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Chinese cotton + imported machinery + local woman power = Wal Mart product.
A local entrepreneur chips in Rs 10-15 crore (Rs 100-150 million) into the business and the project is ready for exports.
But why Chinese cotton?
"You won't get the bulk quantity of cotton at a reasonable price from Indian mills," said Sunil Nair, commercial manager, Leela Scottish Lace Pvt Ltd, one of the two apparel units functioning at the International Apparel Park of Kerala Industrial Infrastructure Development Corporation at Menankulam, near the state capital of Thiruvananthapuram.
Leela Scottish Lace, promoted by Leela Group chairman Captain C P Krishnan Nair is a major export house functioning in Kerala. Captain Nair was the first in the organised sector to set up a unit to produce cotton laces in India with Scottish Collaboration in Leela Scottish Lace Private Limited.
He was also instrumental in organising the Small Exporters' Guild which helped many small exporters. Captain Nair has promoted The Leela Kempinski, Mumbai in 1986, The Leela, Goa in 1990 and The Leela Palace Kempinski, Bangalore in 2001.
Leela Scottish Lace is one of the several cotton mills that have started functioning at the Kinfra Park. And all of them use Chinese cotton to weave success stories of textile exports.
Leela exports 100,000-125,000 pieces of readymade garments every 26 days. The total requirement of cloth is 250,000 metres.
Sunil Nair says the biggest advantage of Chinese cotton is that major US companies such as Wal-Mart, Arrow and Eagle for its texture, colour, fabric and other relevant parameters certify it.
"There are no hassles in getting the samples of Chinese cotton accepted. Indian cotton would have to go through quality procedures before being accepted in the international market," Nair pointed out.
However, for certain low volume high quality orders from the US and Europe, the exporters do depend on Indian cotton.
Leela Scottish Lace will recruit 1000 more employees to its existing strength of 1200 within a year. The total built-up space would be one lakh square feet from the existing 50,000, Nair said. Another company Texport, Bangalore will start functioning soon from the Apparel Park.
Maryan Apparel is another major cotton player at the Kinfra Park. The company has a larger capacity of 1000 machines employing 1200 employees. Soon the company plans to have 1750 machines facility at a new apparel park to be set up at Kannur and another 850 machines at Kinfra park itself.
"Currently, the world market for ready-mades is roughly $400 billion. China has 50 percent market share compared to India's three percent. This will grow to six percent in the next three years," estimates T K Muraleedhan Pillai, Chief Executive Officer of Maryan Apparel.
This explains why so many sub-15 crore export oriented units are coming up in Bangalore, Madras and other cities.
Maryan Apparel is part of the Rs 100 crore (Rs 1 billion) Creative Home Fashions having six factories in Delhi. Leela Group has altogether 25 factories spread out in Bangalore, Madras, Thiruvananthapuram and Kochi. The Kochi and Thiruvananthapuram units mostly cater to orders from Wal-Mart, Sunil Nair said.
It took so much persuasion from the Kerala government and Kinfra Park to get three investors to its Apparel Park that was launched over a decade ago.
Whether it is Captain Krishnan Nair of the Leela Group or Thomas T Olickal of the Maryan Group, it was the love for their native land that brought them to Kerala.
Maryan's ultra modern 80,000 sq ft. production facility has CCTVs in each of the production floors. Every second the cameras record the work being done by employees and this can be accessed by their clients sitting in Europe and US by logging on to the website of Maryan, Thomas T Olickal, managing director, Maryan Apparel told Commodity Online.
"IT and biotechnology can only provide employment to engineering graduates and above. What about the matriculates and college dropouts? For them these apparel units which provide the training, reasonable salary, clean factory atmosphere is the only option," Thomas pointed out.
A unique feature of such export-oriented units is that 95 per cent of the work force is women mostly matriculates or even less. They get an average of Rs 2500 per month and all other company benefits. If they don't, the company stands to lose orders from Wal Mart and other clients.
"For us, abiding the labour laws of the land is also as important as the quality of the product and productivity," says Nair. To ensure this, they periodically conduct surprise checks at production facilities.
This is a highly competitive market, the prices dictated by the likes of Wal-Mart and those who can deliver ultimately wins in this high volume, low-value game.
And the apparel units in Kinfra Park are working hard to be in the good books of Wal-Mart.