Draft End of Project Report under the project Support to Country Effort for SME C luster Development of UNIDO

(US/IND/01/193) during 2002-05 JEANS CLUSTER OF BELLARY By: UNIDO Cluster Development Programme November 25, 2005 1. Executive Summary Bellary, the second important garment ialization in manufacturing jeans for made from cotton, gabardines, chinos, value of the garment output from the n (USD 23 million) per annum. cluster in Karnataka is known for its spec men, although it manufactures formal wear cavalry twill and half pants for boys. The cluster is estimated around Rs 1000 millio

The cluster comprises of small and tiny units, which perform only a portion of t he garment making like sewing, pocketing, buttonholing as job work for the merch ant manufacturers. Hence the fabric was moving to different units before taking the shape of a garment. Most of the merchant manufacturers outsource their produ ction from such sub-contractors. Such sub-contracting establishments are mostly operated from their residence or from small spaces hired for the purpose. The diagnostic study strongly suggested that the cluster faces problems related to non-availability of appropriate infrastructure facilities, inconsistency in q uality, low productivity & out-dated technology, underdeveloped human resources and restricted market. Of these, lack of proper infrastructure was identified as the major constraint f or long-term growth. Hence, the strategy for intervention hovered around rejuven ating the various industry associations through training and exposure and throug h them establishing necessary infrastructure facilities to ensure smooth long ru n growth prospect of the cluster. Once established, these infrastructure facilit ies were provided support to stabilize through appropriate activities. Experimen tations were also done to promote marketing initiatives at this juncture. Due to the efforts taken during the programme, three industrial associations wer e revived and strengthened. Garment training institute and textile testing centr e were set up. Firms are coming forward to invest in setting up their own manufa cturing facilities and are making efforts to establish Textiles Park. Linkages w ith BDS, technical support institutions and apex trade promotion bodies were est ablished. Improvement in quality and productivity in manufacturing and processin g units were demonstrated. For the future the newly created industrial infrastructure will require support before becoming completely stabilized. Efforts for the Apparel Park should conti nue. Bellary also has to prove its ability to manufacture good quality, high fas hion garments. Efforts made in this direction by creation of consortiums of firm s also need to continue. 2. Evolution of the Cluster and its Current Status Origin of the cluster dates back to First World War. Darji community in Maharastra , which has got native skill in tailoring, moved to Bellary to stitch uniform fo r the soldiers who were stationed there. After the withdrawal of the soldiers fr om Bellary, the community started stitching uniform for schoolchildren, which go t reputation all over South India. Later, when competition emerged, it started d iversifying to stitch mens bottoms wear. The cluster took the shape of an industr ial cluster during 1970 when the progressive traders from Rajasthan came forward

to market mens bottom wear all over the Southern States by utilising the skill a vailable in the cluster. Witnessing the growth of the relatives and neighbours, people from the same comm unity migrated to the cluster to invest, mostly on trading. Existence of sub-con tracting system in the cluster attracted them, as they were able to start their business with less capital without the need to invest in manufacturing facilitie s. During initiation of intervention, the cluster was growing in terms of value and quantity. But it was slow as compared to the over all growth of the industry be cause of its inability to exploit the market potential as explained earlier. Pro fit margin was coming down every year because of stiff competition. The annual t urnover of the cluster was estimated around Rs. 1000 million (USD 23 million) an d it provided employment to 10,000 people. 3. Key Cluster Stakeholders and their Linkages The principal firms are the Merchant Manufacturers. They are the people who book o rders and purchase the fabrics as per their order requirements. They do not inve st in any facility for manufacturing. They employ one or two cutting masters who c uts the fabric as per their standard panels, for each size of the garment and fe w checkers to check the quality of the garment after completion. Other than cuttin g, checking and packing, no other activity takes place at the premises of the me rchant manufacturers. There are 160 such merchant manufacturers in the cluster. The other important cluster stakeholdersare the sub-contractors who perform the jo b work for the merchant manufacturers. They have installed only indigenous secon d hand machines. Depending upon their ability to invest, they install either sew ing machine or machines required for specific operations like looping, eye butto nholing etc. They pay their employees on piece rate basis, as there is no contin uous order through out the year. There are 500 such sub-contracting units. There are 39 washing and dyeing units in the cluster. Except few, who have estab lished the units for their own captive requirements, others do job work for merc hant manufacturers. They work on very narrow profit margin. As there is pressure from the merchant manufacturers to reduce the cost, they use cheap chemicals an d crude processing techniques. Finishers are another section of the cluster stakeholders, who are from the washer men community. They do their job on piece rate basis. They perform their operatio n at the premises of the merchant manufacturers using their won coke iron boxes. Coke iron boxes not only spoil the quality of finishing but also damage the zip pers, buttons and even penetrate the fabric due to heaviness of the box used in ironing. Fabric suppliers, machinery suppliers, accessory suppliers, chemicals & dye stuf f suppliers, machinery repair service providers are the other cluster stakeholde rs in the cluster. But their role is limited to taking care of the demand from t he above important cluster stakeholders. District Industries Centre (DIC) was active in the cluster and was extending loa n under PMRY, providing training for the rural artisan and women under several s chemes like VISWA, YESHASWINI apart from granting subsidies and issuing certific ates for the SSI units under the administrative control of Centre for Entreprene urship Development of Karnataka (CEDOK), an organization promoted for conducting entrepreneurship development programme by the Ministry of Industries and Commer ce of the Government of Karnataka (CEDOK) was working in close co-ordination wit h DIC. Small Industries Development Bank of India (SIDBI), Bangalore took initia tive to develop the cluster under National Programme on Rural Industrialization

