TIRUPUR CLUSTER – A SUCCESS STORY *
Tirupur an obsure town in Coimbatore District has been placed in the knitwear map of global apart from catering to the whole India. The success story of Tirupur can be mainly attributed to the entrepreneurial skills of the people coupled with hard work, commitment to the job. Tirupur can take its own pride that within a matter of two decades the export has grownup by leaps and bounds, from less than Rs.10 Crores in 1984 to Rs.11,000 Crores in 2006-07. However, due to appreciation of rupee against dollar in 2007-08 export has declined by 10% and registered Rs.9,950/-. As far as Tirupur exporters are concerned true to their spirit and entrepreneurship, they have taken lot of effort to cut down the cost and sustain in the global market and aiming to reach 4 billion by 2010. During the year 2008-09, due to financial crisis in US and EU market, the exports for half yearly period declined to Rs.5,050 crores compared to Rs.5,350 crores recorded in the corresponding period of 2007-08.
Chronological growth of Tirupur
The first knitwear unit in Tirupur was set up in 1925 and the growth of the industry was slow till late 1930s. A series of strikes in late 1930s in knitting factories in the neighbouring towns of Salem and Madurai resulted in the opening of new firms in Tirupur. Subsequently, it emerged as the prominent centre for knitwear in South India by 1940s. In 1942, 34 units were engaged in the production of knitwear all these units were composite mills and the production was carried out in the same unit (sic). There are also references to some units performing specific tasks / operations like bleaching and dyeing, located in the larger units. By 1961, the number of units rose to 230 and till early 1970s, the industry catered only to the domestic market. These units were mostly composite mills without any subcontracting system of production. It was in the 1980s, the export market began to expand and subsequently Tirupur emerged as the largest exporter of cotton knitwear from the country, accounting for roughly 80 percent of the total cotton knitwear exporters.
Commencement of Exports
Tirupur’s direct exports started with Italy. Verona, a garment importer from Italy came to Tirupur in 1978 through Mumbai exporters to buy white T-shirts. A lot of job workers were manufacturing garments for merchant exporters. He realised the potential and came to Tirupur the following year. Verona was the man who brought European business to Tirupur. On seeing the quality, others soon followed suit. In 1981 European retail chain C&A came. Gradually, other stores approached the exporters.
A handful of manufactures exported garments worth Rs. 15 crore in 1985. The next couple of year was a windfall for Tirupur as exports touched Rs.300 crore in 1990.
Capacity of Units in Various Operations
Tirupur is known for the cluster activity and mostly each activity of garment making is being carried out be outside units say. Knitting units, Dyeing & Bleaching Units, Fabric Printing, Garmenting, Embroidery, Compacting and Calendaring and other ancillary units. The following table shows the position of Tirupur units.
Role of TEA in development of exports and Tirupur
Tirupur Exporters’ Association popularly known as TEA was set up in the year 1990 under the leadership of Shri. A. Sakthivel. His dream is always to make Tirupur a vibrant knitwear cluster under Global outsourcing for everything in knitwear. Currently TEA has 668 knitwear exporters as members and doing yeoman service to the exporters.
In 1990, when TEA was formed Sakthivel has a vision for the knitwear industry – a billion $ exports in 1995, and achieved it by pursuing the goal with a missionary zeal, taking everyday in his fold. He was the first south Indian to become the member in Apparel Export Promotion Council (AEPC) in 1984 and become the Chairman of AEPC in 1998 and for the second time in 2004. He has been elected as President of Federation of Indian Export Organisations (FIEO), New Delhi for the period 2009-2011.
Tirupur Exports from a meager Rs. 10 crores in 1985 to Rs.5000 crores in 2003, and Rs.11,000 Crores in 2006-07 is a performance that has no parallel anywhere in the world.
His leadership has been the prime mover in this enviable and remarkable achievement. He had set his sights far beyond the horizon and targeting Rs.25,000 Crores by the end of 11th Five Year Plan, 2012. Till date, Tirupur exporters are able to achieve the target set by them. However, due to impact of adverse external factors like rupee appreciation against US dollar and financial crisis in US and EU market, rise in petro product prices and bank interest rates, there in an apprehension in reaching the target in 2012.
The following table captures the year - wise export data from Tirupur
YEAR-WISE EXPORT DATA
As far as the export is concerned, all leading brands Nike, Cutter & Buck, Adidas, GAP, Tommy Hilfigure, Katzenberg, Vanhussain Fila, Arrow etc., and leading chain stores like c&A, Wal Mart, Target, Sears, C&A and Mothers Care, H&M are sourcing from Tirupur. It was a fact that one of the garment manufacturer in Tirupur supplied T-Shirts to FIFA World Cup also.
The achievements of TEA
TEA visualized the directions and dimensions of growth of knitwear sector sufficiently in advance, conceived, planned and executed massive projects to sustain the growth and retain the dominance in knitwear exports. The projects completed are given below.
Tirupur export Knitwear Industrial Complex (TEKIC)
An exclusive industrial complex for manufacture of knitwear for export, namely, Tirupur export Knitwear Industrial Complex, about 8 kms. from Tirupur, in a sprawling 100 acres site to relieve congestion within the city and facilitate expansion of production capacities. This is the first Industrial Complex promoted by private enterprise, consisting 189 industrial sheds with full-fledged infrastructure facilities such as power. water, roads, rain water drainage, sewerage, security post and telecommunication. The investment in this complex has crossed Rs.200 crores and value of production is estimated at Rs.800 Crores per annum.
