FIRST TIER GARMENT EXPORTERS IN DELHI

:
INDUSTRY AND COMPANY PERSPECTIVES

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

March 2007

TABLE OF CONTENTS

PAGE NUMBER

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.
VI.

VII. VIII. IX. X. XI.

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.
III.

IV.

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

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V. VI. VII. VIII. IX. X. XI.

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

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 although some were out of date. 3) To develop corporate research strategies specific to the Delhi..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

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

where. Name. CMT. DSP questions. as there are some questions that an HR manager would know more than a Merchandising Agent. I’ve heard of collegiate licensing that would provide steady orders from major brands at higher prices. total sales. The survey questions were divided into sections according to the position of the respondent. Designation. U. package. discount retailers (Wal-Mart).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. help design. sourcing. deliver? Does the company ever have problems with contracts and/or steady orders? (if possible. 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 . 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. EU? Major foreign brands that the company supplies to: length of relationship.S. vol of product. 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. get order. since a conversational approach proved to yield the most information. if only a higher level manager could be reached. What kind of input— CMT. no input--or more capable. Ownership of Company. However.. they often had information regarding each of these areas. The questionnaire was used only as a guide in the interviews as a reminder of what kind of information was needed. 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. specialty (GAP).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. how fast company delivers products to brand Kinds of buyers—importers.

overhead. finishers. what is displayed to workers on details of employment. 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. average age of employees. cutters. checkers. pressmen. tailors (skilled. etc. Have there been any attempts at unionization in the past? What is the company’s attitude toward unionization? Page 6 . Shopfloor Committee. semi skilled. men. Sexual Harassment Committee. total value of exports. codes of conduct. unskilled). subcontracting.e. trainees. Quality Circle? If yes. labor cost. what do these forums do? Get any documents willing to give at any point. who are the members and how are cases handled? Give details. Have you seen a benefit in productivity since implementation of program? Are there joint worker-manager forums in your organization? If yes. 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. 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. material cost. 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. washers. Grievance Committee. Productivity Committee. helpers. 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.Have they used outside agencies in developing any part of their strategies? Part of AEPC. How many women. etc. NITRA. supervisors. standing orders.

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?

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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 http://www.apparelresources.com http://www.ittimes.co.kr/ The Economic Times http://economictimes.indiatimes.com/ http://www.sify.com http://www.businessworldindia.com/ http://www.indeconomist.com/ The Hindu Business Line Internet Edition, Financial Daily http://www.blonnet.com/ 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 http://www.3isite.com/index.htm. 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 (www.cmai.info, cmai@hathway.com), 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.

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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.

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relating to the companies registered with them. which is not true for privately owned companies. New Delhi 110003 Phone: 011-24362708 Fax: 011-24364570 E-Mail: rocdel.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.sb@sb.nic. Lodhi Road. According to an interview with the Company Secretary of Pearl Global Ltd. REGISTRAR OF COMPANIES (ROC) The Registrar of Companies is a division of the Indian government’s Ministry of Textiles. CGO Complex. the address of the registered office and the locations of the business. the profit and loss are also publicly available. Since Pearl Global is a public limited company.htm : Delhi & Haryana Regional Director: Dr.gov website to access the public disclosure documents).sb@sb. Form 32. These offices function as registry of records.gov.The financials publicly available include the annual return and balance (for all companies). Form 18. Page 10 . the office at Nehru Stadium closed down earlier in the year. New Delhi – 110003 E-Mail: rocjln.nic. in order for a company to be registered with the ROC. the compliance of companies act. they must submit several forms at incorporation and annually. Navrang Saini Addresses: B-Block Paryavaran Bhawan.. which are available for inspection by members of public on payment of the prescribed fee. Form 29 for Pearl Global makes it a public limited company.mca.CHAPTER TWO AGENCY PROFILES 1. The Central Government exercises administrative control over these offices through the respective Regional Directors. Form 20 gets the Director a Director’s Identification number (the number used on the mca. Such forms include: Form 1. Website of the Ministry of Company Affairs: http://www.in Nehru Stadium.in However. Companies are required to register new events such as a change of directors with the ROC. The addresses of each state’s ROC as of 2003 can be found at http://dca.nic. the details of the board of directors/management structure.in/ROC_2003.

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

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

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

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

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

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

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

rajeshbheda@niftindia. 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. leading to upgradation of skills and knowledge. professionals. Extn:306 Fax: 91-11-26851198 Mobile: 9810154829 E-mail: rajeshbheda@gmail. They offer a learning environment that encourages innovation. which have been developed in consultation with reputed academicians [sic] and industry practitioners. Gandhinagar (Sub-Centre: Surat). (Gauri Kumar. The Institute has pioneered the evolution of fashion business education across the country through a network of seven centres at New Delhi. Department of Fashion Technology Telephone: 26850484. also offers short duration part time courses under Continuing Education (CE). management practices and manufacturing technologies.niftindia. Extn:306 Contact Person: Professor Rajesh Bheda. Hyderabad. and entry-level candidates in the form of Continued Education Programmes. Kolkata and Mumbai.com/iftf. 26965059. Bangalore. Chairperson. 26964771. NATIONAL INSTITUTE OF FASHION TECHNOLOGY (NIFT) Ministry of Textiles. Government of India Website: http://www. 26965080. enhancement of critical abilities. NIFT has crafted a range of Continuing Education Programmes. According to its CE (Continuing Education) Prospectus 2006-07: NIFT provides quality fashion-education to industry experts. Continuing Education (CE) Programmes: National Institute of Fashion Technology.htm Address: NIFT Campus. NIFT is acknowledged as the premier institute of fashion design. These programmes reflect the requirements and Page 18 . Director General of NIFT) The Institute: Today. PhD. 26965080. New Delhi-110 016. and diverse faculty expertise. Resource Centres. In addition to classroom learning. Hauz Khas Near Gulmohar Park. practitioners. creativity. besides conducting regular professional undergraduate and postgraduate programmes in Design. advancement of careers. management and technology across the globe. 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. India Telephone: 26850484. 26965059. 26964771. and the evolution of new professionals.4. and excellence. and avail of facilities like laboratories with state-of-the-art equipment. 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. The centres are professionally managed platforms of the world’s finest design expertise.com NIFT was set up under the Ministry of Textiles in 1986. Chennai.. Management and Technology.com. these courses offer a unique opportunity to participate in the lively academic environment of NIFT.

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

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

According to NITRA’s 2006 Prospectus: NITRA’s Multifarious Activities *Job oriented professional courses (full-time and distance learning) in textile.org/ Contact person: Dr. waters.5. Energy Conservation. Techno-economic Viability Study. NORTHERN INDIA TEXTILE RESEARCH ASSOCIATION (NITRA) NITRA. 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). Rao. 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 . Machine Design & Development. *Quality Evaluation of textiles. Environmental Audit. Product Diversification. dyes. *Research and Development projects and industry specific surveys related to textile & garment industry.S. workshops. Pollution Control. Sector-23. Raj Nagar. seminars. *Customized consultancy packages for national and international clients in the areas of Product Development. effluents. Several prestigious textile units and multinationals are already within its consultancy network. *HRD activities through training programs. ISO-14000 Environment Management System. garment. J. Publications. Process House Study. environment and allied areas. *Need based cost effective software development. chemicals. Chairman of NITRA. and Seminars/ Conferences/ Training programs…NITRA has carved a niche and occupied leadership in Package Design Consultancy for effluent treatment and water recovery. Manpower Planning. leather. Design of Effluent Treatment Plants and Water Recovery Plants. *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). ISO-9000 Quality Management System. Quality Improvement. Energy Audit. Maintenance Audit and a lot more. conferences and publications. Cost Reduction. P. and plastics. V. Ghaziabad (UP) 201 002 Website: http://nitratextile. It is the only ISO 9001:2000 accredited textile research organization in India. 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. Maintenance Management.

