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filename=Bu251008the_jeans.asp
The Jeans That Built Bellary
A quiet Karnataka backwater has become the epicentre for a denim jeans manufacturing revolution,
reports SANJANA from Bellary
POINT BLANK. Walker. Nasty. Podium. These are not just random words in an English dictionary.
They are the names of successful brands of denim jeans, manufactured in Bellary, north Karnataka.
To the tune of an estimated annual turnover of Rs 150 crore. Its a big sum for a district labeled one
of the most backward districts of the state on its own official web page.
Consider this: the 2001 census pegged the total population of Bellary at slightly over 3 lakh. A third of
Bellarys population, over 1 lakh people, is employed in the jeans manufacturing industry. According to
the Human Development report (2005) for Karnataka, Bellary stood in the ninth position on the
Income Index for the states districts and the jeans industry is second only to the mining sector in
being the major contributor to this development.
Jeans from Bellary are not just popular in Karnataka: feeding the low to mid range price segment, they
are as sought after in Andhra Pradesh, Tamil Nadu, Kerala and Maharashtra. Priced 30-50 percent
lower than premium international brands such as Lee, Levis or Wrangler, jeans from Bellary cost
between Rs 145-Rs 750 a pair.
Price is not the only reason for their popularity: a major reason is the fact that these manufacturers
use similar quality denim to that used by big tag brands. We source denim from the same
manufacturing mills as these premium brands and are still able to offer a huge markdown on the final
pricing. because operations are outsourced. High volumes also drive down retail prices, says
Bharrani, a partner with BB Brothers, the group that makes Point Blank and Podium brands.
Bharranis firms is one of the few in Bellary that has an export business footprint as well Point
Blank reaches Australia under the same brand name. In Europe and US however, Point Blank jeans
are sold under the go-to-market brand name of Dragonfly. In the Middle East, once again, they are
sold under a different brand name.
The different brand names are not just market-driven strategies or ways to beat export tax. They fit
perfectly into the extremely profitable retail industry logic. Wholesale jeans manufacturers often supply
leading domestic and international retailers with unbranded pairs, which are then sold by retailers
under their own brand names. For a sizeable profit, that is. On average, a pair of jeans made in in
Bellary costs Rs 350, while the same paid in a store in Bangalores glitzy malls is marked upwards of
Rs 900.
Of course, no manufacturer will divulge the names of retailers who buy in Bellary. Ganesh Murthy, a
purchasing manager at one of Bangalores leading one stop retail shops, is not surprised. We always
sign non-disclosure agreements with our suppliers. Who would want to know that the jeans they are
paying huge amounts for were actually manufactured in far-flung Bellary? he asks.
There is a great deal of truth in that statement. Bellary, despite its long history of engagement with
garment manufacture (the town tailored uniforms for the British), is stamped with the label of not being
good enough. Backward Bellary cannot match quality standards that customers expect from the
brands they buy in bigger metropolises.

Manufacturing units in and around Bangalore cater to the GAP, Tommy Hilfiger or Mexx, while
Bellarys units are confined to providing products for second rung brands. Admits Bharranii, Quality
has always been a concern for Bellarys manufacturers. The ad-hoc production and the lack of quality
control standards all add up. The required amount of technology and capital investment that abounds
in Bangalore is obviously missing in Bellary.
The state government has mooted the idea of establishing an Apparel Park to boost Bellarys units.
The idea, first proposed in 2001, is still at the notification stage, pending final approval. Spread over
174 acres in Mundaragi and Guggarhatti villages around the town, the proposed park will cost the
government Rs 27 crore.
While the park itself is yet to come up, the bickering over how it will benefit manufacturers has begun.
There might be a promise of proper infrastructure facilities but I doubt there will be many takers. The
cost of moving into the park, along with the cost that we will incur to shift all the workers there, will add
up to quite a bit. Besides, we survive through outsourcing, something that will not be possible if we
move into the Park, says Mahesh Jain, a small-time trader.
THE OUTSOURCING that Jain refers to is a distribution of the production process once the denim
fabric is received from the mills, it has be styled, cut, stitched, dyed, ironed and then packaged. The
process involves multiple players, none of whom are located under a single roof. K Mohammed Shafi
of Donar Garments runs three units, with 50 machines, where the fabric is stitched. There are
different machines every pair of jeans needs about eight different machines and their cost ranges
from Rs 2 lakh to Rs 18 lakh. Not many manufacturers in Bellary can afford all this under one roof. As
an informal estimate, Shafi figures there might be around 200 such stitching units in Bellary a figure
that does not include those who choose to work out of their own homes.
What is interesting is that Bellary became a jeans manufacturing hub almost without assistance from
the state government. But traders agree that if this backwater wants to leverage this to tap overseas
markets, this unassisted business model will not work.