INLAND CONTAINER DEPOT (ICD)
TEA LEMUIR Container terminals Private Limited, about 10 Kms. from Tirupur arranges for loading and unloading of export and import cargo in Tirupur itself. Exporters in Tirupur are now completing the customs formalities in Tirupur itself and sending the goods in containers directly for shipment through all southern ports and Mumbai.
TEA PUBLIC SCHOOL
TEA Public School is situated in lush green location, the school has all facilities of a modern educational institution and imparting education of very high standards to students irrespective of caste, creed of religion-upto 12th standard.
This processing and production complex is located in Kanjikode near Palakkad. A most modern process house is functioning for enhancing the quality of processing of knitwear cloth and garments to international standards. A few knitwear production units are also working in the complex. This is a joint venture project of Government of Kerala and knitwear exporters in Tirupur.
NEW TIRUPUR AREA DEVELOPMENT CORPORATION LIMITED (NTADCL)
A Public Limited Company promoted by TEA jointly with the Government of Tamil Nadu, Government of India and Infrastructure Leasing and Financial Services Limited (IL & FS), Mumbai to supply water from Cauvery River – about 55 kms. from Tirupur for industrial and domestic use not only by the people of Tirupur but also those in more than 30 villages, en route the pipeline. The massive project estimated to cost Rs. 1100 crores, also envisages underground sewerage system for Tirupur, collection, treatment and disposal of sewerage and solid waste.
TEA has teamed up with the Tirupur Dyers Association, collected Rs. 10.00 crores towards equity contribution of the industry and handed it over to the Hon’ble Chief Minister to Tamil Nadu on the inauguration of project work on 20th June 2003 at Tirupur. This project, an outstanding example of Public Private Partnership of massive scale, funded by leading international financial institutions like US AID, is the first of its kind in the whole of Asia. Water project is already completed where Industries and people from wayside village and Tirupur are happy because the long felt need is fulfilled.
NIFT – TEA KNITWEAR FASHION INSTITUTE
An institution to cater to the manpower needs of knitwear industry and export business in all areas of designing, manufacturing, marketing and administration. Promoted at an investment of Rs. 2.5 crores with support from the Government of India (Ministry of Industry) and ICICI, the institute has state-of-art machinery and equipment, including CAD and offered testing, training and designing services to the industry. The Bachelor Degree programs offered are Apparel Fashion Design, Fashion Apparel Management, Garment Production and Chemical Processing, Apparel Manufacturing and Merchandising. The Institute also offers Master Degree in Apparel Business and Apparel Production. The college is now affiliated to Bharathiar University, Coimbatore.
INDIA KNIT FAIR (IKF)
To attract buyers from all parts of the world to the citadel of knitwear industry, TEA and AEPC constructed a Trade Fair Complex of international standards in a place about 12 kms. from Tirupur, providing easy and fast access from Coimbatore airport to buyers visiting the Fair. So far 27 knitwear fairs have been conducted in Tirupur. The substantial increase in export of autumn / winter wear from Tirupur is on account of these fairs. Now Indian Knit Fairs-both summer and autumn / winter – are well known globally any buyers from world over look forward to these fairs with lot of interest.
A Convention Centre has been constructed in the IKF Complex for conducting programs, meetings etc. and it was unveiled in May 2007.
NETAJI APPAREL PARK
TEA visualized that Tirupur should have world-class production facilities to face the competition and challenges emerging in the post quote-free regime. As a creator of par excellence, he conceived a huge project to build knitwear manufacturing facilities superior to those existing in developed and competing countries. The foundation stone was laid in July 2003 and work commenced in September 2003. The Park, first of its kind in India has come up in a 166 acres site in a strategic location in NH47. The park has 52 knitwear manufacturing facilities, with a total built-up area of about 2.0 million sq.ft.The Park was opened on 10th January 2005 at New Tirupur – the new name for the park site.
With state-of-art machinery and world class infrastructure created with an investment of Rs.300/-Crores the park provide direct employment to more than 15,000/-persons. The park contribution for knitwear export turnover of Tirupur is about Rs.1500/- crores per annum.
TEA-St. JOHN LOGISTICS PVT. LTD.,
TEA and St.John Freight Systems Ltd., have formed a Joint Venture Company in India of 50:50 ratio, in the name of TEA – St. JOHN LOGISTICS PRIVATE LIMITED and it was registered on 16th February, 2006. The new JV company having registered office in Tirupur and Administrative Officer in Tuticorin would float a subsidiary company in Antwerp, Belgium shortly for warehousing and distribution of garments in Europe. The JV company will give one stop solution for end to end service with focus on Supply chain for garment distribution at Antwerp, Belgium.
TEA – St. John JVC will employ sales team in Antwerp. The JVC has committed to provide seamless supply chain solutions in Europe for Tirupur sellers and European buyers. This joint venture company is also planning to act as a trading house with exceptional logistics back-up advantages, which will add tremendous value to relationships with existing buyers and also help to forge new partnerships.
In future, the JVC Plans to have own retail shops/ showroom in major cities in Europe and own warehouse in Antwerp. Further to success of the Venture, similar joint venture subsidiary company could be started in UK and USA also.
TEA E-READINESS CENTRE
Tirupur Exporters’ Association has entered into a Memorandum of Understanding with Microsoft Corporation (India) Private Ltd., to set up e –readiness centers which offer e-readiness programme, e-learning modules and enhance solution delivery capability for local system integrators, resellers and independent solution vendors.
Microsoft will also develop a Tirupur cluster Portal which will have a public interface and a certain person accessible to SME community in Tirupur. Microsoft will help and provide online platform to facilitate collaborative exchange for addressing issues like regulatory compliances, environmental issues quality and certification procedures, Project Management and Textile design development.
[ * Courtesy : Tiruppur Exporters Association]