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

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

An ISO 9001:2000 certified company The information in the following company report was obtained from interviews with the Director.com. 7 & 8. and G. the company website. Mobile: 9810015693 Corporate Office2 Plot No.com Head Office Delhi B-57. Sector-5. Haryana. ICRIER financial data. CONTACT INFORMATION1 Contact Person Lovleen Kumar. India Tel: 91-124-2290993. phase -1 New Delhi -110020. 2291131 Fax: 91-124-2290864 Website: www. Udyog Vihar Phase -1 Gurgaon. Merchandising Agent. business articles. Manesar IMT Gurgaon -122016. and updated telephone numbers from interview. Manicandan’s CEC Report. MODELAMA EXPORTS LTD.CHAPTER THREE COMPANY PROFILES 1. I.modelamaexports. India Tel: +91-124-2397838-42 fax: +91-124-2397843 1 Initial information obtained from company website. documents given by the HR and production managers including a company profile. India Tel: +91-11-26810103 fax: +91-11-26817969 Head Office Gurgaon 184. Page 24 .com E-mail: info@modelamaexport. 2 Unit visited by the researcher. Okhla Industrial Area. Human Resources manager. Haryana. Director E-mail: lovleen@modelamaexports.

Sector-4 Gurgaon 5. Other production sites in untranslated Hindi document. In 1999. B-26.000 square feet. Okhla Industrial Area. In the first year they exported Rs. Lalit Gulati.asp?msg=2710&cod=newsindetail&nam=>. Okhla Industrial Area. Vinita. Modelama places a great emphasis on technology as the secret to its success. B-33. 6 From company website. Modelama today has ten professionally run production units over 4. B-80. 201.5 III. 204.Road Map 3 Production Units4 1. Plot No.000 square feet. <http://apparelresources. B-57. BRIEF HISTORY Modelama was founded in 1979 by Mr. From company website. Okhla Industrial Area. Okhla Industrial Area. Phase 1 Gurgaon 3. 200. “Build Quality Rather Than Check The Quality. Modelama professionalized its management structure and has been consistently upgrading technology in their production facilities. Manesar. Gurgaon1 6. interview. 45 lakhs with 50 indigenous sewing machines and a workspace of 4. phase -1 10. and Pandey. 4 3 Page 25 . phase -1 New Delhi 7. Udyog Vihar Phase -1 II. owner is Mr. Plot No-5. 184. IMT Manesar. BASIC PROFILE6 Legal Composition Sole proprietorship. Phase 1 Gurgaon 4. Phase 1 Gurgaon 2. phase -1 New Delhi 8.00.” Apparel Resources.com/defaultnextone. Sector-5. 7 & 8. phase -1 New Delhi 9. 5 From website. Lalit Gulati as a family-run operation.

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

3cr. 7 ICRIER Data (based on an interview at B-57 Okhla Industrial Area plant in Fall 2005) Page 27 . VA per employee Rs. 2800/per month. 500 500 450 60% 40% 150.000 per year 25. of pieces exported to the US No. FINANCIALS Turnover 70 Turnover (millions USD) 60 60 50 40 30 20 10 0 1981 1985 1990 1995 2000 2002 2005 projected 15 0. 3000/per month 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. No. 500 Rs. Rs. 500 Total employment 500 500 Production workers 450 450 Proportion exported directly --Proportion exported indirectly through intermediaries Misc.000 30% Rs.IV.5cr. 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.

S. “GAP is sourcing worth about $1 billion from India and we are doing more than $10 million with them.” Apparel Resources. 9 8 Page 28 . 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.com/defaultnextone. Europe Others 94% Major Clients Brand Federated Stores (Macy’s) Target Stores GAP (incl.asp?msg=2710&cod=newsin detail&nam=>. Average Unit Prices (per piece of garment supplied) Unit Price Origin Product Mix $5-7 USD U.” Lalit Gulati. which includes not only the factory unit price but the duty cost (AMC and freight).V. An example given was if the retail price of a given garment manufactured for Target is $9. ~$2.99. the unit prices are markedly lower than specialty stores.S. “Build Quality Rather Than Check The Quality. 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. <http://apparelresources. Of that remaining $3. Vinita. Modelama Chairman.75 goes to Modelama. 10 Nearly all brands are FOB with the exception of discount retailers like Target Stores (USA).A. The remaining $3. quoted in 9 Pandey. 60% of that is Target’s profit margin per unit (PMU). Although they get large production volumes from discount retailers.99 is the landed cost.99.

”14 11 12 According to interview with the Director. 14 Makhijani. add a bit. “My team of designers scans international trends and comes up with a tentative collection of not only designs but also shades. V. We then sit down with the stores. they were manufacturing garment orders for Charming Shoppes Inc. is one of the principal designers.co. “Indian Fashion Firms Adopt Global Pret and Couture.1 1981 0. Some of the orders can be pretty huge . Page 29 .000 pieces. fine-tune the patterns.asp?em=M&mcode=200602&idx=1083>.80. an alumnus of the National Institute of Fashion Technology (NIFT).13 Gayatri Lal.Unit Prices Since MFA Phase-out Unit prices have gone down an estimated 7-10% due to increased global competition. Marks and Spencer (Style and Co. INFRASTRUCTURE Subcontracting Modelama does not appear to subcontract. Typically. Modelama will present their company profile to the buying agencies of MNCs.ittimes.. The day the researcher observed the process. 13 From interview with Director and Senior Merchandising Officer. Vishnu. and delivery times.” <http://www.4 1985 0. for instance. and get down to manufacturing. volume. who will then contact them with a development package if their profile fits their needs.kr/en/node.5 0. Production Capacity12 9 8 7 6 5 4 3 2 1 0 Number of Garments Produced (milions) 8 4 2.7 1 1990 1995 2000 2002 2005 projected Design/Sampling Modelama has a fairly large design department.11 Production System Uses an assembly line system. which varies according to the product.) as well as home furnishing products. subtract a bit. Then there is some back and forth communication between Modelama and the MNC to reach an agreement in terms of product design. From company website and brochure.

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

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

HUMAN RESOURCE POLICIES19 There does not appear to be common policies across the plants. After a three-day period. “It should be time-and-a-half. supervisors conduct time studies evaluating the skill level and productivity of a new hire. Page 32 . like China. Overtime Management indicated no more than four hours per week per worker. Indicated that there are a few shop floor employees who have remained the two years the factory has been in operation. workers are then offered a monthly wage based on this evaluation. 19 Information based on interview with HR Manager and documents given by HR Manager and production manager. Benefits HR Manager indicated that workers receive the social benefits required by law. HR Manager stated that wages increase after a year. including ESI and PF. except for worker recruitment for middle management positions. which is not subject to negotiation.” Labor Turnover Estimated worker turnover per month at 7-10%. and that workers receive double wages for overtime hours. stating. VIII. Expressed dissatisfaction with labor laws requiring double overtime.+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.

