Perfect Sourcing

COVER STORY

♦JAIPUR A PROGRESSIVE CLUSTER

→Collectively Defying The Tough Times

→Latest Technology Adopted To Attain Excellence In Exports

→New Apparel Parks To Create Jobs And Organise Sector

→GEAR Stands United In Difficult Times, Highlights Strategies To Move Ahead



With more than 400 units and an annual turnover of around Rs 5000 cr (including both export and domestic garment manufacturing), Jaipur has come a long way by any definition. Jaipur, the capital of Rajasthan, founded by Maharaja Sawai Jai Singh II on November 18, 1727 is no longer a cluster for getting printing and dyeing work; in fact, it has already attained the status of an international manufacturing cluster supplying to hundreds of brands, both international and national.

There is a huge demand for Indian textiles in the foreign market and Jaipur has been serving the need of readymade garments like a 'Boss' from a long time now. Availability of raw materials is abundant and skilled workmanship has contributed the most to the success of this industry. This has put Jaipur in the limelight and investors are seeing it as a lucrative option for investment.

Over the years, international buyers like Zara, Mango, Macy’s, Carrefour, New Look, Miss Selfridges and K-mart, among others, have started sourcing from Jaipur. While Japan still remains the most important buyer for most of the players, many new buyers have from places like Australia, New Zealand, Russia and the Middle East markets have started approaching manufacturers in Jaipur, tacitly recognising their strengths in giving the best and innovative product range, especially hand work. Majorly known as a producer of printed, dyed fabric and tie & dye for fashion garment industry and Rajasthani prints of Bagru and Sanganer, manufacturers from Jaipur have achieved international recognition.

♦RIGHT INFRASTRUCTURE BACKING JAIPUR

Jaipur has well-developed social, physical and industrial infrastructure as well as good virtual connectivity. A majority of these factories are located in designated Industrial Areas and Export Promotional Industrial Parks (EPIP) resulting in professional and systematic working. The State Government has a very proactive approach towards industrial, infrastructure and overall development. New units are coming up in and around Jaipur. Good roads and highways connecting with Jaipur along with proximity to an airport have given a good boost to this cluster’s growth. Buyers find it an attractive and entertaining location, where they can source while browsing through some of the best tourist options. The international airport of Jaipur is already handling a lot of air traffic from places like Singapore, UK, Malaysia, Thailand and more.

Jaipur has a population of approximately 2.3 million. It is well connected by road and rail to Delhi International airport for air shipments and Mumbai port for sea shipments. For movement of cargo, there are Inland Container Depots at Jaipur, Jodhpur, Bhiwadi, Kota and Bhilwara. Concor (Container Corporation of India Ltd.), which already operates three of these terminals, is coming up with another one near Udaipur.

♦LATEST TECHNOLOGY & IN-HOUSE FACILITIES BECOMING A NORM

Companies located in and around Jaipur have, over the years, taken technology very seriously and have invested in adopting advanced and highly sophisticated ‘cut to pack’ facilities, with latest machinery from reputed companies like Juki, Brother, Pegasus, Kansai, Hashima, Barudan, SWF, Gerber, Optitex, etc. The Jaipur-based Garment Exporters Association of Rajasthan (GEAR) is a regular visitor at national and international machinery exhibitions and is always on the lookout for latest advancements so that efficiency,productivity and quality in every single piece can be obtained. As compared to the last few years, the dependence on job work and outsourcing for activities like dyeing, embroidery, printing and finishing is reducing as exporters want to accommodate most of the facilities inhouse to exercise proper control on quality, delivery and efficiency.

Recently a lot of demand has also been seen for latest designs in embroidery and thus many manufacturers are working towards offering superior design capabilities through the use of embroidery, hand embellishment by bead and sequins as well as lace and patch work. In fact, many players have gone ahead and have installed multi-head embroidery machines at their units, which was earlier available mainly through Job work. The number of installations in the region has increased substantially and machinery suppliers anticipate good business from the cluster in times to come. Apart from regular sewing machines, automatic machinery for finishing, button marking and the latest digital printing machines are also seeing demand for Jaipur and nearby areas.

