CBC Fashions (Asia) Private Ltd. is a leading garment manufacturer and exporter from Tirupur. Just as the case with several other companies from the hosiery town, CBC Fashions had humble beginnings before taking rapid growth strides. Well-equipped infrastructure, including, modern production lines, in-house quality testing lab and centralized cutting, printing and embroidery divisions, has been one of the strong points of the company.
In an exclusive interview, Mr. T.R. Vijaya Kumar, Managing Director of the company, spoke at length about the company’s history, its product range and future plans. Mr. Vijaya Kumar, who is also the General Secretary of the Tiruppur Exporters’ Association (TEA), also shared his views on some of the challenges facing the apparel industry and how the Association intends overcoming them through its initiatives.
We began by asking Mr. Vijaya Kumar to give an insight into the company’s initial years. How did it all start?
Speaking about the journey, Mr. Vijaya Kumar said: “The Chitralaya Banian Company (CBC) was started in 1976 by my father Mr. Ramaswamy. He started out with about 10 machines. We gradually grew into a 25-20 machine company. We were basically manufacturing innerwear, catering only to the domestic market.”
Mr. Vijaya Kumar entered the business in 1996 after completing his Masters Degree in Management. From 1996 till 2003 he worked in various departments of the company and gained practical, hands-on experience. In 2004, his brother too returned after his studies, and the company decided to start an exclusive export division. “That is how CBC Fashions started. We started with around 80 machines. Today the number has grown to around 800 machines,” he said.
In 2008 the parent company, Chitralaya Banian Company, and the export division, CBC Fashions, merged together to form CBC Fashions (Asia) Private Ltd.
The CBC Group also has a spinning division – BKR Textiles, located in Kangeyam, Tamil Nadu. “While we do around Rs. 130-crore business in garments and Rs. 80 crores in the spinning division, we want to increase the Rs. 200-crore business into a Rs. 500-crore business by 2025,” he added.
On TEA initiatives
As someone who is also closely involved with TEA and working towards the growth of the apparel sector, Mr. Vijaya Kumar felt that unless competitiveness is increased the sector would be struggling.” Every year the buyers expect a lower price than earlier. Competing countries such as Vietnam, Bangladesh, etc., are growing very fast. They have seen 20-25% growth in recent times, while there has been a 4% decline in the Indian market. This is particularly so after the roll-out of GST. In October 2017, there was a 40% dip in sales as compared to October 2016. Similarly in November and December there was a 13% dip. Overall, we are about 4% short of our turnover target”, he pointed out.
“In Europe recessionary trends are continuing. Things in the US market too are not encouraging. So far as new markets like Canada and Turkey are concerned, the duties are too high and we can do business only if the FTA is signed. TEA has been putting in a lot of efforts on this front,” Mr. Vijaya Kumar revealed.
According to him, Japan is emerging as a potential market. However the Japanese insist on very high standards. Continuing further he stated: “Sometimes our exporters are not able to match up their expectations. They expect zero per cent tolerance. Till now they were dependent on China. However, since they are no longer in good terms with China, they are now looking towards India. Some of them have already set up offices in Tiruppur. So, we need to take steps to capture the Japanese market.”
Russia is another highly potential market. “Till now they were dependent on China. However, with China no longer being cost competitive, they are now looking towards India. There is potentially Rs. 2 lakh-crore business available there,” he explained.
Mr. Vijaya Kumar highlighted the fact that Tirupur is now doing exports worth Rs. 40,000 crores and is targeting Rs. 1 lakh crores by 2020. This is possible, given the fact that there is huge untapped potential available globally. Elaborating on the fact, he said: “We are catering only to 3% of the global market, whereas Vietnam is catering to 6-7%, Bangladesh to 14% and China about 30%. China is also losing its cost competitiveness and we need to find ways to capture the markets being vacated by them.”
Diversification into other areas such as technical and medical textiles, is something that TEA is working towards for exporters in Tirupur. A recent conference held in Tirupur was attended by all leading textile research institutions.
“Tirupur is focusing only on cotton materials which is about 25% of the market, whereas other materials enjoy 75% market share. We therefore need to look seriously into diversification,” he pointed out.
Mr. Vijaya Kumar also felt that just like the Silk Board and the Coir Board, knitwear too needs to have its own board for growth promotion.
Another interesting initiative from TEA has been to train and implement lean manufacturing methods in factories in Tirupur. “So far 120 units in Tirupur have been practicing lean. They have been able to save 15% on their overall production costs. We want all companies in Tirupur to do so and reap the benefits,” he said, while also adding that the training for lean is being provided by NIFT-TEA.
Similarly, denim knitting is another area of TEA’s focus. The Association is also focusing strongly on the knitting and printing segment.
Going into details of the projects Mr. Vijaya Kumar said: “Recently two projects have been approved. These projects are coming up at a cost of Rs. 15 crores, with Rs. 12 crores coming in the form of Central Government aid and another Rs. 3 crores from SPG. Finally, our third focus area is a design studio. Till now we have been doing only the buyers design. With our own design studio, we can even start selling our design to the buyer. It will be a value addition.”
As many as 20 committees have been set up by TEA in order to oversee the progress of these projects.
Well-known brand
A lot of companies in Tirupur have now been focusing on branding. What about CBC Fashions? Does it have such ambitions? Replying to this query, Mr. Vijaya Kumar said: “CBC is already a well-known brand in places like Andhra and Karnataka. At CBC Fashions, we are manufacturing for leading labels such as Westside, Max, Lifestyle, etc. In exports our focus is on ladies and children innerwear, as well as lady’s tops. Our present production capacity is 30,000 pieces per day. Fortunately for us our customers buy throughout the year, enabling us to have good business flow.”
The top management of the company has charted out a clear-cut roadmap for its future growth. One interesting part of it is a proposal to start a plant at Jaffna in Sri Lanka. Going into details behind the logic for the idea, he said: “Issues such as inadequate availability of labor, poor infrastructure, water scarcity, etc., led us to look at other places for expansion. We have planned to start 3 units in consecutive years. This year we will be starting a plant in Madurai. Next year, we will start one in Trichy. Subsequently, we intend starting a unit at Jaffna.”
“We are at present doing business worth Rs. 130 crores with about 1,500 employees. We have targeted Rs. 500-crore business in 2025. We intend to give employment to about 5,000-6,000 people by 2025. The company is also planning to go in for an IPO in 2025,” Mr. Vijaya Kumar added.
By M.K. Prabhakar & Mohan Raj