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

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

the former Director stated: Lalit: We do not consider machines as individual equipment but as a complete workstation.” a more developed system of subcontracting modeled on Southeast Asian business strategies. low relative levels of productivity. Modelama successfully invested in the necessary infrastructure to export ~Rs. relative strength of the Indian rupee to the dollar opposed to weaker Asian currencies. “Build Quality Rather Than Check The Quality. 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.” Apparel Resources. We do not need masters. <http://apparelresources. and government bureaucratic hurdles regarding labor law.with these measures. BUSINESS BOTTLENECKS Main problems hindering financial success according to the Director are poor relative infrastructure. A business strategy that Modelama is looking into is “triangular shipping. the Chairman stated that though the South is better known for it. The Director mentioned that seasonality is an issue. 22 Pandey. and Sanjay Gulati. In an interview with Apparel Resources magazine. the Chairman. Lalit Gulati. only their department is kept open and the rest of the factory is shut down at 6 pm. 25 crore in jackets alone.22 X. Modelama would then shift the actual manufacture of the product to either countries with lower labor costs like Sri Lanka or duty-free countries. IX. it would appear that seasonality should be less of an issue for them than other companies who do not manufacture winter clothing.asp?msg=2710&cod=newsin detail&nam=>. Vinita. If Modelama has had as much success in outerwear as they have stated in press releases. and then ship the product from that country. Page 35 . we need operators who can be trained.com/defaultnextone. Lalit: Machines change according to the product requirement…We have to be flexible because the buyer doesn't buy one thing all the time.perator. whose upper management and design departments would remain in India. If workers stay for overtime. 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. 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. MNCs would present their contract orders to Modelama as an Indian company. 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. 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. In 2002. however. The HR Manager. stated that seasonality was not an issue and that they have orders year-round.

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. PERSONAL EXPERIENCE Modelama used an Italian consulting agency for the design of two of their factories. Page 36 . Modelama was the first company to be interviewed by the researcher. but directed the researcher to her colleague. when they began to develop the infrastructure to manufacture outerwear. XI. The only question that management would not answer was regarding a detailed financial breakdown of the company. The unit visited is the site of their corporate offices and was built two years ago with the help of industrial engineers. Modelama was very open in disclosing information about the factory unit. This is likely the factory to which buyers are taken. then was directed to a Senior Merchandising agent. The high level of attention paid to infrastructure and personnel management is probably not typical of their older factories. who was not available on the date of the interview.

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

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

Did not obtain average retail markup information. though generally it is four to seven times the unit price of the garment.25 $0.11 $0. 2. so they can only be thought of as a rough approximation.65 Material Cost Labor Trims and Packing Depreciation Machinery upkeep Overhead Embellishments32 Profit 27 Estimated by General Manager of Marketing.nsf/pub/Fashion_News_05_02_en2_ Webb.Awards Wal-Mart International Supplier of the Year 2000 (can’t read others) IV.78-$1. 32 Embellishment costs such as embroidery depends on style.pdf>. 28 Fashion Newsletter.8 million 2. 31 Based on the company’s average unit price of $6. 2005 <www. No.lawson.07 $0.com/www/resource. so figures cannot be considered accurate.8 million 14-28 million 1.8 million 7-14 million 14 million % of Sales 50% 12-17% 10-20% 1% 2% 2% 5-10% 10% target Per Unit Price31 $3.65-$1.033-$0. accessed July 2006.5 USD. Percent of sales is based on an average estimate given by the Divisional Manager of Marketing.30 $0.13 $0. 29 Estimated by General Manager of Marketing. Turnover estimates varied by tens of millions of dollars between the GM and the Divisional Manager of Marketing. It can be none or most of the unit price. Page 39 .8-23.4 million 2.13 $0. FINANCIALS Turnover $140 million 2005-200627 $120 million 2004-200528 $90 million 2003-200429 Other Financials Breakdown of Sales Revenue30 Est USD 2006 70 million 16. 30 These figures were estimated by the Divisional Manager of Marketing in the space of 5-10 minutes.pdf/$FILE/Fashion_News_05_02_en2_Webb.65 $0.

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

84%

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.
33

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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,

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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
35

~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.

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

37 The researcher toured the factory around 5 pm. Manicandan’s CEC report. This early shift seemed to be entirely female.38 Wages As Estimated by Divisional Manager of Marketing39: Category Average Wage (Rs.000 Supervisors/Mid Mgmt 10. Page 44 . Manicandan’s CEC report says a supervisor with eight years experience makes Rs./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. 40 G. and another fifteen-minute tea break between lunch and the end of their shift. Benefits of the incentive scheme include a 10% increase in productivity in past two years in the sewing department. leaving male sewing operators and some female ones. 38 According to G. these benefits are additional. 4200. 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. the workers at this unit do not get a tea break. Workers use their ID card to clock in and out of the factory.00040 Minimum wage is posted as follows: Category Wage (Rs. 39 Stated that these numbers do not include ESI and PF. and a decrease of waste in the cutting department. lower labor turnover. The workers get a fifteen-minute tea break between the start of work and their half-hour lunch break. when the first shift of workers were getting off./month) Unskilled helper 2200 Semi-skilled operator 3600 Skilled operator 6.have recently gone through major changes in their implementation. However. there was still a strong female presence in the factory. VII. an increase in attendance.

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

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

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

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

H. of which five are in Gurgaon. 20. E-mail: jyotiapparels@vsnl.com Production Units Magsons Exports. 45~$1) and are not adjusted for inflation. 41/42 Phase IV Udyog Vihar. which roughly doubled each year until 1984. Gurgaon49 The researcher was not able to obtain the addresses of all nine factory sites. 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. 000 ($11. 51 Information on company background from Managing Director. The company’s turnover was Rs. Unit visited by the researcher. who had contacts in the garment and textile industry. II. Page 49 . 500.K. HR strategies and production from Assistant Production Manager. south of Gurgaon). two are in Manesar (southwest of Delhi. BRIEF HISTORY Company established in 1976 by Mr. but by networking through his brother. a company profile and Standard Operating Procedures given by the Managing Director.000 ($444 USD50).com Manish Mall Assistant Production Manager Mobile: 9899096999 Registered Office48 D-42 Okhla Industrial Area.111 USD) in the first year. and an interview with an Assistant Production manager. 26818977. The company has increased sales an estimated 30-40% in the past year. He had no experience.3.L. L. 26810804 (D) Fax: +91-11-26819684. Magu. shop floor observations by the researcher. he started business in 1977 with an investment of Rs. and remaining information is from observations unless otherwise noted. 26817910 Website: Jyoti Apparels does not have a website. Managing Director Senior Vice-Chairman of the AEPC (Apparel Export Promotion Council) Mobile: 9810029999 E-mail: hklmagu@jyotiapparels. 51 48 49 Unit visited by the researcher. 110020 (India) Tel: +91-11-26816917. due to the quota phase-out. CONTACT INFORMATION Contact People H. and two are in Okhla Industrial Area (New Delhi). 50 Conversions are based on today’s exchange rate (Rs. K. I. Magu and deceased brother. Phase-I New Delhi.

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

Japan.6 million 10 $0. 56 Average retail markup is four ($20) to six ($30) times the unit price of the garment. excluding the $12 million USD figure from the company profile.6 million 10 $0. which accounts for the inconsistencies. on average.50 1. etc. Malaysia) Europe 53 Financials. Page 51 .6 million 10 $0.50 1. 700. so they can only be thought of as a rough approximation.A. duty.6-2. 57 Since Jyoti’s unit prices are mostly FOB. 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 9.5% Other Manufacturing 1. retain 75-84% of the sale of a retail item.000. 10% 50% 40% Others (Canada. this figure includes the amount the MNC spends on shipping.6-2. FINANCIALS Turnover 12 million USD (either 2003 or 2004) Current year 18 million USD Other Financials Current year sales Rs.IV.3 million 60 $3 10-15% Labor 1.6 million 10 $0. 55 Based on the company’s average unit price of $5 USD. BRAND INFORMATION Jyoti's Export Market % of Sales U.5% Subcontracting Cost 1.000 (15.6-2.5% Overhead and profit 1. costs. Latin America.50 1.6-2.50 1.S.57 V. and cannot be used as an indicator of profit. 54 These figures were estimated by the Managing Director in the space of 5-10 minutes.5% MNC’s that source from Jyoti.

and two are 600 square meters. but later stated that overall they have remained stable. which is not a production facility). he stated that unit prices have decreased about 10%. but they do subcontract their fabric sourcing and processing.000 square meters. and Gloria Vanderbilt through buying agencies. VI.58 Production System 58 See Standard Operating Procedures for detailed subcontracting information. Overall. four are 1. Subcontracting has not changed since quota phase-out. the company has about 20.000 square meters. It is notable that Jyoti subcontracts to a Shahi processing facility. primarily through the Triburg buying agency. Did not mention any direct relationships. Two of the factories are 2.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. Subcontracting Jyoti does not subcontract the production process. American Eagle. one is 8. Page 52 . Prices and other sourcing details are negotiated through the buying agencies. 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.000 square meters.000 square feet of land spread over ten different areas (including the registered office. INFRASTRUCTURE Company has nine production facilities.