(NPRI) programme during October 2000, through CEDOK. During the last two years t wo training programmes to improve the pattern making and design development and exposure visit to other cluster to have exposure on the benchmarking manufacturi ng practices were conducted. Expertise of the National Institute of Fashion Tech nology (NIFT) and BDS provider were availed for conducting these programme. One BDS provider visits the cluster once in a quarter to follow-up with the units, which implemented the suggestion made earlier. Department of Handlooms and Textiles of the Government of Karnataka was concentr ating mostly on issues relating to handlooms and power looms. Syndicate Institut e of Rural Entrepreneurship Development (SIRD) promoted by Syndicate Bank was pr oviding training on tailoring, automobile servicing, plumbing and electrical wir ing. These are two prominent industrial associations namely Bellary District Chamber of Commerce and Industry (BDCCI), which is more than 40 years old and Bellary KI ADB Industries Association (BKIA), which is more than a decade old. But these as sociations do not have organic linkages with the garment industry. Bellary Dress Manufacturers Association (BDMA) an association of the merchant manufacturers wa s formed in 1977. During its existence BDMA was playing intermediary role to set tle the disputes between its members, representing issues relating to sales tax to State government, apart from settling the issues relating to payment of wages for the workers and piece rates for the subcontractors. Bellary Jean Washers Association (BJWA) is an association formed in 1999 by the washers and dyers, primarily to negotiate the charges to be collected from their services from the merchant manufacturers.. It organised a workshop for treating the effluents from the dyeing units in association with DIC and Karnataka Clean er Production Center, Bangalore. BJWA was lying non-functional.

4. Major Problems The diagnostic study underlined the following major problems at the time of inte rvention: Non-availability infrastructure facilities: There was no institution in the clus ter to provide training to upgrade the skill of the shop floor level employees t o handle high-speed machines. Also, there was no institution in the cluster to t est the quality of the raw material and finished garment and to provide technica l support to solve the problems relating to manufacturing and processing. Again unlike other places, Bellary does not have sufficient building space that could be hired to establish a manufacturing unit with 30-40 sewing machines. Working c onditions and amenities provided in the establishments, accessibility to the uni ts and road conditions in the town were sub-optimal. Again effluents from the wa shing and dyeing units were not treated properly before discharging them in the open drain. There was lot of scope to save energy and conserve resources used in the washing and dyeing units. Underdeveloped human resources: The workers themselves were not enthused to upgr ade their skill and knowledge, as they were of the view that they were entitled to get wages based on their output and quality was not their concern. They did n ot understand the importance and relationship between training, productivity and higher earnings. There was lack of proper training infrastructure too in the cl uster. Inconsistency in quality, low productivity and out-dated technology: As there wa

s no production under one roof, there was no system in place to check the qualit y of the garments while manufacturing. Productivity of the individual workers wa s low, as they did not have line production system. Technology level in the indu stry was primitive. Indigenous and second hand machines were used which were low in terms of their efficiency and quality. Since the employment was seasonal, th ere was no certanity that the employees who worked in one establishment during t he previous season would join again in the same establishment during the next se ason. Some of them were even leaving the cluster for better opportunities elsewh ere. Therefore new set of people were to be trained on the job again, which led to inconsistency in quality and low productivity. Every one in the value chain u sed to take his/her own time for completion of their work, without any commitmen t for delivery. Therefore, conversion of fabric in to garment used to take nearl y 30-45 days on an average in the cluster. Some manufacturers also compromised on quality of the materials, for reducing th e cost of production. Again, in the absence of commitment from the merchant manu facturers to provide them continuous orders, the sub-contractors were also not r eady to devote their entire facility for one merchant manufacturer and merchant manufacturers who produce comparatively better quality of garment were unable to execute their orders even though there was good demand for their garments and t hey were unable to keep their deliveries in time. Lack of active networks: In the absence of active industry associations, the fir ms in the cluster were working in isolation. There was no organic link between t hem and various developmental institutions that could have supported the cluster . There was also no attempt to develop other suppliers below, in the value chain . For example, the sub-contractors were not interested in upgrading the skill of their workers, even though the training would improve the quality and productiv ity level. Limited market segment: Garments manufactured at Bellary were mainly catering to price sensitive, low value segment of the market. Demand for such product was o nly during festive occasions, i.e. from September to January. Workers were eithe r unemployed or underemployed during rest of the year. Merchant manufacturers we re naturally competing among themselves by reducing the price or by offering mor e credit period to retain or win customers. The cluster was also facing competit ion from other garment clusters like Bangalore, Indore, Mumbai, etc. on better q uality and designs. Therefore, middle and high-end retailers preferred to stock supplies from such competing clusters even though the prices offered by them wer e slightly higher than the Bellary garments. 5 Vision of the cluster Long term vision for the cluster was therefore framed as Improving the quality of the garments manufactured in the cluster and positioning them from low value se gment to mid value segment of the market 6. Implementation Strategy Lack of proper infrastructure was identified as a major constraint for long-term growth. Hence, the strategy for intervention hovered around rejuvenating the va rious industry associations through training and exposure and through them estab lishing necessary infrastructure facilities to ensure smooth long run growth pro spect of the cluster. Once established, these infrastructure facilities will be provided support to stabilize through appropriate activities. Experimentations w ill also be done to promote marketing initiatives at this juncture. Accordingly, activities in the first six months of the year 2002 hovered around creation of aspiration and mutual understanding through exposure visits and form ation revival of industry associations. The year 2003 saw creation of aspiration s, linkages of the associations with various technical and support institutions,

apex trade promotion bodies and obtaining sanction for infrastructure projects. In the year 2004 efforts were concentrated to complete the infrastructure proje cts already initiated and extending support to the entrepreneurs to upgrade thei r present technology level by establishing linkages with BDS to improve producti on, quality, processing, finishing and market and also providing training for em ployees. During the first few months of 2005 (exit phase) efforts were primarily directed towards consolidation of infrastructure facilities created and strengt hening the local governance framework. 7.Major Activities 7.1 Promotion of support institutions and infrastructure facilities

