India’s biggest cotton (greige) fabric producing hub Ichalkaranji in Kolhapur district, Maharashtra, is witnessing a turnover of more than US $ 170 million per day. The city has grown significantly during the last decade or so, and its growth momentum is set to continue in the coming years. It is moving towards processed fabrics, there is an increased focus on export, and garmenting is also growing slowly but steadily. While weaving is the core business here, companies are installing sizing machines, wider width technology, and undertaking fabric processing and marketing activities as well. With the hub witnessing multi-directional growth, there is a lot of enthusiasm amongst companies. However, the fear of higher power tariffs being levied looms large over the industry, and is forcing many companies to consider shifting their base to nearby Karnataka, which is offering more and better facilities. This is posing a big challenge for Ichalkaranji. Team Apparel Online met companies of various levels to get a feel of the city.
Growth prospect in export…
With 1,10,000 powerlooms, Ichalkaranji continues to boast of being a strong centre for traditional powerlooms. But the focus is shifting to automation. Two years ago, there were 6,000 shuttle-less looms, and today the number has increased to over 10,000. The city, that has a population of less than 3 lakh people, offers the best quality cotton fabrics made at the shuttle-less looms, which produce thousands of designs. Even small entrepreneurs are doing good business here. Though 80 per cent of the firms have developed as family businesses, now most of the businesses are in the hands of the young people (30-40 years old), who are working effectively and collectively to grow their business. In fact, almost everyone is on expansion mode as there is growing demand in the domestic market, besides which, bulk orders for exports are coming in, and companies have the funds. Even the Government has started promoting exports from Ichalkaranji, for which it is organizing seminars like Niryat Bandhu. Though most companies feel that price realization is better in domestic sales than in exports, there are issues such as credit risk and market fluctuation in domestic business.
Prakash Awade, former Textile Minister, Maharashtra (considered the father figure of the hub), is very optimistic about the future growth of the city. He foresees concrete steps being taken and the results becoming visible in the next two years, which will make the city grow anew as an important export and garmenting hub. “Along with growing footprints in fabric export, our target is to develop this city as a garmenting hub as we have the fabric (even though produced largely by small-scale industries). Garmenting has grown well here in recent years, and we want that the fabric-to-garment process should be completed here, not only for domestic markets but also for the export markets,” he says.
Companies like Ram Krishna (Jhanwar) Group have been motivating others as it has seen exponential growth in its fabric business; it is supplying to garment exporters as well as exporting directly. The soft spoken MD of the company, Deendayal B. Jhanwar, is amongst the few who are focusing more on marketing than on expanding their production. “Our priority is forging a stronger relationship with buying houses and international brands as they recommend us for our fabric, which is being used in making the garments for M&S, Polo Ralph Lauren, Fifth Avenue, TSS, Walmart and other respected brands. We are now directly exporting processed fabric to Sri Lanka, besides Mexico and Dubai, and for Bangladesh, we are going through a buying house,” he says.
Growing interest in processed fabric…
There are some small- and mid-level firms in the city that deal exclusively in processed fabric and only for domestic market. Most of the big companies are making mainly greige fabric, while processed fabric is a small part of their business, though the share is growing. Jatin Cotton Mills, RatanMoti Texfab, and Birla Udyog Samuh Shrinidhi Exports are some companies that have a good setup for weaving and offer processed fabric also; they are catering to local as well as international markets. Processed fabric offers them good margins and the opportunity to widen their customer base, but lack of awareness about export mechanisms is posing a hurdle. “The hub is moving towards finished products as we are getting a direct demand for dyed fabrics. Garment manufacturers at the lower- and mid-level, who were earlier dealing with merchant exporters, are now coming directly to weavers like us. This trend started two years ago and is increasing,” says Pradeep Kumar Birla, MD, Birla Udyog Samuh Shrinidhi Exports. He informs that since companies get comparatively better margins, and they can cater to small orders, which widens their customer base and growth prospect, they are getting motivated to venture into processed fabric alongside greige, which they have been doing for decades.