♦PRODUCT RANGE

Mainly known for women’s wear, Jaipur is fast evolving as hub for kids’ and ladies’ garments. Manufacturers are doing diverse products ranging from ladies’ blouses, skirts, tops, gowns, tunics, jackets in both woven and knitted fabrics. Experimentation with a variety of fabrics is also seen and garments made of cotton, blends, viscose, voiles, crepes, georgette, chiffons, velvet, jacquard, dobby, linens, cotton jersey, viscose jersey, mélange, etc., are sourced. Although manufacturing is being done in almost all areas of Jaipur, Sitapura area is one of the main regions.

♦COMPLIANCE- GAINING IMPORTANCE

With increasing awareness about compliance and safety in manufacturing, a number of units are now working on setting up fully compliant units. Companies are investing for the future and are working on getting certification likes WRAP, BSCI, Sedex, ISO 9001:2008, etc., which are defined requirements to associate with international brands.

♦ COST EFFECTIVENESS & FLEXIBLILITY: THE USP

Cost effectiveness has been one of the biggest advantages since the city is not a metro. Manufacturers here are considered to be more cost effective in production due to the lower cost of resources which ultimately results in lower overheads and better prices for customers. This is a major reason why almost all renowned retail chains from India like Lifestyle, Reliance Trends, Pantaloons,Westside and several others are sourcing a major portion of merchandise from Jaipur. Most buyers who source from Jaipur feel that the best part about Jaipur is that the exporters here are flexible and attend even if they have small order quantities. Companies are doing small order quantities per style to meet the demand of boutique and high value customers.

♦AVAILABILITY OF LABOUR

The garment manufacturing industry has been flourishing in the state for more than 35 years and therefore a trained pool of manpower is now available. Youngsters in the area are also inclined towards becoming part of the industry. The state has 1,050 colleges, including 80 engineering colleges, 58 polytechnic institutes and 846 industrial training institutes (ITIs). Jaipur is ranked 3rd in India in ‘Ease of Doing Business’ in a World Bank Report on India. As far as labour is concerned, labourers are readily available from nearby villages. The state also has adequate power. In the last few years a lot of labour has shifted to major towns like Delhi, Noida, Ahmedabad in a search for better facilities and pay. On an average, a worker easily gets around Rs 15,000 pm for stitching work for eight hours a day and a cutting master can earn upto Rs 20,000 pm in Jaipur. So the notion that Jaipur is cheap and non-efficient is just a phrase now. With the installation of latest technologies, compliant units, colleges and exporters working on design and quality, the antiquated thoughts about Jaipur have undergone a complete change.

♦UPCOMING PROJECTS IN JAIPUR TO GIVE SUPPORT TO APPAREL INDUSTRY

• Delhi-Mumbai Industrial Corridor (DMIC) is a mega infrastructure project of US$ 90 billion with financial & technical aid from Japan, covering an overall length of 1483 Km between the political capital and the business capital of India, i.e. Delhi and Mumbai. 39% of the project is based in Rajasthan, providing great connectivity to the state.

• Apparel Park in Jaipur to be on stream by March 2018, covering an area of 2000 sq m. An Apparel park in RIICO Industrial Area, Mahal Road, Jagatpura, under Mahal Yojana, Jagatpura, is in the pipeline in which only apparel/ garment units will be set up. 1-2 kms away from Akshay Patra, Jagatpura, Malviya Nagar, it is expected that the park will be operational by March 2018 and will house more than 200 garment units.

• 6 MW model solar power plant in Neemrana commissioned. India’s first 1 MW smart micro grid demonstration project (off-grid) that uses Japanese technology to integrate solar power with diesel generators to provide reliable green energy supply for industrial use, along with a 5MW model solar power plant, was inaugurated in Neemrana. The Neemrana Solar Power Project has been built by the Delhi Mumbai Industrial Corridor Development Corporation (DMICDC), in partnership with the Government of Japan.

♦INDUSTRY OPTIMISTIC ABOUT JAIPUR AS A FAST GROWING HUB

♦FEEDBACK FROM SOME EXPORTERS




M.K. Maheshwary, Sarc Originals.


The market is stable, there has not been much of up and down for exports. The domestic market is growing well and we all are planning to increase production for the same. We are setting up a new factory. The state government is taking good initiatives to help us and promote the industry but from policy to reality, the road is long. We are hopeful that those policies made in our favour would start working in times to come. I don’t cater to Japan at all and I feel most of us are being stereotyped. It is not like we only export to Japan and U.A.E., we have business relationship worldwide, be it through agents or direct tie up.