7.1.1 Objective The cluster was having problems in providing training to its management and labo ur force. Besides the cluster needed support to provide testing facilities to ex plore export opportunities. Again non-availability of sufficient building space to set up one batch of production facility, even on rental basis, was another im portant bottleneck for the development of the cluster. The objective of this int ervention was to put in place or move towards providing appropriate facilities t o the cluster. 7.1.2 Steps involved Discussions were held with the concerned agencies to identify the exact gaps. Th ereafter the Project was drawn up in details. Simultaneously, appropriate agenci es that can extend necessary technical and financial support were identified and were also involved in this Project formulation stage. Associations were asked t o mobilise part of the Project cost that was required to be invested from their side, apart from the support that could be mobilised from other institutions. Th ey were also guided to constitute separate entities to implement the Project and to oversee the functioning of the project. All these were made with lead by rep resentatives of local stakeholders. Guidance was also extended till the Project was commissioned and also during its initial phase of operation. 7.1.3 Implementation 7.1.3.1 Labour Training Institute Having identified the need, efforts were made to collaborate with an institution which is already working for upgrading human resource skills in the cluster, li ke polytechnic, government industrial training institute or non government organ izations (NGOs) to avoid multiplicity of investment required in the infrastructu re. Syndicate Institute for Rural Development (SIRD) is one such organisation (p romoted by Syndicate Bank) that is providing training in the cluster, to create rural employment. One of the trades in which training was provided by the instit ute was tailoring. But the training was being provided in indigenous garment mak ing machines. Therefore, request was made to them to provide training in high-speed machines i nstead of indigenous machines and to change the method of training from unit sys tem to batch system, so that the people trained by them could be employed by loc al garment industry. It was agreed to meet the cost of such machines from the co ntribution collected by the members of Bellary Garment Manufacturers Association (BGMA). Since the cost of training was met from the funding by the State Govern ment and the Syndicate Bank managed the institute, it was thought working with t hem would be an ideal choice. However this did not work out and efforts were sta rted to promote a separate institution.

To avoid delay in implementation and reduce project cost, it was decided to iden tify a suitable premise that could be hired. Premises that was available at the District Industrial Training Center (DITC) of the State Government, was identifi ed as venue. A Project Report with an outlay of Rs.1.8 million was prepared to m eet the cost of machineries and to make necessary modifications in the existing premises. SIDBI, Bellary Zilla Parishad (District Administration) and Department of Industries and Commerce, Government of Karnataka came forward to fund 25% ea ch of the project cost, each. Remaining 25% of the project cost was mobilised by the members of BGMA. A separate body called Bellary Institute of Fashion Technology (BIFT) was consti tuted under the Societies Registration Act, to implement and govern the function ing of the institute. Representatives from SIDBI, DIC and CEDOK apart from the m embers of BGMA, who contributed for the project were members of BIFT. Four candidates who passed from Apparel Training Designing Centre (ATDC), workin g with the garment industry at Bangalore and are from Bellary and nearby places were appointed as faculties of the institute, considering the need for continuat ion of their services for the institute for longer period. Syllabus for the training was provided by ATDC considering the local industrial need. Faculties were sent for one month special training at the institutions and industry at Bangalore to prepare them to provide training that were required to be given for the industry at Bellary. After all such preparatory work the insti tute was inaugurated on 23 January 2004. Linkages with National Institute of Fashion Technology (NIFT), Bapuji Institute of Engineering and Technology and Directorate of Science and Technology were est ablished for mobilising technical and financial support for the Institute. Train ing for all the faculties of the institute was given to start a fashion-designin g course and to provide training for pattern masters. As a result, the institute conducted two training courses for the pattern masters and owners in the indust ry and commenced diploma courses in fashion designing. The Principal of the inst itute was sent to undergo training of trainers programme organized by FKCCI. Understanding with M/s Arvind Brand Pvt. Ltd, a leading corporate house owning l arge scale manufacturing facilities and many domestic garment brands was establi shed to provide employment for those trained at BIFT and to extend in house trai ning in their factory. Gulbarga University also recognized BIFT as one its exten sion centre for offering Post Graduate Diploma in Fashion Designing. 7.1.3.2 Textile Testing Centre Considering the limitation of BGMA to invest in another facility immediately aft er their efforts to establish a training centre, efforts were made to identify a suitable organisation, which could support the cause. Initial dialogues were he ld with Bellary District Chamber of Commerce and Industry (BDCCI) and Bellary Di strict Cotton Association (BDCA), who were trying to establish a testing facilit y to test the cotton ginned in their member units. Joint meetings were organised among the members of BMGA and BDCA at the office of BDCCI to bring consonance i n their efforts. As a result an understanding was reached among them to establis h a testing facility that would have the equipments to test cotton, fabric, garm ent, accessories and chemicals and the resources available with BDCA would be ut ilised for contribution to be made from the industry for the project. After mobilising necessary supports from the members of local associations the T extiles Committee, Regional Office at Bangalore, was approached for exploring th e possibility of setting up testing center at Bellary. In response to the reques t, the Textiles Committee conducted a preliminary survey on the viability of sta rting a testing center and the potential for the growth of the center.

