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

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 although some were out of date.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

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

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

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

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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The Central Government exercises administrative control over these offices through the respective Regional Directors. relating to the companies registered with them.in Nehru Stadium. Form 29 for Pearl Global makes it a public limited company.nic. According to an interview with the Company Secretary of Pearl Global Ltd. Companies are required to register new events such as a change of directors with the ROC. The addresses of each state’s ROC as of 2003 can be found at http://dca.gov.CHAPTER TWO AGENCY PROFILES 1.nic. New Delhi – 110003 E-Mail: rocjln. REGISTRAR OF COMPANIES (ROC) The Registrar of Companies is a division of the Indian government’s Ministry of Textiles. Page 10 .mca.sb@sb. which is not true for privately owned companies. Form 32.gov website to access the public disclosure documents). the compliance of companies act.in However.The financials publicly available include the annual return and balance (for all companies). Form 18. CGO Complex. which are available for inspection by members of public on payment of the prescribed fee. the office at Nehru Stadium closed down earlier in the year. they must submit several forms at incorporation and annually. the details of the board of directors/management structure. Navrang Saini Addresses: B-Block Paryavaran Bhawan.. the address of the registered office and the locations of the business. in order for a company to be registered with the ROC.sb@sb. Form 20 gets the Director a Director’s Identification number (the number used on the mca.in/ROC_2003. These offices function as registry of records. Such forms include: Form 1. Since Pearl Global is a public limited company.nic. Website of the Ministry of Company Affairs: http://www. the profit and loss are also publicly available. New Delhi 110003 Phone: 011-24362708 Fax: 011-24364570 E-Mail: rocdel. Lodhi Road.htm : Delhi & Haryana Regional Director: Dr.in According to the Ministry of Company Affairs website: Registrars of Companies (ROC) appointed under Section 609 of the Companies Act covering the various States and Union: Territories are vested with the primary duty of registering companies floated in the respective states and the Union Territories and ensuring that such companies comply with statutory requirements under the Act.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Plot No-5. Sector-4 Gurgaon 5. phase -1 New Delhi 9. Phase 1 Gurgaon 2. Okhla Industrial Area. interview. 204.com/defaultnextone. Udyog Vihar Phase -1 II.Road Map 3 Production Units4 1. Manesar. 4 3 Page 25 . Okhla Industrial Area. 6 From company website. IMT Manesar. <http://apparelresources. Plot No.000 square feet. BASIC PROFILE6 Legal Composition Sole proprietorship. 201. Okhla Industrial Area. phase -1 New Delhi 7. Modelama today has ten professionally run production units over 4. Vinita. Modelama places a great emphasis on technology as the secret to its success. Phase 1 Gurgaon 4. “Build Quality Rather Than Check The Quality. phase -1 New Delhi 8. B-57. Lalit Gulati as a family-run operation. owner is Mr. Gurgaon1 6. B-26. In 1999.5 III. 5 From website. B-80.000 square feet. Okhla Industrial Area.asp?msg=2710&cod=newsindetail&nam=>. Phase 1 Gurgaon 3. Sector-5. Modelama professionalized its management structure and has been consistently upgrading technology in their production facilities. Other production sites in untranslated Hindi document. phase -1 10. 200. 184.” Apparel Resources.00. Lalit Gulati. B-33. 7 & 8. BRIEF HISTORY Modelama was founded in 1979 by Mr. In the first year they exported Rs. and Pandey. From company website. 45 lakhs with 50 indigenous sewing machines and a workspace of 4.

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

3cr.5cr. 2800/per month. FINANCIALS Turnover 70 Turnover (millions USD) 60 60 50 40 30 20 10 0 1981 1985 1990 1995 2000 2002 2005 projected 15 0.000 per year 25. 3000/per month Rs.000 30% Rs.5 2 3 5 30 Other Financials7 2003 2004 Total Sales 180 crores 180 cr % of output exported 100% 100% Profits 15% 15% Capital employed 2. 500 500 450 60% 40% 150. VA per employee 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. 500 Rs. 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. 7 ICRIER Data (based on an interview at B-57 Okhla Industrial Area plant in Fall 2005) Page 27 . No.IV. Rs.

