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

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 although some were out of date.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

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

EU? Major foreign brands that the company supplies to: length of relationship. total sales. Name.. I’ve heard of collegiate licensing that would provide steady orders from major brands at higher prices. The questionnaire was used only as a guide in the interviews as a reminder of what kind of information was needed. package. where. Designation. Ownership of Company. The survey questions were divided into sections according to the position of the respondent.S. as there are some questions that an HR manager would know more than a Merchandising Agent. What kind of input— CMT. CMT. discount retailers (Wal-Mart).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. specialty (GAP). U. they often had information regarding each of these areas. no input--or more capable. vol of product. DSP questions. since a conversational approach proved to yield the most information.mailing questions proved fruitless in gathering information. how fast company delivers products to brand Kinds of buyers—importers. if only a higher level manager could be reached. 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. 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 . 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. get order. and Responsibilities of Respondent: Number of Years in the Company: General Upper Management Do you have a brochure saying what products. deliver? Does the company ever have problems with contracts and/or steady orders? (if possible. However. sourcing. dpt stores (Belks) What is the average price that you get per piece of garment supplied? Do you know the average retail price at the point of sale? By item? At what point of delivery do you get the price (FOB – freight on board. help design.

codes of conduct. Sexual Harassment Committee.Have they used outside agencies in developing any part of their strategies? Part of AEPC. total value of exports. pressmen.e. finishers. Productivity Committee. trainees. supervisors. 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. overhead. subcontracting. 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. etc. 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. washers. unskilled). material cost. checkers. 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. Grievance Committee. Have there been any attempts at unionization in the past? What is the company’s attitude toward unionization? Page 6 . who are the members and how are cases handled? Give details. Quality Circle? If yes. Shopfloor Committee. etc. labor cost. How many women. cutters. average age of employees. what is displayed to workers on details of employment. Have you seen a benefit in productivity since implementation of program? Are there joint worker-manager forums in your organization? If yes. what do these forums do? Get any documents willing to give at any point. tailors (skilled. NITRA. helpers. men. 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. semi skilled. 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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in Nehru Stadium. which is not true for privately owned companies. Form 29 for Pearl Global makes it a public limited company. New Delhi 110003 Phone: 011-24362708 Fax: 011-24364570 E-Mail: rocdel.CHAPTER TWO AGENCY PROFILES 1. Since Pearl Global is a public limited company.. According to an interview with the Company Secretary of Pearl Global Ltd.in/ROC_2003. the address of the registered office and the locations of the business.sb@sb. Form 32. Such forms include: Form 1. The addresses of each state’s ROC as of 2003 can be found at http://dca. the compliance of companies act.nic. Companies are required to register new events such as a change of directors with the ROC. they must submit several forms at incorporation and annually. which are available for inspection by members of public on payment of the prescribed fee. Lodhi Road.htm : Delhi & Haryana Regional Director: Dr.nic. the details of the board of directors/management structure. relating to the companies registered with them.sb@sb. Navrang Saini Addresses: B-Block Paryavaran Bhawan. Website of the Ministry of Company Affairs: http://www. The Central Government exercises administrative control over these offices through the respective Regional Directors. in order for a company to be registered with the ROC.gov. These offices function as registry of records.mca. the profit and loss are also publicly available. Form 20 gets the Director a Director’s Identification number (the number used on the mca. the office at Nehru Stadium closed down earlier in the year.in However. CGO Complex.nic.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.gov website to access the public disclosure documents). REGISTRAR OF COMPANIES (ROC) The Registrar of Companies is a division of the Indian government’s Ministry of Textiles.The financials publicly available include the annual return and balance (for all companies). Form 18. New Delhi – 110003 E-Mail: rocjln. Page 10 .

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Okhla Industrial Area. In 1999. Okhla Industrial Area.” Apparel Resources.00. Phase 1 Gurgaon 3. 184. Okhla Industrial Area. interview. 6 From company website. Plot No. BRIEF HISTORY Modelama was founded in 1979 by Mr. phase -1 New Delhi 7. owner is Mr. Phase 1 Gurgaon 4. and Pandey. Vinita. Lalit Gulati. B-57. Sector-4 Gurgaon 5.com/defaultnextone. B-26. phase -1 New Delhi 8. 45 lakhs with 50 indigenous sewing machines and a workspace of 4. Udyog Vihar Phase -1 II. Manesar. Gurgaon1 6. Lalit Gulati as a family-run operation. IMT Manesar. phase -1 10. Phase 1 Gurgaon 2. From company website. BASIC PROFILE6 Legal Composition Sole proprietorship. 5 From website. Plot No-5. <http://apparelresources. “Build Quality Rather Than Check The Quality. Modelama places a great emphasis on technology as the secret to its success. 201.5 III. B-80.000 square feet. 200. 7 & 8. Modelama professionalized its management structure and has been consistently upgrading technology in their production facilities. 204. phase -1 New Delhi 9. Other production sites in untranslated Hindi document. B-33.000 square feet. Modelama today has ten professionally run production units over 4.asp?msg=2710&cod=newsindetail&nam=>. 4 3 Page 25 . Okhla Industrial Area. Sector-5. In the first year they exported Rs.Road Map 3 Production Units4 1.

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

3000/per month Rs. Rs. 7 ICRIER Data (based on an interview at B-57 Okhla Industrial Area plant in Fall 2005) Page 27 .000 per year 25.IV. 2800/per month. 500 Rs.000 30% Rs. 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. 3cr.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. 500 Total employment 500 500 Production workers 450 450 Proportion exported directly --Proportion exported indirectly through intermediaries Misc. of pieces exported to the US No. 500 500 450 60% 40% 150. VA per employee Rs. FINANCIALS Turnover 70 Turnover (millions USD) 60 60 50 40 30 20 10 0 1981 1985 1990 1995 2000 2002 2005 projected 15 0.5cr. No.