Bellary District Cotton, Textile and Clothing Industry Development Trust was cons tituted comprising the representatives from the Bellary District Cotton Associat ion, Bellary Garment Manufacturers Association and Bellary Garment Washers Assoc iation, under the Indian Trusts Act, on 9 June 2004 to implement the project. On the strength of the survey and after the creation of the trust, the Textiles Committee came forward to support the proposal under the Public Private Partners hip Programme. Total cost of the project was estimated around Rs.8.2 million. Co st of the building for Rs.1.2 million was borne by the Trust. Cost of the equipm ents for Rs.7 million was borne by the Textiles Committee. Memorandum of underst anding to share the revenue from the center, after meeting all the necessary exp enses was signed between the Trust and the Textiles Committee. An official from the Textiles Committee has been posted to provide the technical support. Textile -testing center was commissioned on 18 November 2004. Financial support for trai ning of two officials posted in the centre was extended. 7.1.3.4 Infrastructure facilities Non-availability of sufficient building space even to set up one batch of produc tion facility, on rental basis was another important bottleneck for the developm ent of the cluster. Therefore, efforts were made to motivate the entrepreneurs t o create necessary infrastructure facilities collectively by utilizing the Texti le Center Infrastructure Development Scheme (TCIDS) available under the Ministry of Textiles. Two days motivational programme was conducted during January 2003, in which proj ects of different manufacturing capacity was prepared and presented by the membe rs themselves. Break-even level and pay back period was compared among the diffe rent projects. At the end of the two days discussions, 42 members came forward t o set up their own manufacturing units. Based on the response from the members, efforts to locate suitable land was made by BGMA. After analysing the merits and demerits of the various sites identifie d, it was decided to create such infrastructure facilities in an area of 40 acre s of land nearer to Gugga Reddy village, where road and transport facilities are already available and is situated at 6 kms away from the center of the Bellary town. The District Industries Centre issued notice for the acquisition to the ow ners of the land at the request of BGMA. However, there was delay in continuing the proceedings. Also withdrawal of excise duty exemption dampened the interest of the members to expand their business. Ho wever, restoration of excise exemption in the year 2004-2005 revived hope. Secre tary and Executive Secretary of Tirupur Exporters Association (TEA) were also in vited to share their experiences in promoting industrial estates and Apparel Park at Tirupur. . Due to such continuous efforts, 20 entrepreneurs again came forward to establish their manufacturing units in the proposed textile park. Meetings to form Special Purpose Vehicle (SPV) were held during 14,15 & 28 April 2004 with the State Gov ernment officials. Understanding could not be reached between the association an d officials of State Government, due to the differences in sharing of the initia l contribution required from them. Efforts are now being revived by the industry to establish the textile park under the new scheme announced by the Ministry of T extiles recently. 7.1.4 Outcome Facilities, which are required to manufacture quality garments, are now availabl e in the cluster. Textile and garment technologist employed by the institute and

testing center are providing guidance to the entrepreneurs for sourcing right f abrics and for solving problems related to manufacturing and processing. Facilit ies available in these institutions are now utilised to extend training to the e ntrepreneurs and employees in the cluster. The possibility of coming up with a T extile Park also exists. 7.1.5 Conclusion Willingness to setup in-house manufacturing facilities and to upgrade the techno logy level is more among the entrepreneurs. After the completion of the textiles park, the cluster will be able to meet the challenges before the industry and t o cater to the new market segment. This will create employment for those working in the industry throughout the year and will create more employment and investm ent opportunities in the cluster. It will also improve quality by imparting appr opriate checking measures. 7.2.Human Resource Development 7.2.1 Objective The objective of this initiative was to (a) upgrade the skills of the workers wh o were already employed in the industry to handle improved manufacturing, proces sing equipments and techniques, (b) to create sufficient work force to work in t he new production facilities and (c) to disseminate the critical technical infor mation that were required to be observed by owners and employees during producti on and processing. 7.2.2 Steps involved Weak areas in the entire supply chain were analysed. Entrepreneurs in the respe ctive areas of work were sensitized on the need for upgrading the skill and know ledge of their employees. They were also motivated to undergo training apart fro m sponsoring their employees. Women welfare organizations, NGOs were requested t o identify deserving candidates for fresh training and employment. Direct dialog ue with the employer and employees were initiated to bring change in their minds et, while introducing new equipments and techniques. Exposure visits to benchmar king production facilities in other clusters were also organised. Wherever requi red, link for getting financial support for organizing such training was also pr ovided. 7.2.3 Implementation Training was provided to all sections of the industry. Training included not onl y technical issues but also issues related to behavioral aspects. To start with the trainings were mostly on behavioral or vision related and were mostly organi sed by BGMA. With the passage of time and the formation of the BIFT, a number of technical training was also provided. BIFT was also linked to support schemes o f DST for part funding of the training programmes. Special agencies from within the cluster e.g. Textile Testing Centre as well as from outside the cluster, e.g . Textiles Committee and also specialized private firms were also linked to the cluster for providing specialized training too. Some of the trainings conducted during the Project period is given in the table below. Name of Training Programme Date of Training No. of participants Place One-week training in Pattern Making May 2004 (one week programme) 33 Maste rs, Tailors and Workers from 31 units Training for sewing operators 1. June-August-2004

2. May-July 2005 90 sewing operators BIFT BIFT Advanced training in pattern making 1. 7-21 June 2004 2. 8 June -10 July 2004 20 Pattern masters 16 units owners Skill development of sub-contractors 5-17 July 2004 16 operators of 4 subcon tracting units BIFT Training in quality up-gradation June-December 2004 91 workers of 7 sub-contracting units At the units Usage of appropriate chemicals 15 -16 December 2004 17 washing and dyeing un its Textile testing Centre Improvement in processing 27 29 October 2004 6 washing units At the u nits Basic issues in washing and dyeing 21-22 December 2004 15 washing and d yeing units At the units Training in value added processing 1. 23-24 December 2004 2. 10-13 March 2005 22 Improvement in quality and productivity 12 April 2005 17 subcontractors 7.2.4 Outcome

Awareness level to improve the efficiency, productivity and quality has improved . There is a change in the mindset of both employees and employers to adopt the latest technologies and to move up in the value chain. Facilities created in the cluster viz labour training institute and textile testing centre will be able t o cater to the needs of the cluster in future. 7.2.5 Conclusion Efforts taken so far were only the requirements that were immediately required f or the cluster to induce the transformation. Efforts to infuse professional mana gement at supervisory level and at the management level are required. Efforts to introduce new products and capture new product should be taken by providing fur ther support in the area of design inputs and pattern making. Processing is anot her important area that requires continuous attention. Intervention to minimise the waste and reduce the cost will be the next steps that are required to be tak en to make the cluster competitive enough to face the challenges from other clus ters and cheaper imports. 7.3 Improvement in productivity, quality and up gradation of technology