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

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

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

merchant/buyer (for style). Benefits Production manager indicated that workers receive ESI and PF.Step 1—Care label. Labor Turnover Estimated worker turnover per month at 20%. Page 56 . workers are offered a wage based on this evaluation. The tailors and some finishing employees receive wages on a daily basis. VII.000-90.O. Wise Tag check with care. If workers exceed this by 1 lakh. 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. extra button. However. there is an incentive scheme that depends on monthly shippings. and cutting supervisor who set the production lines and targets based on manual time-studies. which is not subject to negotiation. then the factory will give incentives. according to the Assistant Production Manager.000 pieces per month. while the rest of the employees receive a monthly salary. 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. After one day period. The production unit visited usually produces 80. First the Assistant Production Manager stated that they do not perform time studies. Wage Setting Procedure For shop floor workers. Then he stated that they conduct production planning meetings with the factory manager. finishing supervisor. supervisors conduct time studies evaluating the skill level and productivity of a new hire. rather they calculate targets manually by hourly production rate. it is all left to selfdiscipline. and gave a copy of the minimum wage scheme for Haryana. security tag Four operators Step 2—Initial Pressing One supervisor Step 3—P. production manager.

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

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

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

Page 60 . Mayapuri Industrial Area. aluminum hardware.4. including: 1. Udyog Vihar. incorporated R and Co. and G.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. I. 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. Udyog Vihar. Udyog Vihar. Udyog Vihar. 208. G International was established in 1983 in Delhi and 1996 in Gurgaon. 25172438 Fax: +91-11-25451549. Gurgaon 2. including: 1. 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. 192. Gurgaon 7. Manicandan’s CEC report. 506. CONTACT INFORMATION65 Registered Office: 2/2. in 1977. Phase-I. 236. BRIEF HISTORY68 Vijay Uppal.110015 (India) Tel: +91-11-25431408. Gurgaon 4. Gurgaon 3. Udyog Vihar. Phase III. the current Chairman. Udyog Vihar. black iron. Gurgaon 5. Phase I. Phase I. 25172437. Phase IV. B-108. Phase III. 133. Phase I. 69 From an interview with the General Manager of Operations. New Delhi . Gurgaon. General Manager of Operations 236 Udyog Vihar Phase-I. 25454895 Contact person: Padam Vaish. Noida. Phase III. Gurgaon 8. 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. 151. New Delhi 2. and ironmongery. Gurgaon. 479. Phase I. Udyog Vihar. 68 According to the company website. Gurgaon67 6. with one woven garments manufacturing unit in Delhi. II. 225. Phase-I Gurgaon The company profiled has over ten manufacturing units. Udyog Vihar. 67 Unit visited by the researcher. and Bangalore. 66 According to company website. Ware Housing Scheme Kriti Nagar. an interview with a General Manager of Operations. Udyog Vihar. 239.

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

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

75 Production System The R Group uses an assembly line system. G International takes indicative orders from the buyer. 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). VI. see company website. Taken from the company website. Smaller companies are more likely to be direct orders. and Bangalore. The R Group’s leather manufacturing unit has an annual production capacity of 500. INFRASTRUCTURE74 The R Group has over twenty-two integrated manufacturing units in Delhi. Subcontracting G International subcontracts their hand embroidery. 73 74 Including Wal-Mart. since they often don’t have established offices. R Global. They set up a shelter (“shack”) for local tailors to do the hand embroidery. shows a sample range. Production Capacity The R Group’s woven division has an in-house annual production capacity of 10 million pieces. and the buyer selects and negotiates the contract. G International does not use a recruiting agency or a labor contractor.5 APQ” quality check standard across the board. Quality Control The General Manager of Operations stated they use a “2. or sometimes they embroider in their homes. the company’s knitwear divison. unless otherwise indicated. Wal-Mart usually orders the largest volume. though not to an established company or to direct employees. Noida. Page 63 . 75 From an interview with the General Manager of Operations. Gurgaon.Buying Agency or Direct Contracts are mostly negotiated through buying agencies. 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. though there are fewer orders in the fall and winter. 76 From an interview with the General Manager of Operations.000 pieces. For a more detailed quality control process. has an annual production capacity of 2 million knitted garments. there has been a 15-20% increase in orders. However. though they occasionally take direct orders.

and worker welfare programs. 79 From the company website. 5% female). the General Manager refused to give any more specific numbers of workers. Plotters & Automated Cutting Machines) and fabric testing (fully equipped laboratory) and fusing. time and motion studies.78 The R Group has a Research and Development department for the technical aspects of garment manufacturing. scholarships for workers’ children. 700 per month extra. Departments No information on specific departments was obtained. Preliminary worker interviews revealed that this company was considered one of the worst factories to work for in Gurgaon.Approximate number of workers in all facilities The R Group has a staff of over 10.77 Machinery R Group’s production facilities use machinery at every point in the production process including designing (CAD). an estimate was approximately Rs. 80 From an interview with the General Manager of Operations. 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.000 workers. such as medical checkups. operator training and skill analysis). with 1200 workers at this site (approximately 95% male. 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.000. to the production stage (work aids. operation research). They incorporate corporate social responsibility schemes into their productivity ideas. 77 After disclosing this information regarding the number of skilled workers. G International has a total of 7. Page 64 . material flow).79 VII. from the sampling stage (product and pattern engineering. Productivity Schemes The company has production planning meetings in which targets are set and the workers do not participate. cutting (Digitizers. 78 From an interview with the General Manager of Operations. They have incentive schemes for things like 100% attendance. to the pre-production stage (layout and machine engineering.

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

grievance policy. customer friendly. The General Manager stated that there are common policies across the plants. No other information about the R & D department at this specific facility was given. So how do you overcome these issues? General Manager of Operations: Oh. Workers receive a letter of contract. IX. we do more incentive programs and get better performance out of our existing workforce. then tests worker productivity for an hour and a half. Manicandan’s CEC report. eco-responsive corporate citizen that is Shaping a Better Tomorrow for everyone. Today. Medical Care No information was obtained regarding on-site medical care. Page 66 . However. [the R Group] is seen as a highlighted-tech. well. no. 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. BUSINESS BOTTLENECKS The General Manager stated that buyer requirements like double pay during overtime are holding the industry back. worker committees.Worker Training The facility sometimes trains workers if the operation is difficult. Company G and the R Group does contract temporary laborers and subcontract to a labor contractor. not anymore. These problems are taken care of with labor contractors. According to G. buyer codes of conduct are hurting business because they are more strict. interviews applicants. Researcher: Is labor flexibility or the lack of hire-and-fire policies an issue? General Manager of Operations: No. He stated that it should be looser.” The company has a manual code of conduct that the General Manager stated is given to each employee. More than local labor laws. Training usually takes one or two days and is done through the research and development department. like the labor norms in China. Other Human Resource Policies No information was obtained regarding a formalized dismissal procedure. 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. Security System No information was obtained regarding a security system. Researcher: But you said you didn’t use labor contractors. Recruitment Policy The facility posts signs on gates. or a union. that they engage in the same kinds of recruitment.