60% of that is Target’s profit margin per unit (PMU). BRAND INFORMATION8 Modelama's Export Market 1% 5% U.com/defaultnextone.S. Average Unit Prices (per piece of garment supplied) Unit Price Origin Product Mix $5-7 USD U. which includes not only the factory unit price but the duty cost (AMC and freight). ~$2.asp?msg=2710&cod=newsin detail&nam=>. 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. “GAP is sourcing worth about $1 billion from India and we are doing more than $10 million with them. Modelama Chairman.99 is the landed cost. Of that remaining $3.S. 9 8 Page 28 .A.” Lalit Gulati. The remaining $3. 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. Europe Others 94% Major Clients Brand Federated Stores (Macy’s) Target Stores GAP (incl.75 goes to Modelama. the unit prices are markedly lower than specialty stores.99. Vinita.99.” Apparel Resources. Although they get large production volumes from discount retailers. An example given was if the retail price of a given garment manufactured for Target is $9.V. 10 Nearly all brands are FOB with the exception of discount retailers like Target Stores (USA). quoted in 9 Pandey. “Build Quality Rather Than Check The Quality.

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

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

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

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

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

Phase-I Gurgaon and B-57 Phase-I Okhla Industrial Area). Customs Security requirements regarding issues like preventing trespassing. “We take care of all their problems. the company usually pays the medical expense. The factory locks its doors at night. All workers were said to have received medical attention. they have joint employee-worker committees required by law.S.” Worker Committees Since there is no union. and an ESI station 1. The code of conduct for Charming Shoppes Inc.” there are no doctors in two of Modelama’s other production units (200. Union There is no union in the production site visited. a Works Committee. companies have required them to uphold a more stringent counter-terrorism model of security in compliance with U. in compliance 20 21 Received a Hindi copy of group meeting minutes. U. the researcher was informed that he was at another production site. Security New security measures have been implemented since the quota phase-out. tampering. and that management works to quickly solve problems in order to maintain an atmosphere of “family.” but when asked to meet the doctor. There are only six recorded injuries at this site for 2006.5 km from the factory. There is a company dentist that comes every Thursday. so there is no need for a union. was displayed on the factory floor. but avoids paying for major injuries and illnesses. Received a Hindi copy of policy. According to G. such as a Health and Safety Committee. A resident doctor is “available at all times. Work times for employees were also posted. HR Manager indicated that there are very few worker grievances.20 Grievance Policy Procedure If workers have a problem.”21 Corporate Responsibility/ Codes of Conduct Modelama’s Anti-Abuse/Harassment Policy is posted on the factory floors in English and in Hindi. nor have there been unionization attempts. If workers suffer from minor injuries. an Anti-Harassment Committee. 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.Dismissal Procedure No information was obtained by the researcher regarding a formalized procedure. but only in English. Page 34 . or CTPAT model. Manicandan’s “Mapping First Tier Suppliers in Garment Industry in Delhi. according to the Customers Trade Partnership Against Terrorism. traceability. Medical Care There is a medical room in the factory. that they can report their grievance to their direct supervisor or upper management. preferring to dismiss the workers.S.

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

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

Two or three other units are in Delhi (Noida) and a fabric processing unit. Sarjapur Main Road Bangalore 560034.shahiindia. BRIEF HISTORY Incorporated in 1974 in Delhi. Harish Ahuja.2.24 23 Unit visited by the researcher.com Head Office Bangalore Belandur Gate. The remaining woven and all knit production sites are located in Bangalore. Karnataka Tel: +91-80-28439214/15 Fax: +91-80-28439356 E-mail: shahiblr@vsnl.in Head Office Faridabad23 Industrial Plot 1. Manicandan’s CEC report. Senior Management Ashok Raman. is former vice chairman of the Apparel Exports Promotion Council of India. General Manager of Marketing Mobile: 98-18212505 E-mail: ashok. I. Tel: +91-129-2273970/80 Fax: +91-129-2273485/91 E-Mail: seh@vsnl. and G.com Website: www. Divisional Manager of Marketing Mobile: 93-13369269 E-mail: ajay. LTD.raman@shahi. Haryana. Shahi Export House has a total of eighteen manufacturing units. CONTACT INFORMATION Contact People J. is in Ghaziabad.co. II. Giri. Page 37 . Sector 28. 1. business articles. the owner of the company.in Ajay Khanna. Palmprint Textile. The information in the following company report was primarily obtained from interviews with the General and Divisional Managers of Marketing.co.D. Faridabad. Sector 28 Faridabad 121008. SHAHI EXPORT HOUSE PVT.khanna@shahi.com Production Units: Plot No. the company website.

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

8 million 2.65 $0.11 $0. Did not obtain average retail markup information. 2.78-$1.65 Material Cost Labor Trims and Packing Depreciation Machinery upkeep Overhead Embellishments32 Profit 27 Estimated by General Manager of Marketing. 31 Based on the company’s average unit price of $6.13 $0.pdf>. No.5 USD.8 million 7-14 million 14 million % of Sales 50% 12-17% 10-20% 1% 2% 2% 5-10% 10% target Per Unit Price31 $3.pdf/$FILE/Fashion_News_05_02_en2_Webb.lawson.Awards Wal-Mart International Supplier of the Year 2000 (can’t read others) IV. 2005 <www. 28 Fashion Newsletter.4 million 2. It can be none or most of the unit price. so they can only be thought of as a rough approximation. Page 39 . 30 These figures were estimated by the Divisional Manager of Marketing in the space of 5-10 minutes. Percent of sales is based on an average estimate given by the Divisional Manager of Marketing.13 $0.65-$1.30 $0.8-23.com/www/resource. 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. Turnover estimates varied by tens of millions of dollars between the GM and the Divisional Manager of Marketing.25 $0. so figures cannot be considered accurate. 29 Estimated by General Manager of Marketing. 32 Embellishment costs such as embroidery depends on style.033-$0.07 $0. though generally it is four to seven times the unit price of the garment.nsf/pub/Fashion_News_05_02_en2_ Webb. accessed July 2006.8 million 14-28 million 1.