http://www.thehindubusinessline.com/companies/for-the-love-of-jeans/article5401545.ece

For the love of jeans


RASHMI PRATAP
PURVITA CHATTERJEE
COMMENT PRINT T+

inShare
?

MUMBAI, NOV. 28:


The denim market in India will nearly double to over Rs. 13,000 crore in the next four years,
thanks to the youths love for blue jeans. The boom will be fuelled by not only increasing demand
from small cities and rural areas but also the acceptance of denim at workplaces, according to a
study by Technopak Advisors.
The denim category, owing to its high association with casualisation and fashion, will witness
volume growth due to increased penetration in rural geographies and smaller Indian cities, says
the study.
This is a reflection of the youths aspiration to engage with fashion, percolating beyond urban
centres, it adds.
In 2012, the denim market in India stood at Rs. 6,700 crore, with unbranded segment
accounting for 58 per cent. While the mid-premium market commanded 15 per cent share, luxury
comprised 16 per cent of the denim market in 2012.
BRANDED IS IN

By 2017, however, the unbranded segment will go down to 48 per cent, making room for more
premium and mid-premium segments. These segments will grow at about 20 per cent over the
next four years, almost double the growth in the unbranded segment.
Young people have become brand conscious. And this is driving the growth of branded denim
wear, says Kewal Kiran Jain, Chairman and MD, Kewal Kiran Clothing, the maker of Killer
Jeans. The brand has been growing at 25 per cent CAGR for the last three years.
In denim wear, it is all about flaunting the distinct patch at the back unlike other clothing
categories. Denim also does not lend itself to tailoring. So consumers have no choice but to go for

a brand, says Arun Sirdeshmukh, Co-Founder and CEO, Fashionara, an online seller of fashion
clothes and international brands in India.
UBIQUITOUS

The denim segment has multiple advantages as people can also wear it to work. Besides, new
economy businesses such as advertising and e-commerce have employees wearing denim to work
as it can be easily co-ordinated unlike ethnic wear, he adds.
Aamir Akhtar, CEO, Lifestyle Fabrics (Denims) at Arvind, agrees. Denim has broken all
boundaries and can be worn on any occasion. It is also acceptable at workplaces for its
adaptability. This is leading to increased innovation by companies. The ever-changing needs of
the consumer challenge us to continuously innovate in this segment, he says.
The Technopak study points out that going forward, the value growth within the denim category
will be due to increased demand for enhanced fashion quotient, stretch and lightweight fabric,
styling and detailing. This trend is emerging across both mens and womens wear, it adds.
In womens wear, traditional ethnic wear is now limited to special occasions only and denim is
finding its way into their wardrobes. Even growth of the salwar-kameez market is largely driven
by the increasing demand for kurtis, which that tend to be teamed with denims, Technopak
adds.
rashmi.p@thehindu.co.in
purvita@thehindu.co.in
(This article was published on November 28, 2013)

https://www.thedollarbusiness.com/first-make-india/

STEVEN PHILIP WARNER |


EDITOR-IN-CHIEF

FLIP
BACK TO HOMEPAGE

FIRST, MAKE INDIA!


Improving Indias Ease of Doing Business ranking will not help until manufacturing
and service hotspots continue to suffer from lack of basic infrastructural facilities.
China didnt become the worlds factory without power supply, roads, ports and basic
infrastructure. Or did it?
Steven Philip Warner | The Dollar Business

If improving on Ease of Doing Business was the one sureshot tactic to making Indias GDP and exports grow,
China would have neither been no.1 on exports, nor the benchmark for GDP growth!