Market is stable but extremely price sensitive, especially after the implementation of GST, and we are facing huge challenges. To offer the same price as earlier to our client has become almost impossible due to the increase in production cost. As far as the market is concerned, there is a demand from both export and domestic markets and we are expecting good growth in the coming future.

Ankur Gupta, Shree Krishna Overseas .



At present, Jaipur is the most favourable destination for manufacturing on a comparative basis, as we don’t face labour issues. Also, the state government is helping us in promoting textile and garment manufacturing in the state. Manufacturing is cheap in Jaipur as compared to other cities. We have been manufacturing garments from a long time now and have always served the Japanese market. At the moment, the export market is suffering all over India and we are no exception; Regrettably, unfavourable taxation is hurting our competence and as a result we are losing business to Bangladesh and Vietnam. We fear that once the 7-8% Drawback input is removed by the government, business will suffer a lot. The domestic market on the other hand is growing better day by day, Reliance sources almost 30-40 lakh readymade garment pieces from our city and we are happy we can provide them the quality and quantity they demand. Most of the manufacturers have resorted to setting up new factories as part of their expansion policy and to increase production.

Amit Maheshwary, Partner, Somani Fabrics.



We are blessed with skilled labour, so even if labour wages increase, we will be happy to pay those who deserve it. The real problem is what most of us don’t talk about and discuss. It is not that the workforce doesn’t want to work and there is a scarcity of labour; in fact, it is the very poor transportation situation that compels them to quit their job. For example, if my factory is in Sitapura Phase 4, public transport drop off is available till Sitapura bus depot. It is a 2-3 km walk from there to our factory. And Jaipur can be hot! Hence they give up. The Garment Exporters Association of Rajasthan (GEAR) has tried to talk to the state government about this and we also believe if not the government, then the association will do something about it, like giving housing to these workers so that they can be peaceful and work comfortably. Otherwise, the market and demand is great and we expect good growth post the upcoming festive season.

Girdhar Mangtani, Shivani Nagar Palace.



There has been a lot of negative sentiment working behind business since the last few months, I won’t say business is running at a loss, but it is definitely in trouble. After the implementation of GST, buyers have refused to pay 18% GST. Shipments have got stuck but I am sure the market will slowly improve. Surprisingly, the domestic market is doing so well that many have diverged into the domestic market completely. Our association is very dear to us as we feel we have someone to listen to us and we have a platform to voice our grievances.

Sita Ram Sharma, Shree Dayal Exports.



When GST came into being, we started facing problems as any new regulation or law would create chaos for a while; things are, however, settling down now. Though my work is completely into export, I see the domestic market is growing a great deal. True that we have maximum business relationship with the US, Japan and UAE, but a lot of people are doing business with European buyers also. We mostly cater to the wholesalers and in the future, we see that brands will tie up with us too. GEAR is extremely helpful and we are happy to have such a compassionate association that stands by us through thick and thin.

Amit Panchal, Shree Radhe Garments



♦GEAR - Intensifies and Broadens Role in Improving Exports from Jaipur



Garment Exporters Association of Rajasthan (GEAR) was formed in 1978 with the help of fledgling Founder Members. The main aim was to promote export of Garments from Rajasthan since no such apex organisation existed at that time. Now there are around 270 Members, out of which 60% are life members. The members are exporting Readymade Garment all over the world. Over the last 26 years, the Association has been assiduously promoting exports by organising buyers-seller meets, trade exhibitions, Garment Fairs, etc., in its ceaseless endeavour to promote and expose Indian Garments to International markets for greater visibility and choice of products. There has been a gradual but forceful shift in concept and ideology over the past four decades. The current team headed by Ravi Poddar, MD Cheer Sagar, is more aggressive, dynamic and proactive, imbued with a common objective of making Jaipur an ideal destination for manufacturing garments. There is a lot of focus on transparency among fellow members on various issues like how to increase exports, tackling day to day problems, sourcing raw material and machines, adopting new technologies, holding regular seminars and discussion forums to identify and resolve problems, working on new markets, improving products and efficiency and much more. The closely knit group has openly realised that rather than resorting to internecine squabbling and competing with each other, it is far better to unite and fight for common causes and long term growth.

Their website is always updated, there are groups being formed amongst the members to help each other in challenging situations while also identifying fairs and exhibitions that can give a boost to their business.