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

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

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

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

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

1 million PCs during the off-peak season. Page 48 .4 million pieces during the peak season and 2. Shahi has to decline some orders during peak season (OctoberMay). The picture of the minimum wage was taken by the manager. tampering. (Stated that retained incentive schemes and everything off-season. Mentioned that Southeast Asia has the same problem of seasonality.000 pieces per month. as they produce about 2.46 Shahi recently opened up a warehouse in New Jersey. Website contact numbers are out-of-date. PERSONAL EXPERIENCE Obtained contact information from NIFT. Also argued for more labor flexibility. Shahi does not have a sexual harassment committee. U. according to the Customers Trade Partnership Against Terrorism. according to G.Security System New security measures have been implemented since the quota phase-out. The Marketing Managers did not mention any new initiatives taken to deal with the issue. now they do. before they didn’t have the quota holdings to compete. as he would not permit the researcher to do so. However Shahi is trying to diversify their product range so that it becomes even less of an issue. who reported her case to the police. or CTPAT model. however said they currently retain workers during the off-season because it becomes a problem to rehire workers. traceability. where the garment industry is over 90% male. Supposedly all visitors have to have proof of identity. IX. though the researcher was not permitted to take pictures during the tour. Manicandan’s CEC report. companies have required them to uphold a more stringent counter-terrorism model of security in compliance with U. Shahi is currently constructing a production unit in Bangalore that would have a capacity of manufacturing 200. It is not a huge issue.47 XI. since it takes too much time to get clearance at the ports. Customs Security requirements regarding issues like preventing trespassing. From interview with Professor Rajesh Bheda of NIFT. only different season.S. but I did not have to show it. BUSINESS BOTTLENECKS Seasonality is an issue. and there was some controversy a few years back regarding a male manager and a female worker. now they are getting competition from small exporters. 46 47 From interview with Divisional Manager of Marketing.S. The security guards inside were asleep. Suppliers have changed post-quota. The production unit was enormous. However. Stated that they need better infrastructure regarding port system. INDUSTRY COMMENTS Trying to build up capacity to produce outerwear by next year to reduce seasonality issues. and then not working to full capacity during the off-season.) X. Shahi is notable in that they have a majority female workforce in a place like Delhi.

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

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

56 Average retail markup is four ($20) to six ($30) times the unit price of the garment. 700.5% Subcontracting Cost 1.000.50 1.6 million 10 $0.6-2. etc. Latin America. Page 51 . which accounts for the inconsistencies.57 V.555 USD)53 Breakdown of Sales Revenue54 Est USD 2006 Per % Retail Garment55 Price56 Material Cost 9. excluding the $12 million USD figure from the company profile. 55 Based on the company’s average unit price of $5 USD.6 million 10 $0.IV.6-2. 57 Since Jyoti’s unit prices are mostly FOB.5% Overhead and profit 1.6-2. and cannot be used as an indicator of profit.6-2.5% MNC’s that source from Jyoti.S. 54 These figures were estimated by the Managing Director in the space of 5-10 minutes. 10% 50% 40% Others (Canada.50 1.50 1. retain 75-84% of the sale of a retail item. Malaysia) Europe 53 Financials.5% Other Manufacturing 1.3 million 60 $3 10-15% Labor 1.6 million 10 $0. FINANCIALS Turnover 12 million USD (either 2003 or 2004) Current year 18 million USD Other Financials Current year sales Rs.A.6 million 10 $0. were estimated by the Managing Director on two different occasions.000 (15. duty. BRAND INFORMATION Jyoti's Export Market % of Sales U. on average. Japan. so they can only be thought of as a rough approximation. this figure includes the amount the MNC spends on shipping.50 1. costs.

and two are 600 square meters. VI. 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. American Eagle. which is not a production facility). primarily through the Triburg buying agency. and Gloria Vanderbilt through buying agencies.000 square meters. but they do subcontract their fabric sourcing and processing. four are 1. but later stated that overall they have remained stable.000 square meters. INFRASTRUCTURE Company has nine production facilities.000 square feet of land spread over ten different areas (including the registered office.58 Production System 58 See Standard Operating Procedures for detailed subcontracting information.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. Overall. one is 8. Prices and other sourcing details are negotiated through the buying agencies. the company has about 20. It is notable that Jyoti subcontracts to a Shahi processing facility. Subcontracting Jyoti does not subcontract the production process.000 square meters. Two of the factories are 2. Did not mention any direct relationships. Subcontracting has not changed since quota phase-out. Page 52 . he stated that unit prices have decreased about 10%.

Quality Control Jyoti Apparels has a quality control assurance team with both an in-house auditing scheme and third-party inspection.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. lock stitch single needle and double needle. 59 60 See SOPs for detailed quality control schemes. perk-chloro plants. but primarily just take paper designs from buyers and converts it to clothing. washing machines and set of 84 stem boiler irons. belt attaching. between 240.000 pieces per month. cross stitch/lock stitch button/ button hole/ snaps. 8000 woven pieces per day and 1200 knit pieces per day. shell stitch (Merrow). Page 53 .000 and 300. usually 80.000 pieces per month. computer embroidery. dry cleaning. elastic insertion.Uses an assembly line system. Managing Director and Assistant Production manager stated they were all skilled. piccoting. The researcher observed production of ladies’ white blouses for Emma James (Liz Claiborne). feed of the arm. and brown machine-embroidered skirts for American Eagle. Design/Sampling Small design department. over locks. According to company profile. fusing machines.000-90. Sometimes Jyoti has people from UK and France do designs for them. At production site visited. which varies according to the product. Production Capacity According to profile.

