Surjit, Director,
Smart Shop 108
The Indian garment manufacturing industry operates largely in the form of clusters – mostly natural clusters – with roughly more than 70 of them producing 80 per cent of the country’s total garment production. Many are unauthorized and unorganized such as an emerging Sitapuri cluster in Delhi, making it crucial for strategists to focus on strengthening such hubs through local bodies, NGOs and buyers with prime focus on capacity building and compliance.
Though compliance norms are negligible here, still the Sitapuri cluster is successfully producing women’s wear for top Indian brands and retail chains and also the export market. “We are working for Big Bazaar and Dmart and we supply an average 20,000 trousers per month and our complete process is being outsourced,” maintains Surjit, Director, Smart Shop 108, whose total turnover from these two clients is Rs. 4 crore. Manufacturers claim that brands like Monte Carlo, Esprit, Jack & Jones, Tommy Hilfiger, Max are also being produced in Sitapuri.
Saurabh Thukral,
Partner, Sai Mann International
In recent years many new production units have emerged in this area, as many big export houses are getting their production done here. Despite compliance norms only being restricted to basic health and safety, this hub is gaining importance due to cheap availability of skilled labour, work space at reasonable rates, support services such as stitching fabricators, handwork contractors, etc. easily available accessories and greater connectivity. While the industry has been increasingly facing shortage of labour, factory owners in this cluster do not face any such problems, as room for four tailors cost Rs. 2,000 including water and electricity, food is available at reasonable rates, transportation costs are negligible, and there is enough work on piece rates to keep the workers happy.
The reason for the quick development of Sitapuri is also because it is cheaper than other industrial hubs and developed clusters in Delhi such as Gandhi Nagar and Tank Road by 30 per cent. In Sitapuri, land is available for Rs. 1 lakh per sq. yard or on rent, wherein a 100 sq. yards space is available at Rs. 15,000 which is almost one-fourth or one-fifth to any other industrial area. Exporters, who have their units in other areas and have recently shifted to Sitapuri, claim that their overheads here are much lesser than other areas, also they do not need to stock on accessories which is easily available. “Four years ago we decided to shift here from Kundli (Sonepat), but still have factory in Shastri Nagar (Delhi). This area is at least 30 per cent cheaper, which is an advantage to us and our buyers,” informs Saurabh Thukral, Partner, Sai Mann International.
to work here.”
Jitendra Kumar Gupta,
Director, G & J Exim
More importantly, piece rate of each and every product is also 35 per cent lesser in comparison to Okhla, Noida or Gurgaon, as exporters assert that a product that is made for US $ 6.5 in the above mentioned areas is being offered at US $ 5 in Sitapuri. Adds Jitendra Kumar Gupta, Director, G & J Exim, “We are into the business for the last 20 years and shifted our unit from Jamuna Paar area to Sitapuri in 2001 since it is easy to work here and also we have not faced any difficulty operating in the cluster. We are catering to wholesaler buyers in Europe, US, Turkey, Brazil with the capacity of 1,500 pieces per day for women’s wear in woven fabric, having 100 machines in-house as well as some work on job work. In the recent years we have maintained 10 per cent growth rate.”
Despite various advantages, buyer visitation and acceptance remains to be the biggest challenge due to compliance. Most of the entrepreneurs in Sitapuri, work with small and medium level buyers whose priority is price, quality, on-time delivery, basic health and safety and secure payment rather than any kind of certification claiming the facility to be 100 per cent compliant. Adding new buyers is a difficult task but local exporters are taking it slow, by tapping into only small orders starting from 600 pieces. “Due to recession some units have closed down and some have shifted due to factory compliance issues. Even we have consolidated our business. If your buyer is okay with you working in Sitapuri and you have enough orders, it will be a good option to work in future also,” asserts Rajeev Bhatia, Director, Art India.
Rajeev Bhatia,
Director, Art India
Though technical compliance is an issue, a few merchandisers and technical staff of buying houses still visit these areas Even Apparel Online met teams of a few well-known buying houses during their visit to the area. Amongst them is Aman Atlantic, a 14-year-old Delhi based buying house, which started exploring Sitapuri for its catalogue buyers. “Catalogue buyers don’t have much fuss about compliance as long as basic safety and health issues are addressed and their repeat orders continue for nearly four years. Value-added garments, which are our strength and priority for catalogue buyers, are easily manufactured in Sitapuri and that too at a very competitive price,” informs Anshu Man, MD of the company.
It is time for the buyers, exporters, NGOs and local bodies to work together in order to make clusters such as Sitapuri self-sufficient for the Indian garment industries’ successful growth. But what is happening is that the NGOs and labour welfare organizations rather than working and improving conditions in such areas and their workers, are more keen to monitor the already established and compliant companies, since that is where the money is! However, some buyers are taking initiatives, but they are very few and far between. “In Sitapuri, our team is working with the manufacturers to improve systems and also quality,” adds Anshu Man. Many other buying offices and domestic retailers too are taking active interest on quality… What is needed is intervention on ethical manufacturing for wider acceptance in global supply chain.
Anshu Man,
MD, Aman Atlantic
Though majority of firms here are into exports and even fabricators are also associated with exporters, production for domestic market is also increasing due to good margins from bulk orders and on-time payment. Today, manufacturers are claiming that each and every brand and retailer is trying to establish their setup in Sitapuri because of its price-competitiveness and better quality. To further promote these clusters, fabricators, who are working for brands and retailers are offering free space and rooms to their tailors so that they can work more and with less hassles despite lower piece rate. While local bodies are taking initiatives to promote this cluster, what’s much needed is the support from the NGOs, Government and buyers.
