Based out of Bengaluru in India, Krishna Lamicoat Pvt. Ltd., is one of the foremost producers of specialty papers and films for the garment industry, both in terms of quantity and quality and is a well-established name across global apparel manufacturing destinations – from Bangladesh to Tunisia.
Started by the visionary Amar Chhajer with the right balance of technical expertise, business acumen and an in-born spirit of discovery based on a strong foundation of honesty and innovation, Krishna Lamicoat Pvt. Ltd., has come of the age from its one-room existence to what it is today – the largest supplier amongst the SAARC nations even as it sets its sight to dominate the world market.
What’s more, recognising the potential to create and deliver specialty products for this rapidly growing industry, Krishna Lamicoat worked closely with CAD/CAM developers like Lectra (France) and Gerber Technologies (USA), to develop the right machinery and products and thus came into being Krishna Lamicoat Specialty Papers and Films (established in 1997).
Further, keeping true to its dynamic spirit, the company also expanded into the realm of accessories and today provides readymade BIAS and straight-cut fabric as well as waistbands and other accessory items.
Apparel Resources (AR) caught up with the dynamic Ashok Chhajer, the Director of Krishna Lamicoat Pvt. Ltd., in Dhaka recently on the sidelines of an event to know his thoughts and views on the Bangladesh garment industry, how Krishna Lamicoat is gearing up to serve it better, its way of differentiating from the others, not to mention getting to know some inimitable business insights that have over the years helped Krishna Lamicoat to grow and develop into a name to reckon with today.
Here are the highlights of the exhaustive interaction with the dynamic Director of Krishna Lamicoat.
AR: How do you see the apparel market shaping up post-pandemic?
Ashok Chhajer: The market is very fluid at the moment and there isn’t much of stability so as to say since sentiments are down. However, after May-June this year, I feel the market will pick up again.
During the Covid-19 pandemic, people had stopped buying and once it got over, they were on a buying spree, so sales went up but sales are slow again now as brands and retailers are sitting on stocks, which they want to clear first. Everyone wants to play safe, especially amidst rumours of a probable wave of the pandemic, more so considering in light of what had happened in China recently (fresh breakout of Coronavirus).
I feel there is a kind of fear psychosis, which is driving the market and it might last for another 2-3 months. All these developments in some way or the other have impacted the garment industry, which is in the midst of a sort of turmoil even if many big companies are said to be struggling with work orders.
AR: Coronavirus has sort of impacted everyone in some way or the other; what about Krishna Lamicoat?
Ashok Chhajer: The pandemic has been a blessing in disguise for us and I will tell why. Most businesses had nothing much to do during the pandemic even as they looked at ways to cut cost wherever possible. This gave us an ideal opportunity to talk to our clients, educate and explain things to them which could help them save money.
It also gave us time to think, look at areas of opportunities, iron out bottlenecks, fine-tune things and consolidate our operations for optimal results.
AR: Bangladesh is a very important player in apparel manufacturing and exports globally. What significance does it hold from Krishna Lamicoat’s perspective?
Ashok Chhajer: It is one of the principal focus markets for us and I am sure Bangladesh will continue to be a major market for another 5-10 years at the least. Today, Bangladesh’s apparel exports stand somewhere around US $ 47 billion and they plan to take it to US $ 100 billion by 2030, so you can very well understand the opportunities that are on offer.
Conversely, China, which is still the number one globally in terms of production and export capacities, is losing ground as its focus has now shifted from apparel to other sectors as it looks to move up the value chain.
Even, Vietnam, which at one point in time looked like a big threat to Bangladesh, has lost some of its sheen lately.
Another big factor behind Bangladesh’s mercurial rise and its growth prospect is buyers’ unwavering faith in Bangladesh, after all the country as a whole is dependent on the apparel industry even as 80 per cent of its GDP comes from the apparel sector. It is the bloodline of the country’s economy.
Besides, Bangladesh, which earlier used to cater to only the lower segments, has slowly come to cater to the mid to upper-mid segments as it continues to evolve and grow.
AR: Any particular challenge that you would like to talk about?
Ashok Chhajer: There is around 57 per cent of import duty on paper and the best part is that if India imports from Bangladesh, it is duty-free. Also, as we are considering to set up a bonded warehouse, we are faced with all new challenges as you might be knowing there are some strict restrictions in place like if we set up warehouse in a particular economic zone, we can only supply to those who are within it and not to anyone out of it.
AR: Why don’t start a manufacturing unit instead?
Ashok Chhajer: This will not make much of a business sense as the quality of raw materials available here are not up to the mark and we are very particular about our quality and standards. Besides, if we have to import raw materials, it’ll still not work out due to the additional duty that we have to pay on imports.
AR: Any goals in terms of growth that you have set for Krishna Lamicoat in Bangladesh?
Ashok Chhajer: We are looking at doubling our business here and we have set a timeline of one year to do so. I am of the opinion that unless you are not doubling every year, you are wasting your time as business normally grows by around 15 per cent – 20 per cent anyways, so one needs to set a little more challenging target.
AR: Given the price-sensitive nature of the industry, don’t you think Chinese players have an advantage over others?
Ashok Chhajer: Today, Chinese products would be more expensive than ours. However, compared to those offered by the local players, in plain sight, our product might look like 3-5 per cent expensive but when you take into account the wastage percentage, ours would be 10 per cent cheaper overall.
Today, in spite of Bangladesh having 7-8 players in the product categories that we are into, they haven’t been able to establish the right quality of products (especially perforated paper). The quality and consistency of the holes are just not right and this is primarily because the equipment they are using are mostly from China.
Chinese equipment, as is very well known, works perfectly initially say for about 6 months to one year and then you can see deterioration in terms of the quality of products that they churn out and since by then one must have already invested in the machines, there’s little scope for course correction.
This is where we are able to stand out in the competition, thanks to the quality of our equipment/machines, reflection of which is aptly seen in our product offerings.
With the local producers, the quality of the paper and its binding quality is not at par and holes are inconsistent. This is one area where we are trying to educate the industry to use quality products. Also, there are some malpractices that one has to be careful about. In some cases, there is an understanding between the parties concerned and one doesn’t usually always get the exact volume of product (paper) they order, which does not happen when you buy from us.
Given the prevalent complexities, we are consciously now targeting the 10 per cent of top customers. In many countries, 20 per cent of the people are given 80 per cent of the business and 80 per cent are giving 20 per cent of the business, so we are targeting to be in the top 10 per cent. Of course this can be very challenging but once you make it there, things are not that difficult.
When you have that eagerness to grow you’ll find solutions and that is exactly what we are doing as we build smaller goals to achieve the bigger objective.
Innovation also plays a very important role in business. For most of the garment makers, paper is one such product they think about the least as there are vital raw materials to take care of while making garments. In the process what happens is that they are mostly late in ordering papers, which at the end of the day impacts their delivery time. To tackle this situation, we study the usage pattern of each of our clients based on which we keep ready stocks for them so that even if they order late, we are still able to ship them on time. This has not only helped us serve the clients better but also helped us form a unique bond with them.