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

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

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

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

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

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

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

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

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

The remaining woven and all knit production sites are located in Bangalore. Sector 28. the company website. Manicandan’s CEC report. Divisional Manager of Marketing Mobile: 93-13369269 E-mail: ajay. Giri. Tel: +91-129-2273970/80 Fax: +91-129-2273485/91 E-Mail: seh@vsnl.com Head Office Bangalore Belandur Gate. Two or three other units are in Delhi (Noida) and a fabric processing unit.khanna@shahi. and G.co.com Production Units: Plot No. Page 37 . 1.2. business articles. Shahi Export House has a total of eighteen manufacturing units.in Ajay Khanna. Senior Management Ashok Raman.in Head Office Faridabad23 Industrial Plot 1.shahiindia.24 23 Unit visited by the researcher. II. the owner of the company. The information in the following company report was primarily obtained from interviews with the General and Divisional Managers of Marketing. Sector 28 Faridabad 121008. Haryana. Faridabad. Karnataka Tel: +91-80-28439214/15 Fax: +91-80-28439356 E-mail: shahiblr@vsnl. is in Ghaziabad. SHAHI EXPORT HOUSE PVT. I. is former vice chairman of the Apparel Exports Promotion Council of India. BRIEF HISTORY Incorporated in 1974 in Delhi. Palmprint Textile. General Manager of Marketing Mobile: 98-18212505 E-mail: ashok.D.raman@shahi. CONTACT INFORMATION Contact People J. LTD.com Website: www. Harish Ahuja.co. Sarjapur Main Road Bangalore 560034.

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

2.8 million 2. 28 Fashion Newsletter.033-$0. 2005 <www. No.5 USD. Turnover estimates varied by tens of millions of dollars between the GM and the Divisional Manager of Marketing. 30 These figures were estimated by the Divisional Manager of Marketing in the space of 5-10 minutes.pdf/$FILE/Fashion_News_05_02_en2_Webb. though generally it is four to seven times the unit price of the garment.11 $0.65 $0.30 $0. FINANCIALS Turnover $140 million 2005-200627 $120 million 2004-200528 $90 million 2003-200429 Other Financials Breakdown of Sales Revenue30 Est USD 2006 70 million 16. 31 Based on the company’s average unit price of $6. Page 39 . It can be none or most of the unit price.com/www/resource. so figures cannot be considered accurate. accessed July 2006.lawson.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. Percent of sales is based on an average estimate given by the Divisional Manager of Marketing.25 $0.8-23.07 $0.Awards Wal-Mart International Supplier of the Year 2000 (can’t read others) IV.4 million 2.78-$1.pdf>.65 Material Cost Labor Trims and Packing Depreciation Machinery upkeep Overhead Embellishments32 Profit 27 Estimated by General Manager of Marketing.13 $0. so they can only be thought of as a rough approximation. Did not obtain average retail markup information.65-$1.13 $0. 32 Embellishment costs such as embroidery depends on style.8 million 14-28 million 1. 29 Estimated by General Manager of Marketing.nsf/pub/Fashion_News_05_02_en2_ Webb.

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

00040 Minimum wage is posted as follows: Category Wage (Rs. The workers get a fifteen-minute tea break between the start of work and their half-hour lunch break. and another fifteen-minute tea break between lunch and the end of their shift. when the first shift of workers were getting off.38 Wages As Estimated by Divisional Manager of Marketing39: Category Average Wage (Rs. 39 Stated that these numbers do not include ESI and PF. lower labor turnover. Manicandan’s CEC report. an increase in attendance. 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. 37 The researcher toured the factory around 5 pm. 40 G. 4200. and a decrease of waste in the cutting department. these benefits are additional. there was still a strong female presence in the factory./month) Unskilled helper 2200 Semi-skilled operator 3600 Skilled operator 6. This early shift seemed to be entirely female. However. Benefits of the incentive scheme include a 10% increase in productivity in past two years in the sewing department. Workers use their ID card to clock in and out of the factory. Manicandan’s CEC report says a supervisor with eight years experience makes Rs./month) Unskilled 2448 Semi-skilled 2558 Skilled 2708 Highly skilled 3008 36 Information from interview with the Divisional Manager of Marketing and the researcher’s observations. leaving male sewing operators and some female ones. Page 44 .000 Supervisors/Mid Mgmt 10. VII. the workers at this unit do not get a tea break. 38 According to G.have recently gone through major changes in their implementation.

