Levi's Jeans: Made in Bangalore

Bangalore, it of the drying-up-gardens, pubs-by-the-handfuls, and techies-you-may-trip-over fame, has a secret. And it's a big one-think of a business of some Rs 4,800 crore and 300,000 people tripping along at a low 30s growth rate over the past three years. The growth rates match, but that's about all-300,000 is six times what the city's glam-biz, infotech, employs. This is Bangalore's booming ready-to-wear industry, an anachronism of sorts in a wannabe-metropolis (it may already be one, but the people who decide on such things in India seem reluctant to recognise the fact) that desperately wants to be the centre of gravity of India's knowledge businesses-education, infotech, it-enabled services, healthcare, bioinfomatics, and biotechnology.

As the growth rate will aver, this is one business that hasn't slowed down in the early zeroes-Karnataka government data puts the number of garment exporting units that have come up in the state since 2000 at 120. G.D. Agarwal's is one of them. The 60-year old Agarwal, a soft-spoken, first-generation apparel export baron founded Sonal Garments in Mumbai in 1978. Today, with export sales of Rs 150 crore, the company is one of India's largest garment exporters. Five years ago, when Agarwal decided to expand Sonal's operations he looked outside Mumbai. Costs were rising in the megapolis and he was sure there was a better option somewhere out there. There was: just six months old, Sonal Garment's latest Peenya Industrial Area facility in Bangalore's industrial heartland turns out 25,000 garment pieces a day, compared to the Mumbai one does 6,000. Agarwal can't stop talking about the cluster-economics (several garment manufacturers are based in the city) that makes Bangalore the number one destination for apparel companies. "This enables the availability of the right talent at the right price," he gushes and proceeds to rattle off the other things the city has going for it: "a receptive state government and a peaceful and productive labour force." So there.

The New New Fling

The apparel business has been a fixture on Bangalore's business topography. Long before the city had its first pub-for the record, Ramada, which emerged on the scene in 1982-it, along with Chennai, Tiruppur, Delhi, and Mumbai were the main centres for garment production in India. Only, "most fresh investments happening in the sector are taking place in and around Bangalore," explains Sriram Srinivasan, the Managing Director of Indus League. Srinivasan, a professorial 48-year-old who helped Madura Garments establish base in the city in the late 1980s-in the city's head-hunting community Srinivisan was, arguably, the most sought after exec before he left India for a stint with Indonesia's Polysindo in the mid-1990s-believes the presence of every one of India's leading apparel companies, with the exception of Raymond's adds to Bangalore's softwear appeal.

Still, that's an appeal built around the cold calculus of business models. Courtesy the legacy of history, the garments industry in Mumbai and Delhi are still largely 'piece-rate' driven as industry insiders refer to it. In manufacturing lingo that is the equivalent of unit-production as opposed to the efficient assembly line production process pioneered by a certain Henry Ford. The factory-style of garment production, in contrast, has always been popular in Bangalore. As in almost any other business, automated production equals better quality and inventory control, higher efficiencies, and lower costs. That could explain why companies that were initially content to move their corporate HQ to Bangalore are now doing the same with their production facilities. Srinivasan would also like to believe that ''unlike most apparel companies in Mumbai or Delhi that are family-managed, those in Bangalore are run by professionals". There could be some substance to that. Arvind garments vet Govind Mirchandani now heads Personality, the company that owns the Weekender brand and which is, in turn, owned by Gokuldas Images, a family-owned apparel exporter.