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

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

rather they calculate targets manually by hourly production rate. However. 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. Wage Setting Procedure For shop floor workers. The production unit visited usually produces 80.000 pieces per month. finishing supervisor. Page 56 . workers are offered a wage based on this evaluation. which is not subject to negotiation. security tag Four operators Step 2—Initial Pressing One supervisor Step 3—P. then the factory will give incentives. while the rest of the employees receive a monthly salary.Step 1—Care label. First the Assistant Production Manager stated that they do not perform time studies. If workers exceed this by 1 lakh. 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. Then he stated that they conduct production planning meetings with the factory manager.O. and gave a copy of the minimum wage scheme for Haryana.000-90. merchant/buyer (for style). Labor Turnover Estimated worker turnover per month at 20%. it is all left to selfdiscipline. extra button. VII. Benefits Production manager indicated that workers receive ESI and PF. 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. After one day period. Wise Tag check with care. production manager. The tailors and some finishing employees receive wages on a daily basis. supervisors conduct time studies evaluating the skill level and productivity of a new hire. according to the Assistant Production Manager.

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

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

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

4. 25172437. 208. aluminum hardware. the current Chairman. Udyog Vihar. Phase III. 67 Unit visited by the researcher. with one woven garments manufacturing unit in Delhi. General Manager of Operations 236 Udyog Vihar Phase-I. Udyog Vihar. Phase I. 479. Gurgaon 7. 192. Gurgaon. incorporated R and Co. Phase-I Gurgaon The company profiled has over ten manufacturing units. 25454895 Contact person: Padam Vaish.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. including: 1. 133. B-108. 151. 66 According to company website. in 1977. 68 According to the company website. Mayapuri Industrial Area. Gurgaon67 6. an interview with a General Manager of Operations. Manicandan’s CEC report. Noida. Page 60 . 239. Udyog Vihar. 69 From an interview with the General Manager of Operations. Phase IV. Gurgaon 3. I. Gurgaon. Phase I. Phase III. G INTERNATIONAL OF R GROUP OF COMPANIES Indian Government Recognized Export House The information in the following company report was primarily obtained from the company website. 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. Phase I. BRIEF HISTORY68 Vijay Uppal. G International was established in 1983 in Delhi and 1996 in Gurgaon. and Bangalore. Gurgaon 5. Udyog Vihar. Udyog Vihar. 506. Udyog Vihar. Udyog Vihar. Udyog Vihar. Phase III. New Delhi . New Delhi 2. and ironmongery. II. including: 1. Gurgaon 8.110015 (India) Tel: +91-11-25431408. 25172438 Fax: +91-11-25451549. CONTACT INFORMATION65 Registered Office: 2/2. Ware Housing Scheme Kriti Nagar. 236. 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. and G. black iron. Gurgaon 2. Udyog Vihar. Gurgaon 4. Phase I. Phase-I. 225.

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

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

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

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

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

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

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

online business publications and press releases.com Production Units: 1. Udyog Vihar. Gurgaon 4. In 1993 it became a public limited company. 222. Phase I. Phase-V Gurgaon – 122 016. and an interview with the Company Secretary. The information in the following company report was obtained primarily from an interview with the Chief Finance Officer. Chief Finance Officer Tel: 91-124-4308201 rishiv@pearlglobal. Gurgaon 2.com Jayant Sood. as it includes all parts of the garment industry under the “House of Pearl. Page 68 . From an interview with the Chief Finance Officer. business began in the 1980s. Company Secretary Tel: 95-124-4308164 E-mail: jayants@pearlglobal. G. 446. The company structure of Pearl Global is extremely unique. Manicandan’s CEC report. Haryana Tel : 91-124-4004086/87/88/89/90 Fax: 95-124-4004067/85 Website: www. Udyog Vihar. Phase V. 138.com Registered Office: A-3.com Rishi Vig. and its first manufacturing facility was established in 1989. the company website. I. Phase V. Gurgaon 3. CONTACT INFORMATION Contact People: Deepak Seth. Community Centre Naraina Industrial Area Phase-II New Delhi – 110 028 Tel : 011-51417680-82 Corporate Office82: 446 Udyog Vihar. Chairman deepaks@pearlglobal. Phase I.pearlglobal. BRIEF HISTORY83 Pearl Global was incorporated in 1979.” The House of Pearl is focused 82 83 Unit visited by the researcher. 870.5. Udyog Vihar. Udyog Vihar. Gurgaon II. PEARL GLOBAL LTD.

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

indiatimes.9 crore in the previous fiscal]. FINANCIALS Turnover $200 million worldwide before quota phase-out. The revenue of the company during the year was up 31.” <http://www.5 crore in the previous year.9 per cent to Rs 159. Rotunda Building. 89 From an interview with the Company Secretary.IV. Sahajanand College Panjarapole. New Trading Ring.380015 87 88 From Chairman’s Message on company website.com/articleshow/1690384.400 001. P. 90 “Pearl Global net up 88%.6. 29 June 2006.5 crore [from 120.asp>.89 Other Financials “Pearl Global posted 88 per cent year-on-year increase in net profit in 2005-06 to Rs . Dalal Street Mumbai . National Stock Exchange of India Limited Exchange Plaza. In 2005-06 the company invested Rs 29 crore to augment its production capacities in Gurgaon and setting up a new unit in Chennai. Bombay Stock Exchange Limited 1st Floor.” “The company’s operating profit was Rs 17.43 crore[ from Rs.”90 See website for detailed financials. Babson College press release.” The Economic Times: Garments/Textiles.telegraphindia. 3. Ahmedabad Stock Exchange Limited Kamdhenu Complex Opp. Pearl announced a dividend of 30 per cent for the year [subject to shareholders’ approval]. G-Block Bandra – Kurla Complex Bandra (E) Mumbai – 400 051 4.1 crore compared with Rs 7. Towers. <http://economictimes.41 crore in 2004-05].110 002 2. The Delhi Stock Exchange Association Limited (Regional Stock Exchange) DSE House 3/1 Asaf Ali Road New Delhi . Ahmedabad .com/1060712/asp/business/story_6465123. Stock Exchanges where the securities are listed: 1. Page 70 .cms> and “Corporate Briefs: Pearl Global.C/1.87 $400 million in its worldwide operations post quota phase-out.88 Net profits are 234% up. 3. 5th Floor Plot No. J.