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

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

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

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

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

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

50 1. costs.A.6 million 10 $0.57 V. 54 These figures were estimated by the Managing Director in the space of 5-10 minutes. Malaysia) Europe 53 Financials. 55 Based on the company’s average unit price of $5 USD. BRAND INFORMATION Jyoti's Export Market % of Sales U. so they can only be thought of as a rough approximation. which accounts for the inconsistencies.555 USD)53 Breakdown of Sales Revenue54 Est USD 2006 Per % Retail Garment55 Price56 Material Cost 9.6-2. 57 Since Jyoti’s unit prices are mostly FOB. Page 51 .50 1. 56 Average retail markup is four ($20) to six ($30) times the unit price of the garment. on average.000 (15.5% Other Manufacturing 1.50 1. and cannot be used as an indicator of profit. excluding the $12 million USD figure from the company profile. this figure includes the amount the MNC spends on shipping. duty.3 million 60 $3 10-15% Labor 1.5% Subcontracting Cost 1.5% Overhead and profit 1.IV. were estimated by the Managing Director on two different occasions.6-2. retain 75-84% of the sale of a retail item. etc.5% MNC’s that source from Jyoti.6 million 10 $0. Latin America. Japan.6 million 10 $0.6-2. FINANCIALS Turnover 12 million USD (either 2003 or 2004) Current year 18 million USD Other Financials Current year sales Rs.000. 700.6-2. 10% 50% 40% Others (Canada.S.50 1.6 million 10 $0.

four are 1.000 square meters. Did not mention any direct relationships.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.000 square meters.000 square feet of land spread over ten different areas (including the registered office. VI. Prices and other sourcing details are negotiated through the buying agencies. but later stated that overall they have remained stable. primarily through the Triburg buying agency. which is not a production facility). 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. he stated that unit prices have decreased about 10%. It is notable that Jyoti subcontracts to a Shahi processing facility. but they do subcontract their fabric sourcing and processing. Page 52 . Subcontracting has not changed since quota phase-out. the company has about 20. INFRASTRUCTURE Company has nine production facilities. Two of the factories are 2. and two are 600 square meters. and Gloria Vanderbilt through buying agencies.58 Production System 58 See Standard Operating Procedures for detailed subcontracting information.000 square meters. one is 8. Subcontracting Jyoti does not subcontract the production process. American Eagle.

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

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

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

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

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

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

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

with one woven garments manufacturing unit in Delhi. Udyog Vihar. BRIEF HISTORY68 Vijay Uppal. 25172437. Manicandan’s CEC report. Phase I. Gurgaon 4. 236. Gurgaon 2. Udyog Vihar. 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. 192. Gurgaon. Udyog Vihar. 69 From an interview with the General Manager of Operations. and ironmongery. Udyog Vihar. Gurgaon 8. Phase IV. 225.69 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. Udyog Vihar. Udyog Vihar. 479. Phase I. Gurgaon67 6. Gurgaon 5. Udyog Vihar. Phase III. General Manager of Operations 236 Udyog Vihar Phase-I. New Delhi 2. Phase I. I. in 1977. B-108. 239. and G. 25172438 Fax: +91-11-25451549. 68 According to the company website. Gurgaon 7.110015 (India) Tel: +91-11-25431408. G International was established in 1983 in Delhi and 1996 in Gurgaon. the current Chairman. including: 1. Phase I. and Bangalore. 66 According to company website. Gurgaon. New Delhi . Phase-I. 25454895 Contact person: Padam Vaish. Gurgaon 3. black iron. II. CONTACT INFORMATION65 Registered Office: 2/2. including: 1. 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. 133.4. 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 III. Mayapuri Industrial Area. Ware Housing Scheme Kriti Nagar. incorporated R and Co. Udyog Vihar. 208. Phase-I Gurgaon The company profiled has over ten manufacturing units. 67 Unit visited by the researcher. 506. Noida. Phase III. aluminum hardware. an interview with a General Manager of Operations. Udyog Vihar. Page 60 . 151.