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

Company Secretary Tel: 95-124-4308164 E-mail: jayants@pearlglobal. Chief Finance Officer Tel: 91-124-4308201 rishiv@pearlglobal. I. Phase-V Gurgaon – 122 016. Phase I.5. 870.com Jayant Sood. In 1993 it became a public limited company. and an interview with the Company Secretary. business began in the 1980s. BRIEF HISTORY83 Pearl Global was incorporated in 1979. Haryana Tel : 91-124-4004086/87/88/89/90 Fax: 95-124-4004067/85 Website: www. Udyog Vihar. The information in the following company report was obtained primarily from an interview with the Chief Finance Officer. Udyog Vihar. G. Phase V. Chairman deepaks@pearlglobal.com Production Units: 1. 446. Gurgaon 4.pearlglobal. 222. The company structure of Pearl Global is extremely unique. Udyog Vihar. Udyog Vihar. Community Centre Naraina Industrial Area Phase-II New Delhi – 110 028 Tel : 011-51417680-82 Corporate Office82: 446 Udyog Vihar.” The House of Pearl is focused 82 83 Unit visited by the researcher.com Registered Office: A-3. and its first manufacturing facility was established in 1989. Gurgaon II. online business publications and press releases. From an interview with the Chief Finance Officer. Phase V. Gurgaon 2. Phase I. as it includes all parts of the garment industry under the “House of Pearl. 138.com Rishi Vig. the company website. CONTACT INFORMATION Contact People: Deepak Seth. Gurgaon 3. Manicandan’s CEC report. Page 68 . PEARL GLOBAL LTD.

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

com/articleshow/1690384. Rotunda Building.com/1060712/asp/business/story_6465123. 3. Ahmedabad .”90 See website for detailed financials. 5th Floor Plot No.” The Economic Times: Garments/Textiles.IV.89 Other Financials “Pearl Global posted 88 per cent year-on-year increase in net profit in 2005-06 to Rs . 89 From an interview with the Company Secretary. Towers.” “The company’s operating profit was Rs 17. Page 70 . 3.C/1. Dalal Street Mumbai .asp>.indiatimes.9 crore in the previous fiscal]. 29 June 2006.43 crore[ from Rs.5 crore [from 120. Babson College press release.380015 87 88 From Chairman’s Message on company website.5 crore in the previous year.9 per cent to Rs 159. Pearl announced a dividend of 30 per cent for the year [subject to shareholders’ approval]. Bombay Stock Exchange Limited 1st Floor. National Stock Exchange of India Limited Exchange Plaza. 90 “Pearl Global net up 88%.400 001. The revenue of the company during the year was up 31. In 2005-06 the company invested Rs 29 crore to augment its production capacities in Gurgaon and setting up a new unit in Chennai. Stock Exchanges where the securities are listed: 1.telegraphindia. <http://economictimes.87 $400 million in its worldwide operations post quota phase-out. FINANCIALS Turnover $200 million worldwide before quota phase-out.41 crore in 2004-05]. Ahmedabad Stock Exchange Limited Kamdhenu Complex Opp. P. Sahajanand College Panjarapole.6. New Trading Ring.cms> and “Corporate Briefs: Pearl Global. G-Block Bandra – Kurla Complex Bandra (E) Mumbai – 400 051 4. The Delhi Stock Exchange Association Limited (Regional Stock Exchange) DSE House 3/1 Asaf Ali Road New Delhi .88 Net profits are 234% up.110 002 2. J.” <http://www.1 crore compared with Rs 7.

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).V. They have supported our growth by putting in the infra-structure to service our needs. EU and UK Major Clients Brand JC Pennys GAP (incl ON and BR) Charming Shoppes. Apologies for the delay in replying.S. BRAND INFORMATION91 Pearl Global’s Export Market 40% 60% U. the Chief Finance Officer stated that they are engaged in strategic partnerships with six of them. Journalist. They now supply us with a variety of casual. and jersey product across all ages and genders from a variety of countries in the Far-East and Indian sub-continent. To grow the business at this rate Pearl has had to show a "can do" attitude. Inc. They are working on building strategic partnerships with between all of their vendors and suppliers and consolidating them. 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. From an initial order in 2001.A. 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. woven. Our Customer's perception This reply has come from ASDA Walmart to a query of a Sr.knitted. before the cost justified it.they have grown to be our second largest supplier. Page 71 . 91 From an interview with the Chief Finance Officer. The following is a forwarded e-mail from George Clothing (Wal-Mart) regarding Pearl Global: Subject: Something you should know. “Dear sir.

and where our distribution network has creaked under the pressure. offering us product direct from factory or landed delivered if the situation demanded. and delivery have had to be a given. I feel that we can have an honest conversation with Mr. Deepak Seth has also gone beyond the factory gates to work with the community and put something back. has a right to exploit the people who make the product we sell. price.We want style. ASDA Wal -Mart. hence would like to have some of your observation/views/comments on the business house and your relationship. 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. I honestly believe that to supply fashion retailers at the volume end is one of the most difficult businesses to be in . Lancelot Joseph. 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. Senior Sourcing Manager -Kidswear. 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. Allan Quayle General Manager-Strategic Supplier Development George Clothing Phone 00 44 (0)1455 264409 Mobile 07779 700695 e-mail allan. no-one whether it be store customer. Business India” Page 72 . Below are a few points which I hope you would take time off and reply to at the earliest. Finally. and any issues that have arisen have been resolved immediately and taken as learnings to provide a better service going forward. Quality.Growth on this scale inevitably creates major head-aches for the supply-chain. flexibility to change our minds as to what we want right up to the last minute. quality. 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. retailer. or supplier. Thanks and regards. 1 business publication.quayle@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. For Pearl to grow their business with us. As price deflation has become a way of life in the UK clothing market.com --Original Message-Dear Ms. Best regards. Heather Moreton. We pride ourselves at George that our ethical standards are rigorous. Mr. Executive Editor. so Pearl have stepped in to provide solutions and support. 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. UK I am a journalist from India writing for India's No.

but now they have developed direct relationships with their long-term business partners. INFRASTRUCTURE92 Pearl Global has five or six production facilities in India. They are working on doubling their capacity in the next 2-3 years. dyes and chemical are thoroughly checked before they are fed into the manufacturing process. Quality Control Raw material including fibres. which are shown to buyers in advance. They have six design factories.Buying Agency or Direct They used to contract through buying agencies. now it is 6 months. The embroidery tailors either come into the facilities to perform the work or they send it. Pearl Global then manufactures the style. Subcontracting Sometimes Pearl Global subcontracts hand embroidery. The House of Pearl has over 150 factories across Asia. A few years ago the delivery/production cycle had to begin 18 months in advance. India: Unit Prices (paid to factory per piece of garment supplied) Range Average Retail Delivery Time Type India U. Production Capacity Pearl Global has 20 million pieces in-house capacity and 120 million pieces capacity all across Asia. two of which are in Bangladesh. one in Indonesia. Page 73 . Production System Pearl Global uses an assembly line system. Design/Sampling and Product Development Designs are mostly developed in-house. The House of Pearl’s research and design department prepares a collection of high fashion styles for each season. who then chooses or modifies the styles. VI. and one in China. 90 incl. Sometimes designers from the UK and the U. Pearl Global uses labor contractors. are consulted to developed in-house patterns. Markup (days) High of $10 $6-7 USD 3 to 4 times 60 to manufacture. but it mostly in-house. 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. yarns. 50% FOB.S.S. 5% freight. 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.