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

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

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

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

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

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

Lalit Gulati.”101 Pearl Academy of Design Education-Pearl Academy of Fashion http://www. They just initiated a subjectivity productivity software analysis system which would analyze the difficulty of manufacturing particular items and adjust productivity goals accordingly (so workers are not “punished” for lower productivity levels if the style is more difficult and it is not their fault).pearlacademy.cms>.16 equity shares of the company for every share in City Estates was recommended by the board at the meeting. It has a validation agreement with the UK's Nottingham Trent University (NTU).indiatimes. 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. one of the top two in this field in the world. Mr. It provides training programs in the areas of Fashion Design. and Germany's LDT Nagold. The House of Pearl is planning to get into retailing and is working on an industrial engineering department and setting up software SAM.system. such as the UK's Chelsea College of Art & Design. Merchandising. The Advisory Board of the Academy consists of leading exporters. R & Company. who constantly review the institute's performance to ensure that the programmes are practical and industry-oriented. As a result of the close interaction between the industry and the institute. 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. Deepak Seth. like in “Pearl Global to merge two companies. and is located in the Okhla Industrial Area (Phase II) of New Delhi. Hong Kong Polytechnic University. in India and abroad. industrialists and academicians.htm Advisory board includes: Mr. Partner. Production and Computer Aided Design…The Academy has opened its second campus in New Delhi. The company is setting up new facilities in Dhaka (Bangladesh) and a design center at Chennai. its alumni hold responsible positions in more than 300 leading organisations. 101 Page 77 . It has links with acknowledged international leaders in fashion education. and London Centre for Fashion Studies.” The Economic Times: Garments/Textiles. at Naraina. the Netherlands' Hogeschool van Amsterdam. Bolton University. Modelama Exports The Pearl Academy of Fashion was set up in 1993 by Pearl Global Ltd. 7 Feb 2006.com/index.Virender Uppal. Retailing. Pearl Global. <http://economictimes. Managing Director. Chairman. Mr.. London College of Fashion.com/articleshow/1404688.

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

Deepak Seth. Gurgaon. “According to industry sources.”104 XI. the company is in the process of booking retail outlet spaces in cities across northern region . is understood to have chalked up a plan for its presence in domestic retailing.S. Babson grants BS degrees through its innovative undergraduate program.. 104 “Pearl Global bullish on Q2 numbers.” 26 Oct 2005.edu/Newsroom/Releases/Babson-and-Pearl. It was difficult to obtain an interview by calling the numbers on the website. though the researcher was not able to obtain a copy without signing a confidentiality agreement.“This collaboration is an important step in Babson’s journey to globalize Entrepreneurship Education. a company that shares our vision to advance Entrepreneurship knowledge in India. Pearl Global is getting into domestic retailing: “ [Pearl Global]. is recognized internationally as a leader in entrepreneurial management education.. Chandigarh and Lucknow. Page 79 . Mass.babson. <http://sify. <http://www3.cfm>. Olin Graduate School of Business at Babson College.” said Fetters. For information. the recent fall in price makes it an attractive long-term bet. visit www.com/finance/equity/fullstory.” Babson College in Wellesley. and grants MBA and custom MS and MBA degrees through the F. an interview was promptly arranged with the Chief Finance Officer. Babson Executive Education offers executive development programs to experienced managers worldwide. “We are privileged to work with Pearl Global.W. 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. “According to market analysts.such as Jaipur. The interview consisted of a powerpoint presentation on the structure and capacities of Pearl Global. however after e-mailing the Chairman. growth prospect remaining high.babson.php?id=13972072>. 103 Babson Newsroom Release. The Company Secretary was not useful in arranging interviews with other personnel who would be able to answer what he could not. Kool Hearts label. 24 April 2006.103 Domestic and International Retailing In addition to the U.edu. Ltd. which is setting up a joint venture manufacturing facility for soft fabrics in China to secure part of its supplies.

