India May be the Next Asia Major in Garment Production
BANGALORE, India (FNS) -- As developed Asian countries such as Hong Kong, Taiwan and South Korea move away from labor-intensive garment production, industrialist-minded Indian garment manufacturers are preparing to pick up the extra...
BANGALORE, India (FNS) -- As developed Asian countries such as Hong Kong, Taiwan and South Korea move away from labor-intensive garment production, industrialist-minded Indian garment manufacturers are preparing to pick up the extra business.
India's total exports, $600 million in 1983, this year are expected to top $3.5 billion, making the country a serious player on the world garment scene. India's apparel exports to the U.S. alone last year came to $890 million -- excluding silks and most leather garments, according to figures compiled by the American Apparel Manufacturers Association. In comparison, China -- the number one foreign apparel supplier to the U.S. -- shipped $3.45 billion worth of apparel to the U.S. last year.
Despite India's long-held reputation for inconsistent quality, lack of responsible management, quota problems and increasingly high prices, a visit to any of the following operations might convince buyers to give the country another shot, or a first try.
Richa & Co., established in 1976 and based in an unmarked factory on the outskirts of New Delhi, possesses one of most impressive showrooms in town. The $23 million firm specializes in printed rayon, embroidery and beadwork, and lists Carole Little, Dillard's and Spiegel as clients.
"We can do 300,000 pieces monthly," said director Virender Uppal, "with a three-month lead time." Like many northern factories that grew haphazardly according to need, Richa's operations aren't under one roof; sampling, washing, pressing and packing are done at the main plant while cutting and stitching are done elsewhere. There are 1,700 workers.
Fabrics are almost all locally sourced to buyer-supplied designs. An embroidered rayon gypsy blouse costs $9 f.o.b. India, including quota. "We have so much past performance that we don't upcharge for quota," said Uppal. Minimums are generally 1,000 pieces in a style and color, although they can be negotiated down.
He admits to a lot of price competition from Indonesian rayon, but sees a very bright future. Foreign collaborators offering technical and management expertise, especially from the Far East, are particularly welcome. Bombay's Creative Garments, also established in 1976, has another impressive track record. "My first big client was Willi Smith," remembered president Vijay Agarwal, "who ordered $2,000 of Bombay policemen flared shorts." By the time Smith died in 1987, orders were up to $1 million a season.Creative Garments says it currently produces for The Limited, Lane Bryant, Betsey Johnson, Adolfo and Carol Horn and is one of the rare Indian factories to tackle constructed jackets. Last year's turnover of $18 million is expected to rise to $30 million this year. Agarwal and his brothers oversee nine factories, all equipped with imported sewing machines, including a new suit-and-blazer plant located in a tax-favored zone in nearby Daman.
Many of India's most enterprising and modern facilities are located around the southern cities of Madras and Bangalore, near the region's spinning and weaving operations. Gokaldas Images is the industry's pride and glory, consistently one of the country's top exporters with a 25 percent annual growth rate. More than 50 percent of last year's $35 million annual turnover reached a prime U.S. client list that it says included Liz Claiborne, Gap, Banana Republic and Bugle Boy.
Gokaldas Images's 15 factories are equipped with the latest in machinery and production-management techniques. Each unit handles a different product type, including coats, padded jackets, knitwear, swimwear and denim.
"Although we are currently the only company of such a scale," said managing director Jagadish Hinduja, "there are about 200 other companies in the region that are progressing in the same direction, diversifying products and well on their way to full-scale, modernized operations."
Hinduja is very clear about the kind of alliances he's looking for. "We're not particularly looking for financing, but rather tie-ups offering expertise in category types, which we lack. Ideally, the partner should offer an export market and equity participation to guarantee long-term commitment. We'll take care of domestic sales."
He cites the example of a recent venture between Marzotto of Italy, a Singapore group and a Delhi factory to produce suits for both export and local sales. "With a moderate investment of $3 million to $4 million, we could produce about 500 suits daily," he said. Both Creative and Gokaldas currently source knitted fabrics from Tiruppur, India's undisputed knitwear center located about 200 miles from Bangalore. From a modest $25 million in 1986, last year Tiruppur shipped an astonishing $700 million in knitwear exports and also supplied up to 90 percent of domestic production. But garment industrialists seeking to move into higher-value items feel shackled by Tiruppur's infrastructural limitations and transportation problems."We're planning to set up our own vertical operations -- spinning, knitting and processing -- here in Bangalore," said Hinduja. "For four tons daily, we anticipate a $6 million investment and about eight months startup time. Under current regulations, everything is relatively easy, except land acquisition. That would take about six months."
[Editor's Note: Attempts to confirm the business arrangements cited in this article with the U.S. firms involved were generally unsuccessful; either appropriate executives or information were unavailable. Among those responding, Nash International confirmed that Creative Garments was a resource for its licensed Adolfo International, Carol Horn Workshop and WillieWear sportswear lines. A spokeswoman for Spiegel said it had done business with Richa as recently as 1993, but at present had no production with the company.]
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