Developing a new centre for an industry is always a challenge, but when the industry is the apparel industry, which not only entails many variables, but also involves huge human resource management, the task is a wee bit tougher. Picking up the challenge, the Government of Odisha is very keen to establish the garment industry in the state and is willing to go the full distance to understand the special needs of the industry and create a business environment that is flexible, responsive and compliant to the growth of the industry. Team Apparel Online, led by Deepak Mohindra, Editor-in-Chief, recently met and discussed the uniqueness of the industry with Sanjeev Chopra, Principal Secretary, Industries Department, Government of Odisha and Sanjay Kumar Singh, Commissioner cum Secretary, Skill Development and Technical Education and CMD, Odisha Industrial Infrastructure Development Corporation. The positive and passionate attitude of these top officers was very encouraging for the prospects of the industry in Odisha.
The city of Bhubaneswar is a clean and green city with all the amenities that justify its position as the capital city of a state on the growth curve. Being endowed with abundant natural resources, the state also boasts of a strong disciplined worker base of both men and women who are culturally open to migrate for better employment opportunities. “The labour from Orissa forms the backbone of many successful textile/garmenting hubs in India, including Surat, Bangalore and Chennai. It is now time to use this workforce to develop the industry within the state,” argues Sanjay, batting strongly for the development of the apparel manufacturing industry in Odisha.
The state boasts of many training centres for apparel industry under the Skill India and Integrated Skill Development Programs, and since the exposure to the apparel manufacturing industry is wide-spread with large migration already happening, the synergy is obvious. “The Government of Odisha is very proactive on skill development and it is a major agenda for them right now… The whole political environment at the moment is geared and focused on upscaling employment… Which industry can be better than garmenting to create job opportunities in large numbers with relatively less capital investment?” reasons Sanjay. With large tribal population being integrated into the workforce and wages in Odisha comparable to Bangladesh, the state no doubt is an attractive destination for those looking for competitive edge in garmenting.
The preferred destinations…
The ‘Make in India’ thrust has motivated many and the time to move away from comfort zones has arrived. But where to move, is a question mark. Many of the technology providers believe that Odisha is the ideal place to set up a garmenting business today. “Look at the amount of female workers in Odisha, a state where the social ethos encourages women to work unlike Bihar. With a traditional base in textiles, the basic foundations are in place,” reasons Pavan Kapoor, MD, IIGM. His opinion is strongly seconded by Anil Anand, MD, HCA. “The State Government is very active in promoting investment and there seems to be a serious intent looking at the number of high level conclaves being held to woo the industry. Also Shahi, which is a trend setter in taking factories to new areas has already set up a unit, there must be something positive,” he argues.
The serious intent of the Government in developing this sector is evident by the fact that a textile policy is being framed for the first time and a separate chapter is being written especially for the garment industry. “We are now looking at a separate chapter for apparels, as we realise the need, which will delay the policy, but is important for long-term growth,” says Sanjeev. The openness of the Government officials in listening to experts and admitting that ‘out-of-the-box’ thinking is the only way forward, is indeed a fresh whiff of air, signifying the changing attitude of those in power.
While mining has in the past been the major revenue generator for the state, unfortunately it has not been able to generate enough employment. Of late, one of the biggest realizations has been of the potential significance of the apparel industry to the domestic economy of the state. Under a new agenda, five industries are the focus areas for development, and textile and apparel find a mention. In fact, one of the main purposes of setting up IDCO was to ensure that the right infrastructure is established to support excellence for apparel manufacturing.
KP Prasad of ATE shares that his company has recently supported the new unit of Mumbai based Maxima Fashions on the borders of Karnataka and Maharashtra in an area that has only untrained labour. He also shares that many companies in Mumbai are contemplating to move into the interiors, but it is too early to take names.
There are many ‘plus points’ for the success of the garment industry in Odisha which Sanjeev and Sanjay both endorse like trainable and response labour force is only one of the. The state is rich in natural resources, it has its own port in Paradip, besides other ports like Dhamara and Gopalpur and some others being developed under public-private partnership, an international airport in the capital, good roads and train connectivity, huge land bank owned by the Government, also being a surplus energy producing state there is good and cheap supply of electricity. “If we charge say Re. 1 for a unit of electricity, the rate nearest to us is Rs. 1.5 that is the difference,” explains Sanjay. The Government has in the meanwhile already started the process of developing air connectivity to Dubai and Singapore, as they are major centres for world trade. Tenders have been invited and tax on aviation fuel has been reduced to attract airlines to start direct flights to these destinations.
Two major garment companies Shahi and Madura have already set up units in the heart of the city. In fact, Shahi and Aditya Birla Group (Madura) are being presented as poster boys for investment in Odisha and now Jockey (Page Apparels) has signed an agreement to set up a factory in the state and Color Lines has promised to invest, following an elaborate two-day investor meet held in Bangalore recently to update industry on the incentives that the Government is offering. While the major thrust was on the IT sector, with the CM also making an appearance, a session was held for the garment industry in which some local companies did attend. Expressing satisfaction at the outcome of the event Odisha Chief Minister Naveen Patnaik said, “We have received a total investment announcement of Rs. 90,490 crore during the two days with employment potential of more than 70,000. We are now organizing Make in Odisha conclave on December 1-2 this year at Bhubaneswar to take the work forward.”
• Proactive Government takes the lead
• Bhubaneswar the nerve centre for new cluster
• Shahi and Madura already in the state
The area that is being promoted and developed as a Fashion and Apparel Park – Ramdaspur – is on the outskirts, nearly 25 km from Bhubaneswar. The area is being developed like a mini city with all amenities to facilitate comfortable stay for management and families, also common facilities are coming up for manufacturers like ETP, dormitories, training centre, etc. As a strategic move, ancillary units are being approached to open shop in the cluster to develop the right ecosphere required for successful manufacturing of garments.
Sanjay is quick to add that Ramdaspur is not a typical textile park, and the terms and conditions are very flexible. Freshness is in the way officers’ areas open to ideas and are very determined to make the cluster a benchmark in industrial park development. “There are no real success stories for apparel parks and we are aware of the critical areas that hamper the development. So we want to pre-empt and address the issues before hand,” says Sanjay. One the interesting experiments that the Government is contemplating is to build the sheds with all facilities so that companies can just walk in and start business. “The plug and play model could make it worthwhile for companies to explore the opportunities, as it ensures easy entry, but we will also mix it with independently-owned units so that companies are more serious to make it work,” adds Sanjay.
However, the road is still long and many critical directions need to be discussed and addressed to ensure smooth implementation of the ‘intent’. For one there is no study on what could be the potential products that could competitively be produced in the state, also just inviting the exporters and manufacturers is not enough, there has to be interest from the buyers to push the industry to invest; Ethiopia is a classic example of how buyers can play a pivotal role in developing manufacturing bases, and lastly, but the most important, is how to put across the message to an industry that is reluctant to move out of its comfort zone.