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

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

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

Mr. London College of Fashion. like in “Pearl Global to merge two companies. its alumni hold responsible positions in more than 300 leading organisations. Deepak Seth. and is located in the Okhla Industrial Area (Phase II) of New Delhi.system. 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. Retailing.com/index.”101 Pearl Academy of Design Education-Pearl Academy of Fashion http://www. 7 Feb 2006. The company is setting up new facilities in Dhaka (Bangladesh) and a design center at Chennai. the Netherlands' Hogeschool van Amsterdam.htm Advisory board includes: Mr. Managing Director.com/articleshow/1404688. one of the top two in this field in the world. 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. 101 Page 77 . Mr. The House of Pearl is planning to get into retailing and is working on an industrial engineering department and setting up software SAM. Lalit Gulati. Chairman.cms>.Virender Uppal. <http://economictimes. such as the UK's Chelsea College of Art & Design. R & Company. Merchandising.16 equity shares of the company for every share in City Estates was recommended by the board at the meeting. The Advisory Board of the Academy consists of leading exporters. Modelama Exports The Pearl Academy of Fashion was set up in 1993 by Pearl Global Ltd. Hong Kong Polytechnic University. at Naraina. and London Centre for Fashion Studies. in India and abroad. industrialists and academicians. It has a validation agreement with the UK's Nottingham Trent University (NTU). Pearl Global. 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).. It has links with acknowledged international leaders in fashion education.” The Economic Times: Garments/Textiles. As a result of the close interaction between the industry and the institute.indiatimes. who constantly review the institute's performance to ensure that the programmes are practical and industry-oriented. It provides training programs in the areas of Fashion Design. Partner. and Germany's LDT Nagold.pearlacademy. Production and Computer Aided Design…The Academy has opened its second campus in New Delhi. Bolton University.

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

visit www. Gurgaon. Deepak Seth.babson. growth prospect remaining high. Pearl Global is getting into domestic retailing: “ [Pearl Global]. however after e-mailing the Chairman. “According to industry sources. The Company Secretary was not useful in arranging interviews with other personnel who would be able to answer what he could not. Babson Executive Education offers executive development programs to experienced managers worldwide. <http://sify. Page 79 .php?id=13972072>... 104 “Pearl Global bullish on Q2 numbers. Olin Graduate School of Business at Babson College. Mass.103 Domestic and International Retailing In addition to the U.S. Ltd.edu. Babson grants BS degrees through its innovative undergraduate program. For information. “We are privileged to work with Pearl Global.” 26 Oct 2005. It was difficult to obtain an interview by calling the numbers on the website.such as Jaipur. Chandigarh and Lucknow. the company is in the process of booking retail outlet spaces in cities across northern region . a company that shares our vision to advance Entrepreneurship knowledge in India. the recent fall in price makes it an attractive long-term bet.edu/Newsroom/Releases/Babson-and-Pearl.cfm>.”104 XI.W. 24 April 2006. though the researcher was not able to obtain a copy without signing a confidentiality agreement. is recognized internationally as a leader in entrepreneurial management education. The interview consisted of a powerpoint presentation on the structure and capacities of Pearl Global. “According to market analysts.” said Fetters. 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. is understood to have chalked up a plan for its presence in domestic retailing. <http://www3. 103 Babson Newsroom Release. an interview was promptly arranged with the Chief Finance Officer. which is setting up a joint venture manufacturing facility for soft fabrics in China to secure part of its supplies. and grants MBA and custom MS and MBA degrees through the F.babson.com/finance/equity/fullstory.” Babson College in Wellesley.“This collaboration is an important step in Babson’s journey to globalize Entrepreneurship Education. Kool Hearts label.

com/. Phase-1 New Delhi.” E-mail: orient@orientcraft. Founder/Chairman Personal secretary Meghna. 14-A Maruti Industrial Complex Sector-18 Udyog Vihar. Haryana105 3. 15000 ($300) from his father. Page 80 . Gurgaon-122015. 13. Khansa Road Sector 37. ORIENT CRAFT LTD. Gurgaon. the largest computer embroidery facility in the Indian subcontinent. 2341110 2.000 shirts made in India. Unless otherwise indicated. so he could use the proceeds as seed capital. BRIEF HISTORY106 Business began in 1972. 68. Udyog Vihar. a company profile given to the researcher by the Managing Director.6. Gurgaon. I. 7-D Maruti Industrial Complex Sector-18 Udyog Vihar. Haryana 4.com Production Units: 1. There is a preliminary website set up for its embroidery division at http://www. who asked Dhingra to get 1.ocemb. G. Gurgaon II. Dhingra borrowed Rs. Managing Director. but the company was not incorporated until 1978. but it does not contain any information beyond the heading: Orient Craft Limited: Embroidery. 110020 (India) Tel: (+91-11) 26818247. has no website. CONTACT INFORMATION Contact Person: Sudhir Dhingra. Phase IV. He had a friend from London who was buying from importers and selling the goods to specialty shops. An ISO 9001-2000 Unit: “Orient Craft Embroidery Division. From an interview with the Managing Director. 26818249 Website: Orient Craft Ltd. and 105 106 First two units visited by the researcher. most of the information is from the interview. 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. 2343262 Fax: (+91-124) 2342042. Manicandan’s CEC report. Plot No. found some tailors to make the shirts. and preliminary interviews from Gurgaon workers. Dhingra was a law graduate from Chandigarh with no experience. Haryana Tel: (+91-124) 5090800. Udyog Vihar. online business and economic articles. mobile: 9871496362 Corporate Office: Orient House F-8 Okhla Industrial Area.

he obtained a factory processing site of 240 sq. set up a pressing line on the dining table and the production line in the garage. 200-300 people. the Indian-inspired fad went away and he had to spend six to seven months traveling to get rid of inventory stock.000 sq. “At the time. and restarted business with a trial order of 1200 pieces for a customer in L. only now it is 136. Dhingra wanted to improve the standards of quality and infrastructure to globally competitive standards. Dhingra states that others followed Orient Craft’s example. In the mid 1980s. During his traveling. Dhingra “is also Executive Member of the Advisory Committee of AEPC and an active member of reputed associations such as FICCI. 6000 ~ $133). During the first few years. May 2006. with more than 350 modernized factories. Orient’s first factory was established in a village in Hauz Marg and it is still there. yards and outsourced actual manufacturing.” Dhingra wanted to move production out of the village and industrialize the area and put as many skills in-house as possible. Orient subcontracted until the early 80s.000 sq ft. Then after a few years. <http://www. he hired more people. and others. he estimated a production capacity of about 150. they’re looked down upon. When his friend repaid him the Rs. with 1800 people.htm>. And being a tailor is like being a janitor. ASSOCHAM. found another buyer. Then while in Germany. and Germany buyers. Then.niftindia. then consolidated supply chain into one roof. Both were wholesalers who sold to specialty stores. though he stated that it was difficult to actually get the money from the government. Orient got clients by word-of-mouth from their L. ft. 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. In the 1990s Dhingra set up a bigger plant with 100 machines. CMAI. CII. Liz Claiborne sent an American technician to help Orient with worker training and modernization.” His father gave him one year to start up business.000 pieces and an annual turnover of around $40-50. as Gurgaon is the single largest manufacturing sector in India.A. 15000 plus a small portion of the profit (Rs. with 3500 people. you had to be a tailor to be in the garment industry. The first plant in Maruti Industrail complex was the first plant in India that was over 80. CIAE. During this traveling. The first Gurgaon plant was established in 1993.com/iftf.000. and that plant is still there.shipped them to London. When he returned.A. 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. not just in the limited Indian context. he also encountered some buyers. he decided to break into the industry. National Institute of Fashion Technology. he was able to observe fashion trends and the kind of things that were selling. not like today. and he rented a house. they’re not looked up to. when he got back to India.”107 Biography for Sudhir Dhingra for the International Fashion Technology Forum. 107 Page 81 .