7.3.1 Objective Objective of this intervention was to demonstrate the improvement in productivit y and quality level, without increasing cost. This was aimed to do away with the fear among the entrepreneurs that improvement in quality would lead to increase in cost. It was also necessary to demonstrate effectiveness of the quality in i ncreasing the demand for the product and profitability. 7.3.2 Steps involved The steps involved included raising awareness among the entrepreneurs through wo rkshop, conducting group meeting of the employees, establishing linkages with te chnical institutions and BDS providers to avail necessary technical support, pro viding necessary training for workers and entrepreneurs and demonstrating effect iveness of such pilot initiatives. Besides reconciliatory meetings between the o wners and employees were also conducted to bring in necessary changes in their m ind set for resolving issues among them. 7.3.3 Implementation

Various interventions were carried out as demonstration projects. These included demonstration by BDS provider on (a) productivity and quality improvement, (b) hardness checking technique for washing units, (c) improved technology in ironin g of finished garments, etc. A BDS was hired to demonstrate the possibility of improving the productivity and quality without involving any additional investment and increase in cost of pro duction. 4 units participated. Workers and entrepreneurs were taught about align ment, symmetry and functionalities of the garments. Simple common referencing me thods were used in all machines for consistency. Machine lay out were changed to ensure smooth flow of work. Batch manufacturing system was introduced were the entire operation was possible under one roof. Group system was introduced where the workers were working on piece rate basis. Better material handling technique s were introduced and the minor problems in the machines were attended. Many washing and dyeing units did not know the importance of checking hardness o f the water to improve the quality. They were of the impression that costly chem icals will increase the cost. They were also not aware about value added process ing techniques. Therefore, efforts were taken to demonstrate the use of better q uality chemicals, by utilising the expertise from Bapuji Institute of Engineerin g and Technology and M/s CHT Chemicals India Ltd. 16 units participated in the d emonstration. Hardness of the water was tested before and after treatment in tho se units. In one of the units where the hardness level was more than 2600 ppm, t ime for processing came down by 45 minutes and feel of the garment was soft and bright. Consumption of chemicals also reduced by 15- 20 %. Efforts were made to improve the quality of finishing, which was identified as o ne of major causes for low unit value realization of the product. Four steam iro ning tables were installed in the training institute, as part of the strategy to provide training for the people who were working in the area of finishing. As t here was resistance from the washermen community to introduce new machines, lead ers of the community were contacted and were explained about the need for upgrad ing the present technology. They expressed their fear of loosing their job, in c ase the merchant manufacturers establish their own facility. They also expressed their financial limitation in installing such facility of their own. To sort out the difference between the two groups, meetings were organized betwe en the representatives of merchant manufacturers and finishers. They were asked to take positive decisions, considering the possibility of establishing the nece ssary facility by the entrepreneurs themselves with a commitment to employ only those persons who were working with them earlier. Finishers were suggested to re duce their piece rate from the existing rate to meet the cost of fuel and electr icity, which was agreed considering the efficiency in handling and potential for higher earning by the finishers. Thus the cost of manufacturing to the entrepre neurs and the earnings of the employees were kept unaffected. Utilising the serv ices of the machinery supplier, the employees of 3 firms were offered training a t the institute initially, which was followed by others in their own units. Rise of Hilton Garments M/s Hilton Garments is one of the medium sized merchant manufacturers, in the cl uster. Right from their establishment during the year 1992 M/s Hilton Garments was manufacturing all varieties of mens and boys bottom wears, for lower price seg ment of the market. They used to share the same problems which other merchant ma nufacturers used express in developing their business. Their turnover was Rs.8 m illion per annum, at the time when cluster development initiative was started in the cluster, during the year 2002.

In their earnestness to improve their business, they were participating in all t he programmes organized by BGMA. Based on the knowledge gathered and confidence created, they decided to concentrate only on mens bottom wear, especially in form al wear and to ensure quality of the garments. Due to non-availability of proper manufacturing facility locally, they used to outsource their production initial ly from outside the cluster, even though the cost of production was relatively h igher. Their major market was Kerala. Soon they introduced quality garments with a new label. Within a short period of time, few retailers, mostly owners of small outlets in the neighboring villages , noticed a preference of consumers for the new label of M/s Hiltons and offered to take dealership for their garment with exclusive marketing rights, in their area. Enthused by such responses M/s. Hilton Garments decided to work on the dea lership mode instead of booking orders from the retailers, although they still k eep supplying to some valuable retailers who had long associations with them. N ow, majority of the buyers of M/s. Hilton Garments are such dealers. This reduce d their marketing cost and increased their sales considerably. Quality of their garments even attracted the attention of few merchant exporters in Kerala, who placed orders for their supplies to Dubai, in large quantities. Now, M/s. Hilton Garments have no lean period in their business. Recently they l aunched another new premium brand of trousers. Their turnover has reached Rs.27. 5 million per annum during the year 2004-2005. Based on the experience, now they are confident of doubling their present turn over in two years time. M/s Hilton Garments are actively pursuing BGMA to take all necessary steps to establish te xtile park at Bellary. They are keen to set their own manufacturing units to mak e quality garments. 7.3.4 Outcome

At present 84-steam ironing tables have been installed in 27 firms. By changing the mindset of the people, a major problem, which was affecting the growth of th e cluster, was duly attended to. More firms in the cluster are now making effort s to improve the quality. They are convinced that improving the quality level wi ll increase their business and profitability. 7.3.5 Conclusion

Change in the outlook of the cluster stakeholders, due to the efforts taken so f ar in the cluster is required to be harnessed by extending continuous support an d by providing the infrastructure that are required to establish modern manufact uring facilities. They also require guidance to exploit new market segment and t o explore the new marketing channels. The cluster will be able to provide more e mployment opportunities and to increase the existing level of business, if suppo rt is extended for some more period. 7.4 Creation/Revival of networks

