Most of the Indian garment exporters are working with proper know-how, similar infrastructure and same brands, but despite this similarity, only few of them are growing steadily and are geared up for further growth. What makes them different from others? It is their passion towards business, unique business strategy, risk taking ability, working culture, positive mindset or inclusiveness of all such factors that are helping to set a new benchmark.
Tirupur-based AKR Industries, one of the largest manufacturers and exporters of fleece-based garments having production facilities in 3 different states (Tamil Nadu, Karnataka and Andhra Pradesh), is one such growing company. Dealing in different and interesting garment categories, AKR Industries is currently doing a business of Rs. 450 crore and is aiming to achieve Rs. 1,000 crore in next 5 years. That’s big!
Logu, Managing Director of the company and a first-generation businessman from an agriculture family in a small village in the western part of Tamil Nadu, shares how his company is different and how he is confident to achieve this ambitious target by increasing his business twofold.
Constructing business, not buildings
“From day 1, our mind was clear that we will invest only in necessary segments. Since garment manufacturing is our core strength, whatever profit we made from the business was invested again in the same business majorly in advanced machineries and automation. We never ever invested in real estate or factory buildings as we had no greed of owning land or building at the cost of limiting the funds flow for new investments in the business. There are people who have invested so much on buildings and are ready to invest in that sector and looking for occupiers. We will use those resources rather than investing again, which is waste for me and the nation as well. For many, this may sound peculiar and a costly affair, but in fact with this strategy, we are saving a lot of money” avows Logu.
Having a workforce of around 10,000 people, AKR Industries’ manufacturing facilities are spread across 17 lakh sq. ft. area, and out of that, just 3.5 per cent or 60,000 sq. ft. only is owned by the company. Rest all are rented premises. Being in Tirupur helped him in this vision as the cluster has so many buildings that are constructed specifically for garment factories and one need not do any major alterations in those buildings to meet the industry norms. This plug and play system proved to be of big inspiration to Logu.
AKR Industries’ factories are almost service and maintenance-free as the company has the policy to use any machine till around 50-60 per cent of its total life and replace it with a new one. This helps to upgrade the technology at quite shorter intervals, and is AKR’s way of getting the best out of the machines.
On the other hand, HR aspects find a strong place in AKR Industries which are generally ignored by many of the apparel manufacturers. Unlike many of the Tirupur factories where it is hard to find the key staff between 2 pm and 4 pm (thanks to extended lunch hours), AKR’s canteen has the same lunch time for all employees including the senior staff. AKR doesn’t have any contractor to manage the canteen.
In fact, while visiting the factory for interview, Team Apparel Resources saw the workers having tea with local snacks in the factory premises.
“My assets are not my buildings, my assets are my team, my people. Generally in this place (Tirupur), employee attrition rate is very high. Whereas there are many employees working here for the last 2 decades. I believe that we can change the mindset and improve people by persuasion. We are always ready to accept new things and ideas. We regularly observe how our staff has improved presently compared to previous year,” avers Logu.
To train its professionals, the company has strong tie-ups with Sri Lankan garment manufacturers and exporters. The senior team regularly visits top technology events like CISMA. This helps the company improve its productivity, sustainability as well as explore new products. Besides, the company has a scientific incentive system and all these have resulted in an attrition level of around 3 per cent, which is far less when compared to industry’s average.
AKR Industries has been primarily into custom-made garments all these years; all its clients are from Europe. Of late, AKR is focusing on the US market to grow the business. Having product development (PD) office in Spain, it is in the process to have a PD office in the US, to understand and cater to the fashion demands of US. Even though the company’s growth was slow last year, Logu believes that it will revive this year, and the addition of US business will also be an added advantage.
Spinning: 15,000 spindles
Knitting: 25 tonnes daily
Dyeing: 50 tonnes daily
Garmenting: 1.5 million per month
Merchandising team of the company never waits to get design guide from the buyers, but offers them with loads of self-developed styles which give the brands lot of inspirations for new fashion concepts. This strategy has helped to boost their business and it’s a win-win situation for the company as well as the brands.
As stated by Logu in his own words, “I never try to fetch orders from Bangladesh or China, my focus is always to get a share of garments manufactured in Italy or Turkey. We are almost 20 per cent at disadvantage compared to Bangladesh, especially when it comes to exporting to Europe, so all our additional efforts like focusing on new markets like USA, on PD, continuous training to employees can only help us to grow in continuously.” All clients, irrespective of their scale of business, order sizes, are treated with utmost care and equal respect by the company.
60% cotton used is BCI
30% cotton used is organic
100% recycled polyester will be used in near future
More and more use of solar and windmill energy
Moving forward, in manufacturing, the focus of the company is to expand its manufacturing base in Andhra Pradesh as Logu believes that labour availability is good there. He adds, “There may be little more incentives that we may get in Andhra Pradesh and we will spend it on training the unskilled workers.”
We often hear that small things matter; Logu too follows the same, dedicatedly working from 9 am to 7 pm daily.