How would you feel if someone asked you to gulp down (without due respect to your
five senses) a bowlful of hot boiling soup on a blistering summer evening? That was
precisely the discomfort-mixed-with-annoyance emotion that many across India felt
on the second day of June the day when Indias export numbers for the last
financial year were made public. But despite the upsetting revelation of Indian
exports having fallen well short by $30 billion of its annual target for FY2014-15 (with
merchandise exports having contracted by about $4 billion and total exports by $11
billion), no one blew a gasket. Other than sparing amounts of ridicule on the subject,
even the Twitterati avoided landsliding on the guardians of Indias exports.
Its not that stakeholders of Indias foreign trade have given up on being yeasty
anymore. Not to forget, there is also the obvious lot of critics in our democracy whod
affectionately come down like a ton of bricks on any given opportunity. But none did.
In fact, that this announcement got as much attention from as large a section in India
as did February 19th this year (do check if that day was special), only testifies that
onlookers and the Indian export-import communities overlooked the announcement
as a gesture of special sympathy on their part.
Much because after eleven months of lackluster performance in exports last fiscal,
nobody expected a rabbit to pop out of any policymakers hat and weave magic to
elbow Indias exports past last years level. [To cross the $340 billion in exports

target, the mean monthly export performance desired was $28.3 billion, which was
just about marginally surpassed only in September 2015.] And also because even
the educated lot in India has become quite used to the idea of either spellbinding
manoeuvres used to fabricate growth on paper (even when those responsible are
caught with their arms cradling their bent knees all-year-round), or some ambitious
theoretical masterplan that supposedly guarantees (through word and intent) to play
the doctor post announcement of any below par macroeconomic performance.
How India was glorifyingly crowned the fastest growing major economy in the world
during the last quarter of FY2014-15 with an on-paper GDP growth of 7.5% (7.3%
during FY2014-15), by changing the base year for calculation to FY2011-12 (as per
the previous base of FY2005, as projected by RBI, the growth for the quarter was a
lower 5.5%), is an example of the previously mentioned spellbinding manoeuvre
that planners of our economy have mastered. Can you imagine a nation growing at
7.5% the fastest amongst all major economies in the world and its central bank
choosing to reduce repo rate to pump liquidity into the economy and stimulate
inflation, and revive MSMEs and businesses like real estate, airlines, consumer
electronics, etc. The faster-than-China growth has come during a time when
manufacturing and mining sectors grew by a Lilliputian 1.4% and 2.3% respectively.
For those in love with detail, here are some digits to analyse: during the past fiscal,
the General Index rose by just 2.8%, production of Intermediate Goods budged only
just slightly by 1.6% and most shockingly, output of Consumer Goods fell 2.8%
(consumer durable category shrank by a massive 12.2%; TV and communication
equipment by 62.8% and computing machinery by 39.4%; source: Growth of Index of
Industrial Production Central Statistic Office). And to top it all, both exports and
imports contracting during the period!
What will have sane economists laugh till their belly hurts is that while the base year
of an economy for calculating its GDP has been altered to 2011-12, that for
calculating IIP has been maintained at 2004-05; and when the same governmental
department is in charge of both indicators! Either principals at CSO have bats in the
belfry so the logic for two different base years stands far beyond common sense, or
they did so for lack of time like we said earlier, most Made in India humans are
born to assume that a majority of those responsible for the nations social and
economic well-being, are to be found with their arms cradling their bent knees allyear-round.
As for some ambitious plan, there is one strategy that will apparently come to the
rescue of Indias exports, given that its the one most spoken about since the dismal
export numbers were made public: Improve upon Indias Ease of Doing Business
rankings. Going by announcements made during the second week of June by the
Ministry of Corporate Affairs (notification issued in respect of both private companies
and PSUs under Section 462 of the Companies Act, 2013 changes to the Act
include some real and some cosmetic privileges to make way for more flexible and
efficient functioning of the said companies) and Department Of Industrial Policy &
Promotion (to rank our states on parameters of business-friendliness and their
attractiveness to foreign investors, thereby encouraging competition amongst them),