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

4 per unit. so they can only be thought of as a rough approximation. 109 These figures were estimated by the Managing Director in the space of 5 minutes.bbc.02 V.8 million 19.00-6.” BBC News.00 % Retail Price111 0. Breakdown of Sales Revenue109 Est USD 2006 Material Cost Labor Overhead112 Profit (target)113 82. Page 83 .12 0. Europe 80% Canada 108 Basu.50 $1. 9 per unit) 113 Dhingra stated that Orient usually ends up with half of the target profit.S.00 $1.20-1.50 $1.8 million 16.8-24.stm>.8-24.08-0. 112 Overhead (mostly energy.20-1. which has doubled in a year and a half-as mentioned by NITRA president-used to be Rs. 110 Based on the company’s average unit price of $10 USD.5-99 million 19.03 0.5 million % of Sales 50-60 12-15 12-15 10 Per Garment110 $5.02-0.02-0. now it is Rs. <http://news. 2 March 2005. BRAND INFORMATION Orient Craft's Export Market 5% 15% U. 111 Average retail markup is five to six times the unit price of the garment.03 0. Kaushik. despite more competitive pricing.co. 742 crores) Other Financials Last years profit was $8 million (40 crores). “Winners and losers in textile shake-up.IV. FINANCIALS Turnover FOB USD $105 million for 2002-2003 FOB USD $118 million for 2004-2005108 FOB USD $165 million for 2005-2006 (Rs.uk/2/hi/south_asia/4294679.A.

Page 84 . There has not been a huge shift in the composition of customers.50 USD (from US companies. Orient was manufacturing skirts that would be sold for $4 USD per piece. but they just opened an office last year. Orient tends to deal in higher quality and higher unit prices and lower volumes.) stated that on the date of the author’s visit in 2005.co. European companies pay higher unit prices). Marks & Spencer is currently direct. 114 Dhingra stated that Orient manufactures 80-90% of what Diane von Furstenburg (high-end maternity clothes) sources from India. 2 March 2005. however an article written for the BBC in 2005 (Basu.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.bbc. <http://news.stm>. Kaushik. however. 115 Restarted business with Macy’s 2 years ago. but they will open up their own office soon.” BBC News. 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. 116 According to Dhingra. Dhingra states that it is easier to deal with buying offices. There has also been an expansion of volumes and an estimated 15-17% growth in orders. they made one skirt for Polo Blue that will retail at $1199 (did not state unit price). depending on the quota category and how much they were previously restricted. Recently. “Winners and losers in textile shake-up. Orient would not take a Wal-Mart order. however used to source to them about 10 years ago. Limited used to be mostly direct. the industry-wide average unit price in India is $3.uk/2/hi/south_asia/4294679. Some things have increased greatly. like cotton pants. Dhingra stated that Orient’s average unit price is $10.

13. gives feedback.000 sq. 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. and creates new designs for each season. ft. as traveling became restricted and Indian companies needed to build a competitive advantage. Production System Orient Craft uses an assembly line system. chiffon to denims and outerwear).niftindia. (unclear if it is the same facility visited) at the cost of over $10 million USD.VI. Orient has created a niche with their diversified product line (mostly cotton/knits or wovens. product development became the key thing that most Western companies were looking for.000 woven per month. of which four are in Delhi. Gurgaon. Production Capacity 2002-2003: 480. which was at the time the “single largest multi-product manufacturing plant in the whole of India.000 knitted per month119 2006: More than 125. companies. and employed 5000 people. 121 According to an interview with the Managing Director. As Dhingra stated. ft.117 Previously. in 2003.”118 Subcontracting Orient does not appear to subcontract. Haryana.121 The average order size is 10-12. and one large plant is located in Noida. sometimes 25-45.000 per day120 2006: In an average day. Orient has a display store in NY on Park Avenue that it opened up 3 yrs ago. INFRASTRUCTURE Company has 21 production facilities.000 pieces and production capacity has grown at least 25% over the past year. According to the company profile. though it does use labor contractors. Orient makes 130. the company had only 17 production facilities spread over 600. but other fabric from silk. Udyog Vihar. 720. The second plant visited was 380.000 or even 100.000 pieces. National Institute of Fashion Technology. In 2003 Orient established a manufacturing complex of 340.000 sq. 119 According to the company profile. 1.htm>. whose samples are then sent to potential buyers.000 woven per month. Sector 37. May 2006.S.com/iftf. six in Gurgaon. even a little bit before. 120 Biography for Sudhir Dhingra for the International Fashion Technology Forum. 117 118 Plot No. It picks up fashion from around the globe. Page 85 . Orient has put a lot of human resources into product development and now boasts 900 product development personnel at 5 different locations.000 pieces. after 9/11.000 knitted per month 2005-2006: 720.000sq. ft. <http://www. in and around Delhi. Orient also deals in some very small volume orders for high-end buyers like Oil Lily. Khansa Road.200.

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

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

sometimes more than their husbands. The “village panchayat said that Muslim women can’t go out…but now that they are trained. Global players are looking for India bases.asp>. 400 per month. Punishments are given to workers without any formalized procedure. Sector-18. I have always been very people-centric-. it would be people. “around five years ago there was an attempt to establish a trade union (at the 7-D. According to Dhingra. There is no grievance policy procedure in place for complains against workers or management. According to G. However upon further inquiry. no formalized dismissal procedure. Now she is a finishing manager and gets 123 Rajshekar.it’s not just about the bottom line. One woman told me.[worker] strikes. and Surendar. Some of our workers are second-generation workers.com/apr0504/coverstory01. Maruti Industrial Complex unit). stating that he would forward the company’s code of conduct and a list of their worker committees through his personal secretary. Although Dhingra stressed how this was all for the benefit of the women and the community. <http://www. T. now we have 23.000 building a community welfare center that provides medical care for community members. But will we be ready in time?” Businessworld. Thirty years ago we employed a women who worked as a thread-cutter and got paid Rs. he stated that such information was confidential and would hurt Orient’s competitive advantage.’” They built a four story structure to house the embroidery tailors. no sexual harassment committees and workers are not involved in wage negotiations or target setting. Manicandan’s CEC report. Page 88 . 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. But the management suppressed and ousted all the workers who [were] involved in the establishment of a Trade Union. Clusters are reinventing themselves. it’s about what we can do for the community. Since then the company started sourcing their manpower from labour contractor[s]. and if a manager finds a worker guilty of an infraction.000 and Orient spent $20. Orient had no worker committees at the facility visited.businessworldindia. and that Orient pays in full for the schooling of female children of workers and for 65% of the schooling of male children.”123 According to G. ten years ago we had 5000 people. 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. Twenty years ago we had over 1000 workers.000. “Preparing for 2005: Dressing up for the party. “if someone asked me what my one single reason for success. workers are fired with no redress. GAP gave Orient $35. ‘my husband doesn’t beat me anymore. they feel very proud to bring in income. M.” Worker Committees/Grievance Policy/Dismissal Procedure Dhingra was reluctant to give specific information regarding worker committees in person. This strategy effectively stops any attempt to consolidate workers towards creating a Trade Union. Manicandan’s CEC report. Orient also helped train 300 women from the nearby village in hand embroidery at international standards.