Speaking exclusively to PERFECT SOURCING, Ravi Poddar, President, GEAR said, "Today, the Jaipur market is not export oriented per se, but serves as a major apparel manufacturing hub to both the export and domestic market. As an association, we have been working on areas that can accelerate growth and help us sail through the tough times being faced by the industry post demonetisation and GST.” He confirmed that Jaipur does business of approximately Rs 5000 cr every year (both exports and domestic) and most of the exporters are now into the domestic side of business also. “The industry has survived the recent tough times by falling back on the domestic market and now most companies are dependent on it with a share of 70: 30 in domestic versus export quantity,"shared Poddar. He also revealed that big chains like Reliance Retail are already sourcing a lot and plan to source almost 1cr garments from Jaipur every year.

He feels that Jaipur is no longer an outdated hub because it has some of the best factories with good turnover, product mix and buyers profile. Companies like H&M and Zara are also looking at Jaipur for sourcing and are doing sampling with many exporters. "We have the best of factories. We will shortly have a new apparel park which will house all garment units and is expected to be operational by March 2018. Buyers from countries like Brazil, Russia, Argentina and South America have shown interest which will give a major push to Jaipur in the coming times," he articulated.

Poddar however raised concern about increasing challenges like GST, low duty drawback rates and shifting of labour to other manufacturing destinations as this would cause trouble for existing units in Jaipur. "I have written to our CM that we should also think of some incentives or schemes like Jharkhand where the Govt is attracting investments by giving many advantages to its natives and people interested in investment," said Poddar.

Poddar feels that as exporters, they have to now market themselves in a more aggressive manner, travel a lot, meet buyers and understand them and their concerns and squeeze wherever they can so that profitability, which is being affected, can be worked upon. To offer more benefits to its members, GEAR has also tied up with Air India wherein they have agreed that members of association will use Air India’s service to travel. "We are now trying to work on discounted prices for air cargo from airlines so that the industry gets some benefit," said Aseem Singla, from Gear who also runs export house by the name Fashion Images Overseas. He also informed that as an association they are leaving no stone untouched and right from collective decisions regarding buying of machinery, paper work, GST, and sharing each other’s concern, the association is doing all. He shared, “Recently LOT was required as a paper and no one had any information on the same. So we went to the Ministry and obtained all required information. Then, as a service, we offered all our members the information we had collected about LOT and all help in getting through the paperwork and formalities related to it without harassment or wastage of time. This gesture was highly appreciated by other associations as well."

GEAR has been doing several seminars and discussion forums to educate its members about various topics of concern. “We aim at increasing transparency and cooperation,” added Poddar. The Gear team is now inviting young entrepreneurs to join them and take the business to newer heights with their knowledge and innovative ideas. The association recently had its Annual General Meeting, where they shared their concerns and future plans for the benefit of the industry at large.

♦Some of the top exporters in Jaipur

• CHEER SAGAR : Cheer Sagar an export house of ladies Readymade Garment since 1991,has recently won the "STATE AWARD FOR EXPORT EXCELLENCE". In past the company has also won "Special Recognition award" by the president in 1995-96.With Rs.4429.65 Lakh rupees export in the year 2014-15 this export house has set an example.

• Ahuja Overseas, a MSME unit run by Archanda Ahuja and her family that got into business in the year 1991 has been exporting to Poland, Turkey, Germany, Canada, South Arabia, Brazil, etc. The company has won State Award for Export Excellence in the woman entrepreneur category having exported readymade garments worth Rs.2090.00 lakhs in the year 2012-13.

• Traditional Gallery Pvt Ltd run by Dinesh Goyal won State Award for Export Excellence in for having exported readymade garment worth RS.2405.35 lakhs in the year 2012-13.

• Lodha Impex: LODHA IMPEX has been exporting readymade garments since 1993. The unit has track record of exporting largest quantity of cotton ladies garments of the Japanese market.




Ravi Poddar, President, GEAR


"Today Jaipur market is not export oriented but it caters as a major apparel manufacturing hub to both exports and domestic market. As an association we have been working on areas that can accelerate growth and help us sail through the tough times being faced by the industry post demonitisation and GST."




Aseem Singla, from Gear


"To offer more benefits to its members, GEAR has also tied up with Air India wherein they have agreed that members of association will use Air India’s service to travel. “We are now trying to work on discounted prices for air cargo from airlines so that the industry gets some benefit"