expectations abound that India may be able to climb the ladder in World Banks
customised perception of Indias business friendliness. But given that possible
outcome, there is the other side too. And some questions come to mind.
What if World Bank (WB) decides to change its methodology next year or two years
hence? If that happens, will Indias policymakers again go about amending the
recently released Companies Act? At present, of the ten broad parameters used by
WB, India ranks below 100 countries on eight counts. How many years will it take
before we can actually move into the top 50 on all 10 parameters (as PM Modis
team envisages)? Will improving on Indias ease of doing business rankings make us
China 2.0?
For once, lets have you close your eyes to what may be and focus on what is.
China.
If improving on Ease of Doing Business was the one sureshot tactic to making ones
economy grow both internally (were talking about real GDP; in the true sense) and
externally (exports), China would have neither been no.1 on exports, nor been the
global benchmark for GDP growth! Its overall Ease of Doing Business rank is a lowly
90. In five of ten parameters it ranks below 120. And only in two parameters does it
rank below 50 (with it being in the top 30 in zero cases). Why is it then the worlds
largest exporter? [And I hope we are not looking at Singapore as our model,
because despite being no.1 on the WB rankings, bad that it is not amongst the
worlds top ten exporters, and too bad that being a victim of geography, 40% of its
exports are plain re-exports.]
Ease of Doing Business is a factor that will affect FDI. Agreed that its perceptionplay that matters. But FDI isnt the be-all and end-all to growing Indias share in world
trade. Forget the unfriendly tax structure, if basic problems like electricity shortage
and infrastructure continue to plague manufacturing and services sectors in the
country, even foreign investors will continue to remain shy. Allow us to apprise you of
some specific issues. How good are food and fruit processing clusters in Dirang,
Bordumsa, Bhalukpong (Arunachal Pradesh) and textile manufacturing plants in
Solapur (Maharashtra) without power? Why is Kanpur, the epicentre of leather
tanneries and the ninth-largest local economy in India, without an airport? Why
should export temples like Morbi (in Gujarat; that accounts for 75% of India-made
ceramic tiles) and Jodhpur (that exports handicrafts worth Rs.1,500 crore per year)
lose their competitive edge due to logistics costs and poor connectivity to ports? Why
should Indias very own jeans manufacturing cluster in Bellary grapple with difficulties
just because a project of developing an SME cluster has either been delayed or lays
dead in some file that is either useful for beating flies or collecting dust? Why do we
cry hoarse about hot rolled steel products killing our steel industry and cheer about
anti-dumping duties on foreign imports, when news of coal shortage affecting steel
manufacturing plants is (oh!) so common in India?
Truth is: There is more to growing Indias export-manufacturing prowess besides just
focussing on a subjective analysis called Ease of Doing Business. And the need to

realise that is urgent. In the decade leading to FY2012, Indias GDP grew at a CAGR
9% on the back of 25% and 30% growth in manufacturing and service exports
respectively. Considering that far too much hasnt changed in four years except the
ruling government for India to grow at 7-8% each year, you will need exports as a
whole to grow at least 20%-plus on average.
If we are to continue growing without too many clever pen-and-paper tricks, to make
India a truly manufacturing superpower and continue basking in the glory of our
competence in the service sector, our exports will need to grow faster than planned.
How fast? Cross the $900 billion total exports target before 2020.
Now that, after all the talk about a report called Ease of[whatever] sounds a task
not so easy! Given our current challenges, we need to Make India to Make in India.
And that superset of tasks should be the focus, not just a sub-set called Ease of
[again, whatever!].

http://www.livemint.com/Companies/yK4HRRyboSEfo5Ksxj4eNJ/Bellary-jeans-in-image-makeover-mode-to-tapupmarket-custome.html

Updated: Sun, Nov 11 2007. 11 47 PM IST


Karnataka: Customers in New Delhi and Mumbai may not have heard of them, but jeans brands
with names such as Nasty, Point Blank, Hotline, Pierre Bellari, Power and Reporter are popular
across small towns in South and Central India and even among people from the lower income
groups in Bangalore and Hyderabad. Almost all the brandsif Pierre Bellari didnt give a clue
come from the hot, dry and dusty Bellary district of Karnataka.
Lucky M. Shah, secretary of the local Garments Manufacturers Association and a merchant manufacturer, says
the companies in Bellary are now investing in building brands.

