Indian Textile Model

After I got sick of a certain Idiot Manager with pressed cheeks in a polyester staple fibre plant , which then was under another group and now belongs to Reliance. ( No wonder the plant made heavy losses with such Chutiya Manager as its spinning and fibre line incharge with zero experience in Textiles . Finally , it got sold to Reliance and is doing good ) . I moved to Machine Industry . This would mean migration from from a manufacturing job to a Customer Technical Services job with ICBT lincese manufacturer, LMML in India. The company was making Texturizing Machines, Twisting Machines and Winding Machines. All for the filament sector. I should record here that LMML a company of Mr R.K. Lohia was still one of my best experiences in the industry and he actually managed the company as any other multinational. Though LMML closed down as it had products , which were ahead of its time for the Indian markets. Also, it did lack good marketing and servicing managers.

I was posted in Bombay for a while and then in Silvasa, a town, which then was taking shape as the industrial town for filament yarns. It should have been rather called Texvasa then Silvasa. As India's all texturizing and twisting machines were based in this small tribal city. The reason being , it was a tax free zone and the government had thrown in many other incentive packages, which got the place buzzing.

This small city of Silvasa perhaps today could be the largest Texturizing zone in the world and soon could become the largest Textile City in the world. Those years, there were small texturizers with one machine and maximum of 2 or 3 machines. The Big texturizer was " Beekaylon" with more then 10 machines and I cannot recall the exact number after around 20years.

I was servicing machines with most texturizers for one year , till I got transferred back to Mumbai and switched to Marketing of Machines. This is where, I first started meeting the owners of all these small texturizing machines and year after year, each of these texturizer made hue and cry on the poor business and still went into add one more texturizing machine. Reliance , the dominant POY supplier always played the card well by giving credit notes to large volume users and getting texturizers to add more machines.

Today, some of the customers, whom I know have become Global scale are " Wellspun , Alok, Bhilosa, Siyaram, Kanodia ji, JBF and many more " But these were all entrepreneurs, who never had a global scale vision and there business style also did not reflect the kind of scalability , which the groups enjoy now. It was many a times very difficult for me to sell my machines as the investment decisions were far too slow and they operated in almost very low growth trajectory. My ex boss joined Alok as a GM and he would tell me that the company was working on investing in big way in textiles, but I never believed him. Though , today , Alok perhaps has seen the highest growth amogst all my customers. It is the same company, which had only two texturizing machines in the year 1988 and today it is one of the worlds largest textile companies. I still dont forget, how Mr Jiwrajka ( MD of Alok ) would bully me for machine quality etc.

Well, good to see all my old customers, who were rather not even medium scale are now global scale. That too in a short period of less then 25 years. In fact , whenever accidentally, I happen to meet one of my customers in a foreign land, they look so damn happy and invite me to come and visit and see, where they stand today. How and why it has come to this stage is being shared hereunder.

This is the most interesting model of Indian Textiles, which most other countries failed.

In India, Textiles was highly corporatized till the late 1970s, and with the Communist trade unions and later Datta Samanth Mumbai mills strike, the Industry took a dramatic turn. Once, what use to be a complete integrated textile mill, now became highly fragmented industry with spinning, weaving and finishing. But because of the advent of man made fibres, a totally new segment of industry cropped up across western India. This was the Texturizers, Weavers of texturized yarns, processors and finally the trade. The main centres were , Surat, Ahmadabad and Mumbai.

The large Integrated Textile mills were gone forever by the 80s.

Reliance in a very short time moved in to become the leader in Synthetic spinning and weaving. Quickly bought out a polyester plant and rather then Texturizing and Twisting the full production and then selling to weavers, it created a new industry of " Throwsters " , wherein the POY was bought by the texturizer and then the yarn was sold to the weaver. Interestingly the weavers were again only owners of 4 looms to 8 looms to 16 looms in Bhiwandi , Ahmedabad, Surat etc . Over the years, the same weavers now have thousands of looms . The small quantity of yarn was bought by the trader, he would get woven at the weaver centre, where he paid per pick insertion prices and then the cloth would move to the processors, who would dye and finish and finally the cloth moved to the market. The retailers from all over India would visit these three major markets , buy their stuff, place further orders and go back. This is how the Industry worked largely in and around Western India.