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

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

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

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

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

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

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

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

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

com/articleshow/1690384.9 per cent to Rs 159. 29 June 2006. Pearl announced a dividend of 30 per cent for the year [subject to shareholders’ approval].5 crore in the previous year.89 Other Financials “Pearl Global posted 88 per cent year-on-year increase in net profit in 2005-06 to Rs . New Trading Ring. 89 From an interview with the Company Secretary. Ahmedabad .indiatimes. Stock Exchanges where the securities are listed: 1. 3.com/1060712/asp/business/story_6465123.380015 87 88 From Chairman’s Message on company website. Rotunda Building.43 crore[ from Rs.cms> and “Corporate Briefs: Pearl Global. J. G-Block Bandra – Kurla Complex Bandra (E) Mumbai – 400 051 4. 90 “Pearl Global net up 88%.” “The company’s operating profit was Rs 17.telegraphindia. National Stock Exchange of India Limited Exchange Plaza. The Delhi Stock Exchange Association Limited (Regional Stock Exchange) DSE House 3/1 Asaf Ali Road New Delhi . 5th Floor Plot No.asp>.87 $400 million in its worldwide operations post quota phase-out.400 001. Ahmedabad Stock Exchange Limited Kamdhenu Complex Opp.88 Net profits are 234% up.5 crore [from 120.6.IV. Towers.1 crore compared with Rs 7.” <http://www. Page 70 .41 crore in 2004-05].110 002 2.” The Economic Times: Garments/Textiles.9 crore in the previous fiscal]. FINANCIALS Turnover $200 million worldwide before quota phase-out. P. 3. 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.”90 See website for detailed financials. Dalal Street Mumbai . Sahajanand College Panjarapole. The revenue of the company during the year was up 31.C/1. Babson College press release. <http://economictimes.

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

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

Design/Sampling and Product Development Designs are mostly developed in-house. Production Capacity Pearl Global has 20 million pieces in-house capacity and 120 million pieces capacity all across Asia. They have six design factories. Production System Pearl Global uses an assembly line system. 90 incl. 50% FOB. who then chooses or modifies the styles. INFRASTRUCTURE92 Pearl Global has five or six production facilities in India. They are working on doubling their capacity in the next 2-3 years. A few years ago the delivery/production cycle had to begin 18 months in advance. Every stage of the production line has its 92 From an interview with the Chief Finance Officer. India: Unit Prices (paid to factory per piece of garment supplied) Range Average Retail Delivery Time Type India U. Markup (days) High of $10 $6-7 USD 3 to 4 times 60 to manufacture. which are shown to buyers in advance. but it mostly in-house.S.S. but now they have developed direct relationships with their long-term business partners. two of which are in Bangladesh. VI. yarns. 5% freight. Sometimes designers from the UK and the U. Page 73 .Buying Agency or Direct They used to contract through buying agencies. and one in China. The House of Pearl’s research and design department prepares a collection of high fashion styles for each season. The House of Pearl has over 150 factories across Asia. Pearl Global uses labor contractors. are consulted to developed in-house patterns. dyes and chemical are thoroughly checked before they are fed into the manufacturing process. The embroidery tailors either come into the facilities to perform the work or they send it. Pearl Global then manufactures the style. Subcontracting Sometimes Pearl Global subcontracts hand embroidery. one in Chennai and the others in Gurgaon. one in Indonesia. Quality Control Raw material including fibres. now it is 6 months. 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.