''Apart from labour differential, where countries like Bangladesh have a slight advantage, Bangalore scores high because of higher productivity and quality'' Govind Mirchandani, Head, Personality

The Supply-Side Equation

Four hours (203 kilometres) from Bangalore lies Salem. This Tamil Nadu city is famous for its mangoes-they are huge, retain their green colour when ripe, and boast a unique chalky-sweet flavour-steel and processed yarn and fabric. There's a strong geographical case, then, for apparel manufacturers to put down roots in Bangalore. Personality's Mirchandani believes the city will come into its own, not just as a national, but a regional centre of garment manufacture once quota restrictions-countries have quotas on the volume of garments other countries can export to them-go in 2005 as stipulated by WTO. Bangalore, he claims, has enough attractions as a centre of garment manufacture to attract exporters who currently operate out of Pakistan, Bangladesh and Sri Lanka. "This may sound far fetched now," he admits, "but apart from labour differential, where countries like Bangladesh have a slight advantage, Bangalore scores high because of higher productivity and quality."

''Levi's is a trendy youthful brand; Bangalore represents this image. We try new introductions in Bangalore as it gives us an accurate barometer'' C.S. Suryanarayanan, Country Manager, Levi Strauss (India)

The S.M. Krishna-led Congress government in the state, an opportunist in prefixing a sector to the word capital and hard-selling Bangalore to potential investors, domestic and global, has been quick to catch on to the trend. Today, says Satish Mahajan, the Chairman of the Clothing Manufacturing Association (South), "the state government is aggressively wooing exporters." "The harassment from regulatory authorities is minimal and there is a special Green Card Scheme to facilitate movement of goods from organised exporters." That may seem inconsequential but as Mahajan adds, "all of us in the apparel business work to tight deadlines-so, a scheme like this that speeds up the delivery-process helps."

As for the government, it isn't the glory associated with being India's apparel capital it is after, although that is very much part of the equation. "The state government is clued into the employment-generation potential of this sector," says K. Thimmarayappa, the Managing Director of Visvesvaraya Industrial Trade Centre, the government arm that oversees exports. It isn't just employment that is on Thimmarayappa's mind; it is the other e-word, exports. Today, apparel is Karnataka's second highest export, after the electronics and computer software segment. That number could be higher than the documented Rs 4,800 crore, says Mahajan. Several companies have corporate offices in Delhi and Mumbai, he explains, reeling off names such as Leela Apparels, Richa & Co, K. Mohan & Co (Exports), and Shahi Exports, but their manufacturing facilities are based in Bangalore. "In three years," adds Mahajan, by which time exporters will have to show the point of manufacture, "Bangalore's apparel exports could touch Rs 10,000 crore."

There will be other Indian cities that run Bangalore close but man-made factors apart, the city has just the kind of climate for apparel manufacture. Its more-temperate-than-temperate ambience, claims Suparna Mitra, the Head of Lee (part of Arvind Brands), is just right for some garment-types. "Chennai is a serious competitor," she agrees, "but because of climatic conditions there, some garments soil easily and have to be manufactured in Bangalore."

The business of fashion is all about keeping pace with trends and Bangalore, swear apparel-execs, has what it takes to do that. By keeping an eye on the export activity, explains Vasant Kumar, Vice President (Marketing), Madura Garments, "companies can pick up fashion trends". "In most cases domestic trends trail international ones by a season." And the city is a great place to test out new styles, adds C.S. Suryanarayanan, Country Manager, Levi Strauss (India). "Levi's is a trendy youthful brand; Bangalore represents this image; we test market our wares and try new introductions to the Indian market first in Bangalore as it gives us an accurate barometer of whether we need to fine tune our strategy."

The usual complaints about power, rather the lack of it, linger (garment manufacture, especially that of bottoms, is a power-intensive process). The quality of roads is another area of concern-Bangalore doesn't have a seaport and exports have to be routed through Chennai or Mangalore. And the presence of an international airport-one has been in the works for some time now-will help buyers from international fashion labels to wing into Bangalore direct. The state's industry minister R.V. Deshpande makes all the right noises. Everything that needs to be done to retain existing companies and attract new ones will be done, he promises. Roads will become better. The state's power infrastructure is being upgraded. And the international airport project is on course to achieve financial closure. "We are committed to ensuring that Bangalore does become the apparel capital of not just India but the world," he promises. That may be typical politico-speak, but India's Silicon Alley has shown that it is no minnow in the softwear business.