Gurgaon. 2343262 Fax: (+91-124) 2342042. Plot No. Phase-1 New Delhi. An ISO 9001-2000 Unit: “Orient Craft Embroidery Division.” E-mail: orient@orientcraft. Gurgaon-122015. He had a friend from London who was buying from importers and selling the goods to specialty shops. 15000 ($300) from his father.ocemb. Gurgaon.6. but it does not contain any information beyond the heading: Orient Craft Limited: Embroidery. Founder/Chairman Personal secretary Meghna. From an interview with the Managing Director. Haryana 4. so he could use the proceeds as seed capital. Phase IV. who asked Dhingra to get 1. Udyog Vihar. 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. Haryana105 3. Manicandan’s CEC report. ORIENT CRAFT LTD. 68. a company profile given to the researcher by the Managing Director. Dhingra was a law graduate from Chandigarh with no experience. online business and economic articles. Dhingra borrowed Rs.com Production Units: 1.com/. and preliminary interviews from Gurgaon workers. most of the information is from the interview. 2341110 2. Udyog Vihar. found some tailors to make the shirts. 7-D Maruti Industrial Complex Sector-18 Udyog Vihar. and 105 106 First two units visited by the researcher. There is a preliminary website set up for its embroidery division at http://www. Managing Director. has no website. G. BRIEF HISTORY106 Business began in 1972. 110020 (India) Tel: (+91-11) 26818247. CONTACT INFORMATION Contact Person: Sudhir Dhingra. 26818249 Website: Orient Craft Ltd. but the company was not incorporated until 1978. I. Unless otherwise indicated. 14-A Maruti Industrial Complex Sector-18 Udyog Vihar. mobile: 9871496362 Corporate Office: Orient House F-8 Okhla Industrial Area. Khansa Road Sector 37. Haryana Tel: (+91-124) 5090800. the largest computer embroidery facility in the Indian subcontinent. 13. Page 80 . Gurgaon II.000 shirts made in India.

Orient got clients by word-of-mouth from their L.” His father gave him one year to start up business. Then. the Indian-inspired fad went away and he had to spend six to seven months traveling to get rid of inventory stock. with 1800 people. Orient’s first factory was established in a village in Hauz Marg and it is still there. 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. May 2006. with 3500 people. only now it is 136.niftindia. 107 Page 81 .”107 Biography for Sudhir Dhingra for the International Fashion Technology Forum. Dhingra states that others followed Orient Craft’s example.A. During the first few years. and Germany buyers. The first Gurgaon plant was established in 1993. and restarted business with a trial order of 1200 pieces for a customer in L.htm>. not just in the limited Indian context. CII. 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.000. During this traveling.” Dhingra wanted to move production out of the village and industrialize the area and put as many skills in-house as possible. and that plant is still there. ASSOCHAM. Then after a few years. CIAE. he estimated a production capacity of about 150. In the mid 1980s. Both were wholesalers who sold to specialty stores. yards and outsourced actual manufacturing. they’re looked down upon. <http://www. he also encountered some buyers. when he got back to India. not like today. ft. as Gurgaon is the single largest manufacturing sector in India. When he returned. 6000 ~ $133).A. and others. When his friend repaid him the Rs. Dhingra “is also Executive Member of the Advisory Committee of AEPC and an active member of reputed associations such as FICCI. CMAI. and he rented a house. And being a tailor is like being a janitor. he decided to break into the industry. Liz Claiborne sent an American technician to help Orient with worker training and modernization. In the 1990s Dhingra set up a bigger plant with 100 machines. though he stated that it was difficult to actually get the money from the government. The first plant in Maruti Industrail complex was the first plant in India that was over 80. “At the time. 200-300 people. with more than 350 modernized factories. you had to be a tailor to be in the garment industry. Dhingra wanted to improve the standards of quality and infrastructure to globally competitive standards.com/iftf.shipped them to London. he was able to observe fashion trends and the kind of things that were selling. they’re not looked up to. 15000 plus a small portion of the profit (Rs. Then while in Germany.000 sq ft. During his traveling.000 pieces and an annual turnover of around $40-50.000 sq. he hired more people. then consolidated supply chain into one roof. set up a pressing line on the dining table and the production line in the garage. National Institute of Fashion Technology. found another buyer. Orient subcontracted until the early 80s. he obtained a factory processing site of 240 sq.

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

5-99 million 19. Breakdown of Sales Revenue109 Est USD 2006 Material Cost Labor Overhead112 Profit (target)113 82.8-24. Page 83 .8-24. 109 These figures were estimated by the Managing Director in the space of 5 minutes. Europe 80% Canada 108 Basu. 112 Overhead (mostly energy. 110 Based on the company’s average unit price of $10 USD. 111 Average retail markup is five to six times the unit price of the garment.uk/2/hi/south_asia/4294679.50 $1.A.08-0. despite more competitive pricing.20-1.bbc. 742 crores) Other Financials Last years profit was $8 million (40 crores).00 % Retail Price111 0.20-1. “Winners and losers in textile shake-up.5 million % of Sales 50-60 12-15 12-15 10 Per Garment110 $5. 9 per unit) 113 Dhingra stated that Orient usually ends up with half of the target profit. 4 per unit.8 million 16.IV. now it is Rs. 2 March 2005.” BBC News.8 million 19.50 $1.02-0.00 $1.03 0. FINANCIALS Turnover FOB USD $105 million for 2002-2003 FOB USD $118 million for 2004-2005108 FOB USD $165 million for 2005-2006 (Rs.02-0.00-6. BRAND INFORMATION Orient Craft's Export Market 5% 15% U.S. Kaushik. which has doubled in a year and a half-as mentioned by NITRA president-used to be Rs.02 V.stm>.03 0. so they can only be thought of as a rough approximation. <http://news.12 0.co.