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

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

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

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

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

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

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

15000 plus a small portion of the profit (Rs. Liz Claiborne sent an American technician to help Orient with worker training and modernization. The first Gurgaon plant was established in 1993. and that plant is still there.000. The first plant in Maruti Industrail complex was the first plant in India that was over 80. and others. he was able to observe fashion trends and the kind of things that were selling. he decided to break into the industry. 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. ASSOCHAM. you had to be a tailor to be in the garment industry. CMAI. not just in the limited Indian context. he estimated a production capacity of about 150.000 pieces and an annual turnover of around $40-50. When his friend repaid him the Rs. with 1800 people. when he got back to India.htm>. Then while in Germany. And being a tailor is like being a janitor.000 sq. 6000 ~ $133). he hired more people. Then after a few years.A. and he rented a house. During this traveling.”107 Biography for Sudhir Dhingra for the International Fashion Technology Forum. Dhingra states that others followed Orient Craft’s example.niftindia. yards and outsourced actual manufacturing. not like today.A.com/iftf. Both were wholesalers who sold to specialty stores. though he stated that it was difficult to actually get the money from the government. <http://www. May 2006. Dhingra wanted to improve the standards of quality and infrastructure to globally competitive standards. with 3500 people. found another buyer. CIAE. he also encountered some buyers. 200-300 people. In the 1990s Dhingra set up a bigger plant with 100 machines. then consolidated supply chain into one roof. National Institute of Fashion Technology. Then. Orient got clients by word-of-mouth from their L.” His father gave him one year to start up business. they’re looked down upon. Orient’s first factory was established in a village in Hauz Marg and it is still there. 107 Page 81 . set up a pressing line on the dining table and the production line in the garage. they’re not looked up to. Orient subcontracted until the early 80s. 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. ft. “At the time. the Indian-inspired fad went away and he had to spend six to seven months traveling to get rid of inventory stock. Dhingra “is also Executive Member of the Advisory Committee of AEPC and an active member of reputed associations such as FICCI.” Dhingra wanted to move production out of the village and industrialize the area and put as many skills in-house as possible. only now it is 136. and Germany buyers. with more than 350 modernized factories. CII.shipped them to London. During the first few years.000 sq ft. During his traveling. as Gurgaon is the single largest manufacturing sector in India. and restarted business with a trial order of 1200 pieces for a customer in L. In the mid 1980s. he obtained a factory processing site of 240 sq. When he returned.

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

despite more competitive pricing.02-0.08-0.” BBC News.stm>.5 million % of Sales 50-60 12-15 12-15 10 Per Garment110 $5. 110 Based on the company’s average unit price of $10 USD.20-1. “Winners and losers in textile shake-up.02-0.50 $1. 4 per unit. 112 Overhead (mostly energy.5-99 million 19.S. BRAND INFORMATION Orient Craft's Export Market 5% 15% U.20-1. Europe 80% Canada 108 Basu.03 0.8-24. so they can only be thought of as a rough approximation. Kaushik. <http://news.00 % Retail Price111 0.00 $1. now it is Rs. Breakdown of Sales Revenue109 Est USD 2006 Material Cost Labor Overhead112 Profit (target)113 82. 111 Average retail markup is five to six times the unit price of the garment.8-24.A.02 V.8 million 19.IV.12 0. which has doubled in a year and a half-as mentioned by NITRA president-used to be Rs.bbc.8 million 16. 109 These figures were estimated by the Managing Director in the space of 5 minutes.00-6.co. 9 per unit) 113 Dhingra stated that Orient usually ends up with half of the target profit.uk/2/hi/south_asia/4294679. Page 83 .03 0. 742 crores) Other Financials Last years profit was $8 million (40 crores).50 $1. FINANCIALS Turnover FOB USD $105 million for 2002-2003 FOB USD $118 million for 2004-2005108 FOB USD $165 million for 2005-2006 (Rs. 2 March 2005.

