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Garmenter's apparel doesn't fit textile mills

AHMEDABAD: Making garments may seem a luring business for big textile mills, but textile firms that entered this high-margin, high-risk industry business are exiting it, one by one, the latest being Arvind Ltd. While garmenting, or clothing business, offers margins of up to 30%, fibre-to-fabric makers are fast accepting that this labour-intensive business does not suit them and it's best handled by specialised entrepreneurs in pockets of North and South India. "You need to have high risk appetite to be in garmenting," says apparel export firm Gokaldas Exports MD Rajendra Hinduja. "While a textile company would be comfortable doing some 1,000 metres of fabric per day, a garmenter often runs the risk of rejection due to defective pieces and delayed dispatch. One could lose money fast," he adds. Textile firms agree. Companies such as Mafatlal Denim and Madura Coats have long ago taken off their garmenter's cloak. Alok Industries, while still hanging on to the business, has no expansion plans. One of the biggest challenges in this business is to hold on to the talent pool. "It is a daily challenge," says Alok Industries corporate affairs president KH Gopal. "You train them and then they leave you for minuscule gains in their wages," he adds. The Mumbai-headquartered company is facing an average 30% attrition in its garmenting business that employs 3,000 workers. It's the same concern that made Arvind exit garment business after 13 years. Officials attributed the decision to shortage of skilled labour and the cyclical nature of business. As much as 35% of its employees were quitting Arvind's garment business every year. The company has now given the 2,500 workers in the division the option of joining other businesses. A SPECIALIST'S BUSINESS Garmenting has never been the forte of Indian textile companies that are best known for yarns and fabrics, say experts. "Unlike conventional textiles that are highly automated, garmenting is labour intensive and this has kept corporates away from this business," says Chandan Chatterjee, general manager, Gujarat Industrial Extension Bureau. The industry has been essentially driven by entrepreneurs who have developed garmenting clusters in places such as Bangalore, Tirupur, Delhi and Kolkata. "One has to be strategically located in one of the garmenting hubs like Bangalore or Tirupur to be in business," says textile analyst Nabarun Kar of B2B portal fibre2fashion. That is because it's easier to find skilled labour for garmenting in these clusters. Mafatlal Denim Managing Director Rajiv Dayal says garmenting is not a corporate's cup of tea. "It is difficult for a person making fabric to make garment, which is driven by design and innovation," he says. "The cyclical nature of business makes it unviable, considering one would need to manage the huge workforce even on lean months. No wonder, corporates perceive garmenting as a risky proposition," Dayal says.

Mafatlal exited garmenting about a decade back. Hinduja of Gokaldas Exports says no textile firms wants to be in garment business except for vertically integrated companies with small garmenting units for sampling to exhibit to their buyers. He says experienced people leave the company in every six months. "At times, it is a hand to mouth situation," says Hinduja, about the availability of labour.