7.4.1 Objective Objective of this initiative was to add a dimension of development in the agenda of the industry associations and create even smaller networks for direct joint business initiatives. As the existing industry association were dormant, it was necessary to rejuvenate such industry associations and build their capacity to u ndertake developmental initiatives. 7.4.2 Steps involved Group of young entrepreneurs who were progressive in their attitude were motivat

ed to take lead role and to convince their peer groups to come forward to rejuve nate the association. Here exposure visits to other developed garment clusters w ere organised to sensitise them about the developments that were taking place in industry. Interactive meeting with leaders of reputed industry associations in such cluste rs were also organized to share their experiences in promoting their association , solving their problems through various initiatives and also developing their m embers business. They were also shown the various facilities and support institut ions established by the members of the association collectively. Once convinced, guidance was provided to the group of units in formulating byela ws and registration of associations. Thereafter the utility of coming together was demonstrated through various joint activities of their interest. Support for appointing suitable person as whole time executive to undertake the activities was also provided. 7.4.3 Implementation BDMA was non-functional. It was revived and got registered as Bellary Garment Ma nufacturers Association (BGMA) The programme worked with four associations in th is regard. These include the Bellary Garment Manufacturers Association (BGMA), t he Bellary Garment Processors Association (BGPA), Bellary District Mini India Ta ilor, Masters, Workers Union (BDMITMWU) and the Bellary District Cotton, Textile and Clothing Development Trust (BDCTCDT). BGMA was created during the Project. BGMA members were taken for exposure visit to Bangalore and Tirupur. Later they were also exposed to Ludhiana. Several knowledge generating activities like Impac t of WTO on the Garment Industry, Need for Testing and Quality Control were also co nducted. Interactive sessions with Tiruppur Exporters Association on sharing the ir experiences with members of BGMA in promoting industrial estates and apparel park also motivated them to go for conceptualizing an Apparel Park. The real mom entum got created during the formation of the BIFT. Linkage created with apex tr ade promotion bodies like Federation of Karnataka Chamber of Commerce and Indust ry (FKCCI) and Clothing Manufacturers Association of India (CMAI), which helped them to represent their problems and grievances to the appropriate decision maki ng authorities also rejuvenated the association. Bellary Jeans Washer Association (BJWA) was also nonfunctional. It was revived a nd got registered as Bellary Garment Processors Association (BGPA) was required to work on pollution issues. They were provided exposure to operation of effluen t treatment plant. Simultaneously they were provided exposure and training in qu ality up-gradation and cost cutting. They were given exposure on fuel-efficient boilers and processing machines. Members were also provided training for improvi ng processing techniques, testing of quality of chemicals, technical assistance for setting up of kitchen laboratories, etc. Consultants were hired to undertake a feasibility study for setting up effluent treatment for individual units by c ollecting representative samples from 6 washing units. Outcome of the study and cost of setting up the plant was discussed with the representatives of the washi ng industry. Different effluent treatment techniques like, micro filtration, ult ra filtration, nano filtration and reverse osmosis processes were explained to t he members by consultant in which 24 members participated. As a result 25 member s have come forward to establish a common effluent treatment plant in a centrali sed location Bellary District Cotton, Textile and Clothing Development Trust (BDCTCDT) was c reated for putting up a textile testing laboratory. Hence members of BDCICDT wer e taken for exposure visits to Bapuji Institute of Engineering Technology, Daven gere and Textile Testing and Development Centre established at Madurai under sim

ilar scheme by Madurai Spinners Association with the assistance from Textiles Co mmittee. Interactive meetings with office bearers of South India Hosiery Manufac turers Association (SIHMA) and Tirupur Exporters Association (TEA) were also org anised to build their capacity to under take such initiatives. They were also ta ken to various institutions established by such associations for the development of their business. Methodology of running such centre and efforts to be taken t o develop the centre were shared during the discussion with the office bearers o f Textile Testing and Development Centre. Similarly Bellary District Mini India Tailor, Masters, Workers Union (BDMITMWU) were provided various training programmes to benefit their members. 7.4.4 Outcome Industry associations for all the three important cluster actors in the cluster are working for the benefit of their members. They have got enough exposure and experience in handling the developmental initiatives. BGMA is strong in terms of its financial position and ability to under take bigger projects. BGMA also has got recently elected new office bearers after the completion of the term for fi rst office bearers. They are very much committed in continuing the development i nitiatives for their members. 7.4.5 Conclusion The initiatives were started with appropriate exposure, but those gathered momen tum on executing activities of interest to the members. Members in the cluster u nderstood the benefits of stronger networks (associations) not only to represent their cause but also to undertake necessary initiatives to address common busin ess issues. The need for revenue generation was also highlighted. Foundation for continuing the developmental initiatives has thus been laid in the cluster. 8. Results The results of the programme are summarized below. 8.1 Firm level impact indicators 1. Improvement in productivity level, which vary from 20 % to 50% depending up o n the machines installed and system already in operation. Improvement and consis tency in quality level was achieved in all the firms where the pilot programmes were implemented. 2. Training for 296 people in the area of pattern making, processing, testing of chemicals, in garment making was given to upgrade technology and human resource s skills through 12 different programmes. 3. Thirty firms have invested in acquiring modern garment making and finishing e quipments worth Rs. 4 million. A project worth Rs. 20 million, to establish mode rn manufacturing facility is under implementation. 4. Savings worth Rs.144,000 is estimated in four sub-contracting firms where the improvement in productivity was implemented. 5. Improvement in the turnover was estimated around Rs.25 million in 4 firms to whom assistance were extended. 8.2 Cluster level impact indicators 1.Two industrial associations and one apex body involving three industrial assoc iations were promoted to work for the development of all important cluster actor s in the cluster. One industrial association was strengthened.

