Japanese buying house. told ET. which is a joint venture of Caramin (France) and Bairb McNutt (Ireland. However. SBC is the buying arm of Kashiama. according to Sudhir Dhingra. SBC. told reporters on the sidelines of the CII conference on `Textiles forum . we ourselves are looking at buying 2-3 lakh pieces from India. lagging behind US and Europe. <http://www. which plans to source $1-1. 126 “Orient Craft plans SEZ for garment units in AP. Yoshiaki Kamiyama.” Italian and French mills are setting up joint ventures in India.” The Hindu Business Line Internet Edition. the ready-to-wear demand in India is growing. In 2-3 years. Financial Daily from THE HINDU group of publications." Mr Sudhir Dhingra. “The tie up with SBC will give us a good foot hold in the Japanese market.Emerging opportunities and the road ahead' here on Thursday. retail will explode…People say that Indians don’t have disposable income. the Andhra Pradesh Chief Minister. there were only three shopping malls. “Three years ago. Banswala Mills. consultant.000 crore. In the next couple of years. He announced the company would be given 10 acres of land at Nacharam to set up a garment manufacturing unit. Dr Y. and every day a new one is opening up—there’s space available in Karol Bagh. where there are higher labor costs. Why would people go through rain.S. "The SEZ will house up to 50 companies.” For Orient Craft.” he said. if even 5% are rich and 15% have disposable income. That’s more than the people who spend in the U. but look how large the population is—out of one billion. So the spending power is in India. 25 November 2005. As per the arrangement.S.S.126 Orient Craft… has entered into an outsourcing arrangement with Sumukin Bussan (SBC).5m worth of textile products in the next couple of population spend. only about 60-70 million have disposable income. From business articles: Orient Craft Ltd plans to develop an exclusive special economic zone (SEZ) for garment units in Andhra Pradesh. Earlier.— only about 30% of the U. etc. probably about 80-90% still get clothes from tailors. said the company was "welcome" to set up the SEZ. that’s 200 million people. we aim at scaling our Japanese business up to $30-40m. The SEZ is likely to come up on a 300-acre plot with an estimated investment of Rs 2. The deal is likely to be signed later this month. Orient Craft will be the exclusive suppliers from India to SBC. but best linens) are setting up facilities in India and selling back in Europe. Orient is considering getting into the domestic market now. DKNY and Ralph Lauren. heat. Rajasekhara Reddy. Now there are 500. at present Japan is a relatively smaller market.Though most people in India. the exclusive Japan licensee of some well known international textile brands including Calvin Klein. “An increasing number of Japanese buyers are looking at Indian export houses for their sourcing requirements. the company’s MD. Page 91 . the market will contribute a significant share of Orient Craft’s overall business pie.blonnet. dirt.htm>. delivering the inaugural address.

and smart use of technology. PERSONAL EXPERIENCE Orient Craft does not have a website.cms>. and Surendar. Page 92 . The turnovers of these exporters range from Rs 100 crore to Rs 250 crore. claiming more than three-fourth of the pie. the company may go for a specific capacity expansion. Till a year ago. Times News Network. a share of the Japanese market isn’t an isolated case and the textile industry in India has a long way to go before it can catch up with Chinese volumes. His personal secretary was not useful in obtaining any information. skill-intensive manufacturing could be a way to compete. Bangladesh churns out as many garments as India from a fifth as many 10 times the size of the Delhi-based Orient Craft. at Rs 450 crore of revenues.” The Economic Times: Garments Textiles. Others include Gokaldas Exports of Bangalore. Orient Craft manufactures and exports about 30 lakh units of garment every month.128 XI. India's biggest exporter Orient Craft has also begun to realise that. But will we be ready in time?” Businessworld.Depending on the volume of the orders. “Preparing for 2005: Dressing up for the party. But what distinguishes them is a relatively larger scale. is India's largest garments exporter. <http://www. Clearly. and Shahi Exports. India lags in technology. 128 Rajshekar.000 people. which it may have to take up to over 40 lakh units. The centrally air-conditioned facility will combine all the stages of garment manufacturing.127 The biggest Chinese firms have a turnover of $800 million-1. which.businessworldindia. T. productivity and scale. Most are family-run. China is the largest exporter to Japan. Thailand does almost the same business as India with a workforce a third the size. Dhingra was fairly open in his responses. though he stated that she would be able to forward company codes of conduct and additional information that could not be covered in the interview. M. At present the Indian textile exports to Japan add up to $296m which is just about 1% of the country’s total textile imports. Clusters are reinventing themselves. 20 April 2006. to cater to new deals in the pipeline.all for the fear of strikes. Current contact information was finally obtained through a Professor at NIFT. However. we will have to invest in new capacity every year if we have to keep pace with the Today he is spending Rs 40 crore on a new factory in Gurgaon that would employ 2.200 million .asp>. Like most other economies. Global players are looking for India bases. and Dhingra was surprisingly available for an interview. probably because most of the specific questions about workers and working conditions were asked after he was giving his views on the industry and general strategies for expansion. the company's chairman and managing director Sudhir Dhingra dreaded the idea of setting up huge factories .indiatimes. design to finishing. which made finding up to date contact information difficult." Orient Craft and Fabric & Fibres are among a few who have been pulling ahead of the pack. Says Orient Craft's executive director Anoop Dhanda: "For the next few years. Meru Exports and Richa Exports of Delhi. <http://economictimes. 127 “Orient Craft ties up with Japanese co.

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