At the same time, there are companies like Arihant Group of Industries and Jathar Textile, which are concentrating only on their greige business. “We are not interested in dyeing. In fact, the strength of most of the companies here is making greige like us, and can offer a variety of fabrics be it shirting, poplin, canvas, or denim. We have exported greige to Russia and we want to expand the same product category rather than getting into processed fabric,” says Sanjay Jain, Director, Arihant Group. The group rarely does dyed fabrics and that too mostly as a tool during slow market conditions to safeguard against loss.
Like most hubs, Ichalkaranji too has a mixed way of working; some companies are dependent on local traders for sourcing yarn; some have a direct association with spinners as they want better control on quantity, quality and payment terms; and there are some who work with both segments. “We source yarn directly from mills and not from local agents/traders as they charge almost 2-4 per cent more. Since we have a good cash flow, we don’t have any payment issues. Mills usually expect a minimum order for 8-10 tonnes of yarn, and since our requirement is for the same quantity, we don’t have any issues,” says Sandeep Patani, Director, Jatin Cotton Mills. Similarly, while supplying fabric to the domestic market, which is the main customer base of this hub, manufacturers reach customers mostly through agents though a few do have direct customers.
The city has a huge number of agents who supply the locally made fabrics all over India, and there are about 50 fabric manufacturers with in-house production facilities for making good quality fabrics and doing an annual business of US $ 8.11-16.22 million (Rs. 50-100 crore) or even more. Arvind Group (Marda family), Woventex India, Sultanpure Textile Mills, and Jai Durga Textile are some of the leading players here, known for producing various kinds of cotton-based fabrics from suiting to shirting to denim to home furnishing to industrial fabric with a lot of blends. However, the hub is not strong when it comes to product development or R&D, but it can produce any kind of fabric.
Potential in garmenting
Bombay Rayon Fashions Limited has its garment factory here, but overall, garmenting is yet to emerge more strongly and in a more organized manner. The city does have training centres like the Kranti Garment Parsiksan Kander, which claims to have trained about 5,000 women, who found work in the garment industry but mainly as job workers for making handkerchiefs, caps, etc. Ratan Moti that has its own brand, is outsourcing stitching from Indore and other cities due to non-availability of labour in Ichalkaranji. Companies entering garmenting in this city usually start at a low-level, for instance, Jai Durga Textile that recently started with 40 stitching machines as a job work, though it has plans to expand its operations. What is also missing is in-house dedicated training, especially in weaving and garmenting, though some like-minded people are trying to set up a weaving training centre for women. Though associations like DKTE and BITRA have done a good job in training workers, but the industry is still missing trained weavers.
Mixed opinion on infrastructure…
The industry has a mixed reaction about the city’s infrastructure. While some companies feel that it is okay, there are some companies that have a negative opinion, especially of the roads and sanitation. Though there is an aerodrome in Kolhapur (which is 33 kilometres away), but there is no flight service to Kolhapur, which is the biggest hurdle for the opening up of this market. Manufacturers want the local authorities to focus more on improving the connectivity of the city’s roads and the highway. Though the power supply is satisfactory, but the subsidy provided by the Government to the weaving sector can end anytime, which makes people worry a lot. With a lot of migratory labour, the hub is beginning to face more shortage in the city’s resources, which can become a critical issue in the near future.
Karnataka luring companies…
The Karnataka border is about 40 kilometres from here. The state offers a better site for locating factories at a distance of about 100 kilometres from Ichalkaranji. The Karnataka State Government is also offering more facilities than Maharashtra, which is attracting Ichalkaranji-based companies to invest there.
1) Process house and expo centre in next two years…
Prakash Awade is diligently working for the upliftment of the hub. He is hopeful that an advanced fabric processing house and an exhibition centre will be set up here in the next two years. “We have placed our request to the GOI; land has been identified for the processing house which is within 5 kilometres of the city, and the upcoming exhibition centre will be around 20,000 sq. feet in area. We are trying to start a weaving training centre for women also as labour shortage is there and some women have started weaving under self-help group. DKTE will also help in it as it has already done a very good job in training sector. The Central or State Government should come forward to support the hub as its potential is yet to be explored fully,” he says.