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

Orient has put a lot of human resources into product development and now boasts 900 product development personnel at 5 different locations. even a little bit before.000 pieces. Production System Orient Craft uses an assembly line system. chiffon to denims and outerwear).121 The average order size is 10-12. and creates new designs for each season. which was at the time the “single largest multi-product manufacturing plant in the whole of India. 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.000 woven per month.000sq. product development became the key thing that most Western companies were looking for. gives feedback. <http://www. though it does use labor contractors. as traveling became restricted and Indian companies needed to build a competitive advantage.S. sometimes 25-45. INFRASTRUCTURE Company has 21 production facilities. Orient also deals in some very small volume orders for high-end buyers like Oil Lily. Orient has a display store in NY on Park Avenue that it opened up 3 yrs ago. As Dhingra stated. after 9/11. National Institute of Fashion Technology.000 pieces. Sector 37. and employed 5000 people. and one large plant is located in Noida. 13. Orient has created a niche with their diversified product line (mostly cotton/knits or wovens. of which four are in Delhi. It picks up fashion from around the globe. 121 According to an interview with the Managing Director.000 knitted per month119 2006: More than 125.117 Previously. in 2003.”118 Subcontracting Orient does not appear to subcontract. Haryana. May 2006.000 woven per month. whose samples are then sent to potential buyers. Production Capacity 2002-2003: 480. ft. companies. Udyog Vihar.000 or even 100. ft. In 2003 Orient established a manufacturing complex of 340. six in Gurgaon. the company had only 17 production facilities spread over 600. (unclear if it is the same facility visited) at the cost of over $10 million USD. 117 118 Plot No.htm>.000 sq. Gurgaon. 1.niftindia.000 sq.com/iftf. 119 According to the company profile.200. but other fabric from silk. Page 85 . Orient makes 130. 720. in and around Delhi. 120 Biography for Sudhir Dhingra for the International Fashion Technology Forum.000 pieces and production capacity has grown at least 25% over the past year.000 per day120 2006: In an average day. Khansa Road. ft. The second plant visited was 380.000 knitted per month 2005-2006: 720. According to the company profile.VI.

consisted of 12 production managers each in charge of about 250 workers (tailors and helpers) at 100 machines with 12 line supervisors. the workers are skilled and come from a tailoring background and are usually from UP. Manicandan’s CEC report and could vary factory to factory. Manicandan’s CEC report. MP and some from Haryana.Quality Control The company has in-house lab testing for garments. However according to G. According to Dhingra the “girls” in the South are operators and less skilled.” 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.” Dhingra stated that 70% of Orient’s workforce is direct employment. WORKING CONDITIONS The workers are 80% male and since Delhi and Orient is mostly multiproduct. and since Orient produces high-end clothing with lots of embellishments. workers do not go to lunch at the same time.000 Machinery Orient has in-house computerized embroidery machines. Approximate number of workers in all facilities Number of people employed in 2002-2003: 12. Bihar. trousers. one facility’s production department. with very little embellishment. Information on work timings was taken from G. In 2002-2003.000 in-house Number of people employed in 2006: 23. Manicandan’s CEC report. fabrics. washing plants and dry cleaning units. shirts. not through a labor contractor. which is generally equal in size to the production department. who manufactures 80-90% jackets/ outerwear. they “can’t be like Golkadas. Productivity Schemes Orient uses incentive schemes to reduce absenteeism and has implemented worker welfare schemes. According to G. The labs are equipped to test for all parameters including color fastness to light. the company had 7300 sewing machines. VII. Page 86 . and trims. “most of the permanent employees are supervisors and perform high-end work such as production in-charge and finishing in-charge. Departments No information on specific departments was obtained through the interview. More contract workers and women (especially thread-cutting) are in the finishing department.