2.Labour training institute and a textile-testing center were commissioned to pr ovide continuous technical support in the cluster. 3.Linkages with technical institutions, BDS and apex trade promotion bodies were established. 4. Land for setting up of Textiles Park has been identified. 25 processors and 20 merchant manufacturers have shown interest to set their units with modern techno logy, in the proposed textile park and deposited their earnest money with the asso ciation. Efforts to form special purpose vehicle is on progress. 5. One consortium among sub-contractors and one consortium among the merchant ma nufacturers level were created in the area of production. 6.New BDS providers introduced in the cluster were 11 in 9 different services. 9. Sustainability Table 1: Sustainability Index Name of the Organisation Weight Score (July 2002) Weighted Score (July 2002) Score (June 2005) Weighted Score (June 2005) 1.Firms & Associations Bellary Garment Manufacturers Association (BGMA) 40 6 14.40 Bellary Garment Processors Association 20 Bellary District Mini India, Tailors, Contractors Union 10 3 01.80 Bellary District Cotton, Textile and Clothing Development Trust 4 04.80 Production Consortium 10 6 03.60 Sub-Total 09.00 29.40 2.BDS Providers The Textiles Committee 15 7 03.15 NIFT-Bangalore 15 3 01.35 3 01.35 BIET 15 3 01.35 SIDBI 15 6 02.70 6 02.70 Private BDS 05 5 00.75 ATDC 15 3 01.50 CHT Chemicals Pvt.Ltd 10 5 01.50 Ramsons Garment Finishing Equipments Pvt. Ltd 10 01.50 Sub-Total 04.05 13.80 3.Brokering Institutions DIC 20 6 01.20 6 CEDOK 20 3 00.60 3 KSWDC 05 3 BIFT 15 3 Textiles Committee/ Testing Centre Sub-Total 01.80 Grand Total 14.85 02.20 00.60 00.15 00.45 40

3 4 3 20

O7.20 04.80 01.80 -

0 04.60 47.80

01.20

Bellary Garment Manufacturers Association, Bellary Garment Processors Associatio n and Bellary District Cotton, Textile and Clothing Trust are now undertaking de velopmental initiatives for their members. Labour Training Institute, Textile Te

sting Centre, machinery and chemical manufacturers like CHT Chemicals India Pvt Ltd., Ramsons Pvt. Ltd have become strong BDS providers. Both the labour trainin g institute and the textile-testing centre are self-sustainable in terms of its capacity to generates income to meets it expenditure. Awareness about the need f or upgrading the present level of activities in terms of technology, production and marketing has been created in the cluster. Many entrepreneurs now taking sel f-initiatives to form consortium on line with the suggestions made by model crea ted in the cluster. Consortiums are hiring the services of BDS directly for the technical inputs required for them. The spending patterns in the cluster are given below:

10. Future Directions The newly created industrial infrastructure will require support before becoming completely stabilized. Efforts for the Apparel Park should continue. Bellary al so has to prove its ability to manufacture good quality, high fashion garments. Sample survey conducted for the good manufactured in the cluster revealed the ex istence of good market potential in the mid value segment. Many regional brands and national brands are eyeing the same market segment. Efforts made in this dir ection by creation of consortiums of firms need to continue. Hence, the importan t challenges that Bellary has to tackle in the near future will be in the areas of: 1 Establishing facility to treat the effluent discharged from the washing and dyeing units 2 Reorienting the present training facilities to meet the human resource s kills in the supervisory level, apart from the present focus at shop floor level 3 Creating demand by improving the image for the product 4 Stabilising the infrastructure facilities created - BIFT has to introduc e new courses to improve the skills that are required for the industry, at diffe rent levels. It should also try to infuse relevant knowledge to the entrepreneur s that are required to manage the industry like financial, material and HR manag ements. 5 Establish the apparel park 6 Benefits of the consortium have to be widely disseminated based on the m odel created in the area of production among merchant manufacturers and sub-cont ractors. 7 Creation of marketing consortiums will be another important step that th e cluster should take to position its product at regional and national level and to explore new markets. Diversification of production and introduction of value added items are other areas that the cluster needs to work upon Implementation of the SBI UPTECH programme will enable the cluster to get the co ntinuous support and guidance for another period of three years, by then the clu ster would have matured enough to handle the situation independently. The cluster map after intervention and the list of activities conducted appear a s Annex 2 and 3 respectively. The diagnostic study conducted is separately avail able at www.smeclusters.org CLUSTER MAP PRIOR TO INTERVENTION Will be inserted Diagnostic Study PRESENT CLUSER MAP OF JEAN MANUFACTURING CLUSTER, BELLARY

Annex 2 LIST OF ACTIVITIES (2002-2005) S.NO Period Activity Nature of Activity Object Achieved 01 July 2002 Exposure visit to Bangalore & Tirupur for the members of BGMA Bench Marking Came forward to form an association 02 Sept. 2002 Awareness Programme on Impact of WTO to Garment Industry and need for Testing and Quality Control Capacity Building Challeng es before the industry and the efforts required to face them were sensitised 03 Oct. 2002 Registration of BGMA Capacity Building Initiate d efforts to start a training institute 04 Jan. 2003 Motivational Programme for expansion of business at Hosp et Vision Building Came forward to establish their own manufacturing units and identified suitable land for apparel park 05 Mar. 2003 Motivational Programme for the workers in the merchant m anufacturers garment making units Capacity Building Efforts to chang e in the mind set of workers to follow rules at work place were made 06 Mar. 2003 Meeting with Professor of BIET and Officials of Grasim I ndustries, exposure visit for the executive members of BGMA Net Working & Capacity Building MOU for extending technical support for the members of B GMA was signed 07 April 2003 Meeting with members of BDCA, BCCI, TC and BGMA Net Working Support for establishing Textile Testing Centre at Bellary 08 May 2003 Discussions with official of CEE,Ahmedabad Net Work ing Understanding to undertake rapid assessment study for treatment of efflu ent from the processing units and improving the processing techniques was reache d 09 May 2003 Discussions with Karnataka Cleaner Production Council