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

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. the garment industry presently stands at approximately Rs 15. The company’s management is also planning to raise an IPO later this year. India is in an advantageous position. However. the textile industry in India still has a long way to go before it can catch up with Chinese volumes. The company has since then stripped the Spain unit of its machinery and fitted them in its plant here at Gurgaon. Noida and Okhla in Delhi. buyers are getting increasingly quality conscious. 16 September 2005. (despite quota regulations) and India adds to a minuscule 1. In the changed business scenario. The company expects the expansion plans to boost its revenue generation. The expansion plan envisages setting up of two new facilities at Manesar.000 crore.curpg-1. World over. From business articles: The company… acquired a Levis unit in Spain in mid 2005 for Rs 60 crore (approximately 13.bring in buyers. “Indian textile companies on acquisition spree. it is important to have machinery comparing to global standards. X. Kumar. Earlier.” Times News Network.indiatimes. India. PTI Economic Service.3 million dollar)…Orient Craft by its own admission acquired the unit because of its superior machinery content. “Garment exporter Orient Craft buys Levi’s plant in Spain for Rs 60 cr. As of now.125 124 Dipankar.” Industrial Economist: Textiles Report.124 The machinery from the newly acquired plant will form part of the company’s expansion plan at Manesar. “The lifting of quota has brought humongous demands on one side and on the other. Mr Dhingra estimates the annual turnover to be in the excess of Rs 800 crore. of which China contributes one-sixth.com/30thjune06p4. Orient Craft manufactures and exports about 30 lakh units of garment every month.5%. as they need to grow the base of buyers and price is a compelling reason to do that. Ironically it is the same Indian companies who are buying the units for their machines. INDUSTRY COMMENTS Orient recently bought a Levi’s plant in Spain for its technology. Orient has 20 production units spread across Gurgaon. At present. 125 Jha. growing by over onefourth from last year.com/articleshow/msid-1232753. Bangladesh and Pakistan. <http://economictimes. Page 90 . Orient came up on the global radar when it started its first overseas facility in New York two years ago. The company’s deal with Levi’s is the second such significant international venture.htm>.indeconomist.00. Mayur Shekhar. Since the quota system has been reimposed on China.” said Mr Dhingra. near Gurgaon…Levi’s was looking for a buyer due to high maintenance and labour costs in Spain. and aims to increase it to over 40 lakh units after the expansion. India’s lack of worldclass machinery producers domestically has seen a lot of companies look to the West for help. <http://www.cms>.

126 Orient Craft… has entered into an outsourcing arrangement with Sumukin Bussan (SBC). etc.” he said. and every day a new one is opening up—there’s space available in Karol Bagh. if there is a mall…Real estate is growing.” For Orient Craft. Banswala Mills. The SEZ is likely to come up on a 300-acre plot with an estimated investment of Rs 2. 25 November 2005. “Three years ago. that’s 200 million people. dirt. we aim at scaling our Japanese business up to $30-40m. heat. there were only three shopping malls. 126 “Orient Craft plans SEZ for garment units in AP. according to Sudhir Dhingra. delivering the inaugural address.blonnet. <http://www. told reporters on the sidelines of the CII conference on `Textiles forum . In 2-3 years. Page 91 . if even 5% are rich and 15% have disposable income. Financial Daily from THE HINDU group of publications. which is a joint venture of Caramin (France) and Bairb McNutt (Ireland. “The tie up with SBC will give us a good foot hold in the Japanese market. “An increasing number of Japanese buyers are looking at Indian export houses for their sourcing requirements. Why would people go through rain. the Andhra Pradesh Chief Minister. So the spending power is in India. DKNY and Ralph Lauren.S.” Italian and French mills are setting up joint ventures in India. lagging behind US and Europe. retail will explode…People say that Indians don’t have disposable income. where there are higher labor costs.Emerging opportunities and the road ahead' here on Thursday. the exclusive Japan licensee of some well known international textile brands including Calvin Klein. told ET. However.htm>. Rajasekhara Reddy. probably about 80-90% still get clothes from tailors.S.5m worth of textile products in the next couple of years. "The SEZ will house up to 50 companies.Though most people in India. In the next couple of years.— only about 30% of the U. SBC is the buying arm of Kashiama. Orient Craft will be the exclusive suppliers from India to SBC. Orient is considering getting into the domestic market now. The deal is likely to be signed later this month. said the company was "welcome" to set up the SEZ. only about 60-70 million have disposable income. at present Japan is a relatively smaller market. Earlier. we ourselves are looking at buying 2-3 lakh pieces from India. That’s more than the people who spend in the U. the company’s MD. population spend. SBC. consultant.” The Hindu Business Line Internet Edition. He announced the company would be given 10 acres of land at Nacharam to set up a garment manufacturing unit.com/2005/11/25/stories/2005112502590900. Yoshiaki Kamiyama. Now there are 500. Dr Y. a leading Japanese buying house. the ready-to-wear demand in India is growing.000 crore. From business articles: Orient Craft Ltd plans to develop an exclusive special economic zone (SEZ) for garment units in Andhra Pradesh. As per the arrangement. which plans to source $1-1.S. but look how large the population is—out of one billion. Chairman and Managing Director of the company. the market will contribute a significant share of Orient Craft’s overall business pie." Mr Sudhir Dhingra. but best linens) are setting up facilities in India and selling back in Europe.

the company may go for a specific capacity expansion. to cater to new deals in the pipeline. Most are family-run.com/articleshow/1496902. But will we be ready in time?” Businessworld. and Shahi Exports. M.all for the fear of strikes. Meru Exports and Richa Exports of Delhi. claiming more than three-fourth of the pie. T.127 The biggest Chinese firms have a turnover of $800 million-1. Till a year ago. Bangladesh churns out as many garments as India from a fifth as many factories. which it may have to take up to over 40 lakh units. PERSONAL EXPERIENCE Orient Craft does not have a website.128 XI. is India's largest garments exporter. and Dhingra was surprisingly available for an interview. Global players are looking for India bases. Dhingra was fairly open in his responses. India's biggest exporter Orient Craft has also begun to realise that. “Preparing for 2005: Dressing up for the party.businessworldindia. which made finding up to date contact information difficult. China is the largest exporter to Japan. which. At present the Indian textile exports to Japan add up to $296m which is just about 1% of the country’s total textile imports.about 10 times the size of the Delhi-based Orient Craft. we will have to invest in new capacity every year if we have to keep pace with the industry.indiatimes. India lags in technology. Orient Craft manufactures and exports about 30 lakh units of garment every month. 20 April 2006. Like most other economies. and smart use of technology. The centrally air-conditioned facility will combine all the stages of garment manufacturing. <http://www.cms>. Today he is spending Rs 40 crore on a new factory in Gurgaon that would employ 2.com/apr0504/coverstory01. design to finishing. <http://economictimes. 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. Current contact information was finally obtained through a Professor at NIFT. However.Depending on the volume of the orders. Page 92 . and Surendar. Clearly.000 people. skill-intensive manufacturing could be a way to compete. 127 “Orient Craft ties up with Japanese co. 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. 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. But what distinguishes them is a relatively larger scale." Orient Craft and Fabric & Fibres are among a few who have been pulling ahead of the pack. productivity and scale. His personal secretary was not useful in obtaining any information. Times News Network.” The Economic Times: Garments Textiles. at Rs 450 crore of revenues.asp>. Clusters are reinventing themselves. Says Orient Craft's executive director Anoop Dhanda: "For the next few years. Others include Gokaldas Exports of Bangalore.200 million . The turnovers of these exporters range from Rs 100 crore to Rs 250 crore. 128 Rajshekar. the company's chairman and managing director Sudhir Dhingra dreaded the idea of setting up huge factories . Thailand does almost the same business as India with a workforce a third the size.

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