Bellary, 500km north-west of Bangalore, was once a British cantonment that


cut its teeth in the apparel business stitching British army uniforms. Today,
this legacy manifests itself in jeansscores of small units in the town churn
out around one million pairs of jeans a year.
In Indias apparel business circles, however, Bellary is usally spoken of with disdain, as a hub for
low-cost and low-quality jeans. Consequently, profit margins too, are low.
Many of the companies in the jeans business in Bellary are traders or merchant manufacturers
as they are termed. These companies do not have manufacturing operations of their own, and
outsource this function to multiple small contractors.

However, Lucky M. Shah, secretary of the local Garments Manufacturers Association, and a
merchant manufacturer himself, says companies such as his are trying to move away from this
model.
We are now investing in building brands, says Shah, who runs Ashwin Dresses and owns
Nasty, a brand of jeans that he claims is popular in Hyderabad.
The Garments Manufacturers Association of Bellary has 250 members, and most of them are
traders. The association is also encouraging its members to invest in brands and manufacturing
operations.
Contractors, who get work from traders such as Shah, make the jeans in small sheds that house
5-20 machines. Most of the people working these machines are employed only during the festival
season, June to February, and work on an average for 12 hours a day, on daily wages between
Rs80 and Rs120.
Three out of four jeans made in Bellary are sold in outlets across South India with the rest being
sold in states such as Orissa, Madhya Pradesh and Gujarat.
There is little quality control and, according to Sankara Moorthi, a former expert from United
Nations Industrial Development Organization (Unido)a specialized UN agency that works in the
area of industrial developmentwho advised companies in the Bellary jeans cluster between
2003 and 2005, there is no quality awareness; nor do they (these companies) stick to delivery
schedules.
A pair of good quality Bellary jeans earns, on average, Rs150 lower than a similar one made in
Bangalore, says Moorthi, now a senior technical adviser at Apex Cluster Development Services
Pvt. Ltd, a company that advises industrial clusters in the country.
The local industry in Bangalore, a major exporter of high margin garments to large retail stores
such as those run by GAP Inc., produces jeans that it sells at more than Rs800 a pair. Currently,
most of the Bellary jeans are priced under Rs350.
(The) Bulk of jeans sold (in the country) is between these two bands. They (Bellarys jeans
makers) should focus on this, says Moorthi.
Some companies have already hopped on to the brand bandwagon and are investing in
integrated factories in an effort to control quality better. Mutha Dresses, which owns the brand
Walker and is among the largest garment makers in Bellary, and four of its associate companies
are investing Rs3 crore in a factory that will produce 600,000 pairs of jeans a year, almost thrice
the number these companies currently get made through contractors.
Umed Mutha, the eldest of the six brothers who run the firm, says margins would improve by one
third due to efficiencies of scale and better quality control. We can earn Rs100 more for each
pair ...(through automation), he adds.

The association says close to 20 firms have expressed interest in investing in their own factories
and build their own brands to earn better margins.
Nearly 90% of the jeans (currently) are stitched by contractors; in two years, our factories will
stitch 90% (of them), says Shah.
The association claims nearly 100,000 people work in the Bellary cluster, and that the jeans
business is the second largest employer in the backward district. Bellarys iron ore mines employ
an estimated 1.5 lakh people. The district is also home to the Hampi ruins, a world heritage
destination.
Aslam Basha, the 46-year-old joint secretary of Bellarys Garment Makers Association says that if
new factories come up, the current lot of tailors may lose their jobs as they may find it tough to
shift to a new environment.
Their forefathers adapted in the past when the orders from the British imperial army for uniforms
stopped. Bellarys jeans makers will be hoping that they will be able to reinvent themselves a
second time.

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