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

chiffon to denims and outerwear). In 2003 Orient established a manufacturing complex of 340. ft. 121 According to an interview with the Managing Director. the company had only 17 production facilities spread over 600. It picks up fashion from around the globe. after 9/11.VI. Orient has put a lot of human resources into product development and now boasts 900 product development personnel at 5 different locations. gives feedback. INFRASTRUCTURE Company has 21 production facilities. Udyog Vihar. as traveling became restricted and Indian companies needed to build a competitive advantage. which was at the time the “single largest multi-product manufacturing plant in the whole of India. 13. but other fabric from silk.000 or even 100. The second plant visited was 380.”118 Subcontracting Orient does not appear to subcontract. National Institute of Fashion Technology.com/iftf. ft. Page 85 .000 knitted per month119 2006: More than 125. 1. Orient has a display store in NY on Park Avenue that it opened up 3 yrs ago. of which four are in Delhi.S. Orient makes 130.niftindia. May 2006.000 woven per month.000 sq. <http://www. (unclear if it is the same facility visited) at the cost of over $10 million USD.000sq.000 pieces and production capacity has grown at least 25% over the past year. Sector 37. 117 118 Plot No. Gurgaon. As Dhingra stated. product development became the key thing that most Western companies were looking for.200. though it does use labor contractors. whose samples are then sent to potential buyers. sometimes 25-45. 120 Biography for Sudhir Dhingra for the International Fashion Technology Forum. in and around Delhi. Orient also deals in some very small volume orders for high-end buyers like Oil Lily.000 woven per month. Orient has created a niche with their diversified product line (mostly cotton/knits or wovens. 720.000 knitted per month 2005-2006: 720.000 per day120 2006: In an average day. Production Capacity 2002-2003: 480. in 2003. even a little bit before.000 sq. According to the company profile. six in Gurgaon.117 Previously. 119 According to the company profile. and employed 5000 people. Production System Orient Craft uses an assembly line system.000 pieces.121 The average order size is 10-12. and one large plant is located in Noida. Khansa Road.htm>. Haryana.000 pieces. and creates new designs for each season. companies. ft. Design/Sampling Orient has ramped up its design department in the past five to seven years using mostly in-house skills with some help from U.

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

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

com/apr0504/coverstory01. he stated that such information was confidential and would hurt Orient’s competitive advantage. it would be people.’” They built a four story structure to house the embroidery tailors. ten years ago we had 5000 people. stating that he would forward the company’s code of conduct and a list of their worker committees through his personal secretary.”123 According to G. sometimes more than their husbands. There is no grievance policy procedure in place for complains against workers or management. Manicandan’s CEC report. Orient also helped train 300 women from the nearby village in hand embroidery at international standards. Global players are looking for India bases. 400 per month. 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. they feel very proud to bring in income. Punishments are given to workers without any formalized procedure. Twenty years ago we had over 1000 workers. Now she is a finishing manager and gets 123 Rajshekar. ‘my husband doesn’t beat me anymore. Since then the company started sourcing their manpower from labour contractor[s]. I have always been very people-centric-. But the management suppressed and ousted all the workers who [were] involved in the establishment of a Trade Union. M. This strategy effectively stops any attempt to consolidate workers towards creating a Trade Union. But will we be ready in time?” Businessworld. “Preparing for 2005: Dressing up for the party. T. and Surendar. “if someone asked me what my one single reason for success. no formalized dismissal procedure. According to Dhingra. Although Dhingra stressed how this was all for the benefit of the women and the community. Thirty years ago we employed a women who worked as a thread-cutter and got paid Rs. Orient had no worker committees at the facility visited. no sexual harassment committees and workers are not involved in wage negotiations or target setting. it’s about what we can do for the community. Manicandan’s CEC report. workers are fired with no redress.” Worker Committees/Grievance Policy/Dismissal Procedure Dhingra was reluctant to give specific information regarding worker committees in person. and that Orient pays in full for the schooling of female children of workers and for 65% of the schooling of male children.000 and Orient spent $20. One woman told me. The “village panchayat said that Muslim women can’t go out…but now that they are trained. <http://www. Maruti Industrial Complex unit).businessworldindia. GAP gave Orient $35. Clusters are reinventing themselves. Sector-18.000 building a community welfare center that provides medical care for community members. 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. However upon further inquiry. Some of our workers are second-generation workers. and if a manager finds a worker guilty of an infraction.it’s not just about the bottom line. According to G.[worker] strikes.000. now we have 23. “around five years ago there was an attempt to establish a trade union (at the 7-D.asp>. Page 88 .

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

cms>. Ironically it is the same Indian companies who are buying the units for their machines. (despite quota regulations) and India adds to a minuscule 1. PTI Economic Service. Mr Dhingra estimates the annual turnover to be in the excess of Rs 800 crore. “Indian textile companies on acquisition spree. The company’s management is also planning to raise an IPO later this year. Bangladesh and Pakistan. the textile industry in India still has a long way to go before it can catch up with Chinese volumes. Earlier. “The lifting of quota has brought humongous demands on one side and on the other. Orient Craft manufactures and exports about 30 lakh units of garment every month. Since the quota system has been reimposed on China. Orient came up on the global radar when it started its first overseas facility in New York two years ago.3 million dollar)…Orient Craft by its own admission acquired the unit because of its superior machinery content. Mayur Shekhar. 125 Jha. The company expects the expansion plans to boost its revenue generation. growing by over onefourth from last year. it is important to have machinery comparing to global standards. X. The expansion plan envisages setting up of two new facilities at Manesar. Kumar.htm>. of which China contributes one-sixth. World over. The company’s deal with Levi’s is the second such significant international venture.” Times News Network.5%. Orient has 20 production units spread across Gurgaon.00. INDUSTRY COMMENTS Orient recently bought a Levi’s plant in Spain for its technology. 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.indiatimes.indeconomist. India. and aims to increase it to over 40 lakh units after the expansion. “Garment exporter Orient Craft buys Levi’s plant in Spain for Rs 60 cr.bring in buyers.com/articleshow/msid-1232753. <http://www. Noida and Okhla in Delhi. the garment industry presently stands at approximately Rs 15. Page 90 . The company has since then stripped the Spain unit of its machinery and fitted them in its plant here at Gurgaon. India’s lack of worldclass machinery producers domestically has seen a lot of companies look to the West for help.” said Mr Dhingra. However. <http://economictimes. At present.125 124 Dipankar.com/30thjune06p4. 16 September 2005. From business articles: The company… acquired a Levis unit in Spain in mid 2005 for Rs 60 crore (approximately 13.000 crore. India is in an advantageous position. near Gurgaon…Levi’s was looking for a buyer due to high maintenance and labour costs in Spain.” Industrial Economist: Textiles Report. buyers are getting increasingly quality conscious.124 The machinery from the newly acquired plant will form part of the company’s expansion plan at Manesar. In the changed business scenario. as they need to grow the base of buyers and price is a compelling reason to do that.curpg-1. As of now.