2) Ram Krishna (Jhanwar) Group: Aggressively growing in value addition and export
Known for making value additions, Deendayal B. Jhanwar, MD of Ram Krishna (Jhanwar) Group, has a very clear vision for the growth of his company, which has a capacity of 55,000 metres per day and a turnover of US $ 20.28 million (Rs. 125 crore). With full orders for the next six months, he is expecting 25 per cent growth. The company is doing well in excel and modal, and has started yarn of Lenzing, for which it has got a good response. Four months ago, it started supplying fabric to Tommy Hilfiger and Ankur Textiles. “New weavers are not coming to the factories, not even for shuttle-less looms. This is a big concern for the industry so we have more focus on marketing,” he feels.
3) Jatin Cotton Mills: Fabric and home furnishing
A B.Tech in Textiles, Sandeep Patani, Director, has added manufacturing to his family business of trading, and in the long-run, plans to start their own processing house. With experience in exporting (fitted bed sheet of PC to Walmart), it is now meeting regular export orders for fabrics to UK, Turkey and China. The company has a capacity of 10 lakh metres per month (viscose, modal, tensile) and also offers greige, bed sheets and made-ups. Sandeep’s younger brother who is a B.E. in Chemical provides the technical know-how and handles the finishing. A sizing plant is going to come up soon. “Nobody here is focusing on developing the market as it requires collective efforts with the help of trade bodies or the Government,” observes Sandeep.
4) Arihant Group of Industries: Different working ways and aggressive growth plans
Headed by Directors Sanjay Jain and Ritesh Jain, the company is doing double of its existing capacity (150 lakh metres per year). A new unit of 20,000 square feet with an investment of US $ 2.92-3.08 million (Rs. 18-19 crore) will be ready in four months. Already exporting to Russia, the company is offering shirting, poplin, canvas, and denim fabrics, though plain fabric is its core product. Its annual turnover is more than US $ 8.11 million (Rs. 50 crore). Sanjay Jain and Ritesh Jain, opine, “One has to be very humble; owners should be involved in each and every work issue such as labour.”
5) Ratanmoti: Vertically integrated group crossing US $ 16.22 million (Rs. 100 crore) mark
With 15 different factories, Ratanmoti, one of the most respected names in the hub, is expecting good growth in processed fabric, and is also planning to start making trousers now that its casual and formal shirt brand ‘Relish’ is doing good business. The Group’s current weaving capacity is 21 lakh metres per month and it is expanding into sizing and automation in weaving. The Group is also doing training activities with textile committees and experts. Rahul and Ritesh Patni, the new generation say, “Five years down the line, we will be in a very good position in exports.”
6) Jathar Textile: Known for voile and poplin
With a total capacity of 5 lakh metres per month, voile in 100 per cent cotton is the main product of the company. It is exporting poplin to Korea, and has plans to add a processing house in the next three years for which they already have 6 acres of land. It makes fabric of 63 inches width and is planning to start bed linen with a wider width. Vishnu B. Jathar, Director, doing an annual business of US $ 3.57 million (Rs. 22 crore) per year and expect 15 per cent growth. “Due to change in customs/anti-dumping duty in some countries, we are facing a challenge, as we were cheaper by Rs. 2 per metre of poplin as compared to China, but now China is cheaper just because of change in policies,” he says.
7) Birla Udyog Samuh: Targeting clients for processed fabric
The capacity of the company is 84 lakh metres per year. It is now expanding its weaving for which it is investing about US $ 1.94 million (Rs. 12 crore). About 50 per cent of its fabric goes to garment exporters, and to clients like Raymond Zambaiti, Bombay Rayon Fashion Ltd. Pradeep Kumar Birla, MD is doing a business of US $ 4.05-4.86 million (Rs. 25-30 crore) per year and expect 15-20 per cent growth this year.
8) Sara Fabrics: Dress material is its strength
“Using modal, linen, Lycra, viscose, and filament viscose yarn, we have a capacity of 3 lakh metres per month and we are adding 10 more shuttle-less looms in the next one year with an investment of US $ 1.29 million (Rs. 8 crore). The dress material, shirting and lightweight materials particularly in dobby, are our main products,” says, Atul Bawne, CEO, Sara Fabrics.