In short, Reliance had created Thousands of Entrepreneurs , who were as small as having only one twisting machine to one texturizing machine to only 4 weaving machines ( The most basic weaving shuttle type from the 19th century and not the modern machines ) to one jet dyeing machine etc . These same small entrepreneurs later over time have become large companies and ofcourse the texturizers have become global scale textile organizations.

Later this model got copied in other parts of India, like Bhilwara, Meerut, Panipat, Ludhiana, Calcutta etc. Each place, it created a large entrepreneur base and ofcourse the secondary employment associated with it.

Exactly similar thing happened with the Silk Industry in Bangalore and Hyderabad, where small weavers with 2 machines and so on ,have now become global scale silk fabric suppliers with very big factories.

Tirpur , a small sleepy town close to Coimbatore use to have 2 to 4 knitting machine per factory and these were all old simple machines. The same factories today are the suppliers to the best knitted garment brands in the world with the latest machines from Europe.

The same story took place in the dirty small lanes of Panipat, which has now become the global preferred home furnishing textile centre . There each weaver had one or two machines and today is a preferred supplier to Top stores in New York and some of them have their own store in New York. Much that My uncle told me after textile graduation that I buy two looms and start a small workshop in Panipat, but I wanted to be a nice looking big officer of a big company wearing a coat, boat, tie . And here it is, after 25 years, I am writing blogs like a joker and those who put the looms are multimillionaires driving around with Audi's and Bentley etc . Such is the irony of life.

In the spinning sector, again, mills which were like 25000 spindles now started going to as high as 100,000 nos and nos of mills kept adding year after year. Here the groups like " Nahar, Premier, Suryavanshi, " and many more did very well.

Weaving and Processing still remained fragmanted and till date is not in the organized sector. It is quite impossible to find one single company which has say 1000 latest weaving machines . Most of it is spread across weaving centres with traditional weavers.

The last large Investment in corporate sector in Integrated textile was " Arvind Mills" in the year 2000.

Garmenting came a little late to India, but now is too big an industry.

The idea of telling this long story is only one, that all what we see today as the major global players of textile were extremely small companies 25 years back and employed not more then 15 to 25 workers and today, because of the structure of the very textile industry in India, it has created an invaluable wealth to millions of small entrepreneurs, many of who never even went to university forget a Business School. None of the banks ever lend them money to start a business and only at very late stage of business granted working capital to them.

Alteast in Bangladesh, I see the exact replica of the Indian Textile model and I am quite confident that Bangladesh will make millions of entrepreneurs of global scale some day. China Textile Industry is quite interesting and merits a full blog. I will write on it separately.

Most other countries, did not go the same way, Indonesia, Thailand, Philippines, Malaysia, Laos, Sri Lanka, Turkey, Pakistan ( I am not really sure , but perhaps Pak Industry is quite good ) . But are still not late in emulating the same model. In Thailand, one such model which did good for itself was the silk Industry. The weavers there got organized by an Ex American Spy, " Jim Thompson " and the silk weavers across the country till date have leveraged his name to an Icon of Thai Silk Industry.

Another one country which actually has done quite well with its Textile Industry and can be mapped to the Indian Model is " Iran" . There too the Texturizers are separated from the Spinner and yarn moves to weavers and finally the fabric to the market. In short, Textile is one industry, which shows better deliverables, when in small manageable units and brings about greater economic value to the nation.

If World Bank, IMF has any sense, then it should commission some of its officers and present to all the developing nations in Asia and Africa, how small companies grow to medium and then become global within a span of 25 years. The total wealth generation out of these small companies scaled to where they are today will be larger then the GDP of many a medium size countries.

It is not just IT in India , which has scaled global heights, but Textile is another Industry, which has done very well for itself. Today Indian Textile Professionals work across the world, bringing value to their organizations. Only that unless the Asian Textile Industry understand that " Branding " and " Fashion " will move them to the visibility rainbow of Global Businesses, otherwise they will largely remain commoditized.