but look how large the population is—out of one billion. However. where there are higher labor costs. The deal is likely to be signed later this month. 25 November 2005. at present Japan is a relatively smaller market. lagging behind US and Europe. He announced the company would be given 10 acres of land at Nacharam to set up a garment manufacturing unit. only about 60-70 million have disposable income. said the company was "welcome" to set up the SEZ. which is a joint venture of Caramin (France) and Bairb McNutt (Ireland. population spend. Earlier. Chairman and Managing Director of the company. “Three years ago. we ourselves are looking at buying 2-3 lakh pieces from India. the market will contribute a significant share of Orient Craft’s overall business pie." Mr Sudhir Dhingra. SBC is the buying arm of Kashiama.htm>. <http://www. if even 5% are rich and 15% have disposable income.Though most people in India. Why would people go through rain. delivering the inaugural address. heat.5m worth of textile products in the next couple of years. probably about 80-90% still get clothes from tailors.— only about 30% of the U. a leading Japanese buying house.S. which plans to source $1-1. the exclusive Japan licensee of some well known international textile brands including Calvin Klein.S. “An increasing number of Japanese buyers are looking at Indian export houses for their sourcing requirements. etc. the Andhra Pradesh Chief Minister. In 2-3 years. told reporters on the sidelines of the CII conference on `Textiles forum . Yoshiaki Kamiyama.” he said. The SEZ is likely to come up on a 300-acre plot with an estimated investment of Rs 2. Orient is considering getting into the domestic market now. the company’s MD. That’s more than the people who spend in the U. In the next couple of years.Emerging opportunities and the road ahead' here on Thursday. SBC. but best linens) are setting up facilities in India and selling back in Europe.” For Orient Craft. As per the arrangement. Rajasekhara Reddy. and every day a new one is opening up—there’s space available in Karol Bagh. the ready-to-wear demand in India is growing. consultant. “The tie up with SBC will give us a good foot hold in the Japanese market. retail will explode…People say that Indians don’t have disposable income.” The Hindu Business Line Internet Edition. there were only three shopping malls. Banswala Mills. Dr Y.000 crore. according to Sudhir Dhingra. dirt. Financial Daily from THE HINDU group of publications. if there is a mall…Real estate is growing.” Italian and French mills are setting up joint ventures in India. 126 “Orient Craft plans SEZ for garment units in AP. we aim at scaling our Japanese business up to $30-40m. From business articles: Orient Craft Ltd plans to develop an exclusive special economic zone (SEZ) for garment units in Andhra Pradesh.S. Page 91 . DKNY and Ralph Lauren. Now there are 500.126 Orient Craft… has entered into an outsourcing arrangement with Sumukin Bussan (SBC). that’s 200 million people. "The SEZ will house up to 50 companies.com/2005/11/25/stories/2005112502590900. told ET. So the spending power is in India.blonnet. Orient Craft will be the exclusive suppliers from India to SBC.

is India's largest garments exporter. Page 92 . But will we be ready in time?” Businessworld. productivity and scale. we will have to invest in new capacity every year if we have to keep pace with the industry. the company's chairman and managing director Sudhir Dhingra dreaded the idea of setting up huge factories . The turnovers of these exporters range from Rs 100 crore to Rs 250 crore. Bangladesh churns out as many garments as India from a fifth as many factories. to cater to new deals in the pipeline. Says Orient Craft's executive director Anoop Dhanda: "For the next few years. Global players are looking for India bases.com/articleshow/1496902. “Preparing for 2005: Dressing up for the party. Meru Exports and Richa Exports of Delhi. which it may have to take up to over 40 lakh units. which made finding up to date contact information difficult.com/apr0504/coverstory01. which. the company may go for a specific capacity 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. Clearly. T. <http://economictimes. Dhingra was fairly open in his responses. Till a year ago.about 10 times the size of the Delhi-based Orient Craft.200 million . 127 “Orient Craft ties up with Japanese co. Times News Network. At present the Indian textile exports to Japan add up to $296m which is just about 1% of the country’s total textile imports. and Surendar. Most are family-run. 20 April 2006.000 people. and Shahi Exports. But what distinguishes them is a relatively larger scale. and Dhingra was surprisingly available for an interview.Depending on the volume of the orders. skill-intensive manufacturing could be a way to compete. 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. and smart use of technology.” The Economic Times: Garments Textiles. China is the largest exporter to Japan. <http://www.asp>. 128 Rajshekar. Others include Gokaldas Exports of Bangalore.businessworldindia. Current contact information was finally obtained through a Professor at NIFT. However. India lags in technology.indiatimes.all for the fear of strikes. claiming more than three-fourth of the pie. design to finishing. M. at Rs 450 crore of revenues. PERSONAL EXPERIENCE Orient Craft does not have a website. Orient Craft manufactures and exports about 30 lakh units of garment every month. Clusters are reinventing themselves. Thailand does almost the same business as India with a workforce a third the size. India's biggest exporter Orient Craft has also begun to realise that. Today he is spending Rs 40 crore on a new factory in Gurgaon that would employ 2. 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.cms>. His personal secretary was not useful in obtaining any information." Orient Craft and Fabric & Fibres are among a few who have been pulling ahead of the pack.127 The biggest Chinese firms have a turnover of $800 million-1. Like most other economies.128 XI. The centrally air-conditioned facility will combine all the stages of garment manufacturing.

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