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

Maruti Industrial Complex unit). ten years ago we had 5000 people. This strategy effectively stops any attempt to consolidate workers towards creating a Trade Union. Twenty years ago we had over 1000 workers.000 and Orient spent $20.it’s not just about the bottom line. and Surendar. Thirty years ago we employed a women who worked as a thread-cutter and got paid Rs. sometimes more than their husbands. GAP gave Orient $35. <http://www. they feel very proud to bring in income. However upon further inquiry.”123 According to G. Although Dhingra stressed how this was all for the benefit of the women and the community. According to Dhingra. Clusters are reinventing themselves. and that Orient pays in full for the schooling of female children of workers and for 65% of the schooling of male children.000 building a community welfare center that provides medical care for community members. Now she is a finishing manager and gets 123 Rajshekar. Punishments are given to workers without any formalized procedure. The “village panchayat said that Muslim women can’t go out…but now that they are trained. There is no grievance policy procedure in place for complains against workers or management. Since then the company started sourcing their manpower from labour contractor[s]. But the management suppressed and ousted all the workers who [were] involved in the establishment of a Trade Union. stating that he would forward the company’s code of conduct and a list of their worker committees through his personal secretary. According to G. Manicandan’s CEC report.com/apr0504/coverstory01. no sexual harassment committees and workers are not involved in wage negotiations or target setting. Manicandan’s CEC report. now we have 23. But will we be ready in time?” Businessworld. Global players are looking for India bases.[worker] strikes. ‘my husband doesn’t beat me anymore. no formalized dismissal procedure. “Preparing for 2005: Dressing up for the party. 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. it would be people. Orient had no worker committees at the facility visited.000. Sector-18.’” They built a four story structure to house the embroidery tailors. T. workers are fired with no redress. it’s about what we can do for the community. 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. he stated that such information was confidential and would hurt Orient’s competitive advantage. I have always been very people-centric-.asp>. One woman told me.” Worker Committees/Grievance Policy/Dismissal Procedure Dhingra was reluctant to give specific information regarding worker committees in person. “if someone asked me what my one single reason for success. and if a manager finds a worker guilty of an infraction.businessworldindia. Orient also helped train 300 women from the nearby village in hand embroidery at international standards. M. Page 88 . “around five years ago there was an attempt to establish a trade union (at the 7-D. Some of our workers are second-generation workers. 400 per month.

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

000 crore. Bangladesh and Pakistan. The company’s management is also planning to raise an IPO later this year. of which China contributes one-sixth. 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. 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. “Indian textile companies on acquisition spree. <http://www. 125 Jha.5%. Mr Dhingra estimates the annual turnover to be in the excess of Rs 800 crore.124 The machinery from the newly acquired plant will form part of the company’s expansion plan at Manesar. Ironically it is the same Indian companies who are buying the units for their machines. Kumar.00.indiatimes.” Industrial Economist: Textiles Report. Since the quota system has been reimposed on China. it is important to have machinery comparing to global standards. as they need to grow the base of buyers and price is a compelling reason to do that. In the changed business scenario. Mayur Shekhar. World over. “Garment exporter Orient Craft buys Levi’s plant in Spain for Rs 60 cr. Noida and Okhla in Delhi.3 million dollar)…Orient Craft by its own admission acquired the unit because of its superior machinery content. INDUSTRY COMMENTS Orient recently bought a Levi’s plant in Spain for its technology.” said Mr Dhingra.com/articleshow/msid-1232753.125 124 Dipankar.cms>. Orient has 20 production units spread across Gurgaon. <http://economictimes. 16 September 2005. The expansion plan envisages setting up of two new facilities at Manesar. India is in an advantageous position. the garment industry presently stands at approximately Rs 15. (despite quota regulations) and India adds to a minuscule 1. The company’s deal with Levi’s is the second such significant international venture. From business articles: The company… acquired a Levis unit in Spain in mid 2005 for Rs 60 crore (approximately 13. India’s lack of worldclass machinery producers domestically has seen a lot of companies look to the West for help. However.com/30thjune06p4.bring in buyers. and aims to increase it to over 40 lakh units after the expansion.curpg-1. growing by over onefourth from last year. X. The company expects the expansion plans to boost its revenue generation. At present.htm>.indeconomist. Orient Craft manufactures and exports about 30 lakh units of garment every month. Orient came up on the global radar when it started its first overseas facility in New York two years ago. As of now.” Times News Network. PTI Economic Service. Page 90 . The company has since then stripped the Spain unit of its machinery and fitted them in its plant here at Gurgaon. near Gurgaon…Levi’s was looking for a buyer due to high maintenance and labour costs in Spain. buyers are getting increasingly quality conscious. India.

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

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