Net working Technical support for the treatment of effluent was explored 10 May 2003 Discussions with officials of Textiles Committee for sta rting of textiles testing centre at Bellary Net working Support for star ting of textile testing centre was mobilised 11 May 2003 Training Programme for pattern masters Capacity Buildin g Skill was upgraded to improve the quality of the garments 12 June 2003 Meeting with officials of CEDOK, SISI, NSIC - Hubli Net working Linkages for the support 13 June 2003 Exposure visit for Pattern Masters and Sub-Contractors t o Bangalore & Tirupur Capacity Building Understood the technology level and working procedures. Came forward to undergo further training to improve thei r skill 14 June 2003 Exposure visit for Government & Pollution Control offic ials Capacity Building Understood the benefits cluster development appr oach and the issues relating to treatment of effluents from the processing units at Triupur 15 June 2003 Sample survey of the market at Bangalore Capacity Building Views from the retailers who market the garment made from the cluster was gathered for taking necessary steps to improve them 16 July 2003 Meeting with officials of ATDC, Bangalore Net Work ing Technical support to run the training institute was explored 17 July 2003 Sample survey at Hyderabad & Cochin Capacity Buildin g Views of the customers who market the garments from Bellary were collect ed to take necessary action for improvement 18 July 2003 Meetings with officials of SIDBI, Department of Industri es & Commerce Capacity Building Financial support to BGMA to start the t raining institute was mobilised 19 Aug. 2003 Discussions with Marketing Consultant Capacity Buildin g To undertake dip-stick study to understand the market potential for the garment manufactured at the cluster 20 Sept 2003 Attending bench seminar on Bench Marking organised by UNCT AD & TC Capacity Building Understanding of the best manufacturing practice s 21 Nov. 2003 Meeting with officials of SIDBI Capacity Buildin g Financial support for starting of production and marketing consortium 22 Dec 2003 Participation in meeting with trade delegation from Sing apore Capacity Building Expectations from the buyers were exposed to bui ld their capacity to export 23 Dec. 2003 Training of trainers for the Institute Capacity Building Enhancem ent of knowledge to impart training 24 Jan. 2004 Participation in the exhibition organized by AWAKE Capacity Building Women entrepreneurs in the cluster were sensitized about the potential for marketing their product 25 Jan.2004 Inauguration of the Training Institute Infrastructure D evelopment Facility to provide technical support and upgrade human resource skill in the cluster was established 26 Feb. 2004 Meeting with officials BASF Ltd, Secretary, DIC, ATDC, TC Net Working Support to address the issues relating production, proce ssing and infrastructure was mobilised 27 Mar.2004 Meeting with officials of TC Net working Follow u p for establishing textile testing centre 28 Mar. 2004 Meeting with officials of ATDC Net working Drafting of syllabus for sewing operator course in the cluster 29 May 2004 Exposure visit for the Washers & Dyers processing units at Bangalore Capacity Building Visited the benchmarking processing faci lities 30 May 2004 Visit of energy audit expert to washing and dyeing unit

s Capacity Building Scope for conserving energy and resources were s ensistised 31 June 2004 Meeting with officials of BASF Ltd. Net working Support for improving the processing techniques 32 June 2004 Study for possible product diversification by the sub-co ntractors Capacity Building Opportunity to manufacture home furnishi ng by using the machinery available with them was identified 33 June 2004 Registration of BDCTCIDT Capacity Building Organization to over see the functioning of the testing centre and to under take the development initiatives formed 34 June 2004 Training for Pattern MastersFirst batch Capacity Building Up gradation of skill to improve the qua lity and to make children &ladies garments 35 June 2004 Preliminary Study of BDS on improvement productivity and quality in sub-contracting units Capacity Building Scope for the in terventions and co-operation from the sub-contracting units was explored 36 July 2004 Exposure visit to New Delhi and Ludhiana for the Executi ve Members of BGMA Capacity Building Initiatives taken by other indus trial associations and supports available from national level trade promotion bo dies were sensitised 37 July 2004 Training for Pattern MastersSecond Batch Capacity Building Skill of the pattern masters upgraded to make children and ladies garments 38 July 2004 Visit of officials form TC and BIET Strategic Possible interventions at the firm level benefits were explored 39 July 2004 Meeting with Designer at Hyderabad Capacity Buildin g Action plan to build the capacity of sub-contractors to manufacture home furnishings was drawn 40 July 2004 Training for Sewing operators who were working with the Sub-Contractors Capacity Building Training to improve quality and producti vity was provided 41 Sept. 2004 Sewing Operator Course Training (for fresher) Capacity Building Training to work with high speed machines at garment industry wa s provided 42 Aug.2004 Second visit of BDS to study the units at Bellary Capacity Building Activities to be undertaken in the sub-contracting units were finalised 43 Aug.2004 Starting of information centre at BGMA Capacity Buildin g Members took interest to know the developments relating to the industry 44 Aug. 2004 Exposure visit for the Sub-Contractors to Karur, Bangalo re & Tirupur Capacity Building Market potential for home furnishing a nd the facilities required to manufacture were sensitized 45 Aug. 2004 In house training for the workers in the Sub-Contracting units Capacity Building Skills of the workers were upgraded to improve q uality 46 Sep. 2004 Exposure visit for the members of BDCTCDT to Madurai, Ba ngalore & Tirupur Capacity Building Procedure for administering the testing center promoted by MSA and benefits cluster development initiatives were sensitised 47 Sept.2004 Commencement of Post Graduate Diploma in Fashion Designi ng Capacity Building Availability of human resource skills required f or the industry was facilitated 48 Aug.Oct. 2004 In house training for the workers in the Sub-Contracting units Capacity Building Quality of the product and efficiency level of t he workers improved 49 Oct. 2004 Implementation of productivity improvement programme by BDS Capacity Building Demonstrated the possibility of improving the pr oductivity and quality with the existing facilties 50 Oct. 2004 Training for Steam Ironing for the finishers Capacity Building Demonstrated the quality of finishing and increase in efficiency

51 Nov.2004 Demonstration of the effects of water softening plant in processing units Capacity Building Improvement in quality and savin g in time and chemicals inputs were achieved 52 Nov.2004 Commissioning of Textile Testing Centre Infrastructure D evelopment Facility to test the quality and to provide technical support i n the cluster established 53 Nov.2004 Seminar on The Arts & Science of Exports Capacity Buildin g One export marketing consortium was formed 54 Dec.2004 Training for Testing of Chemicals & Auxiliaries Capacity Building Importance and benefits of testing were demonstrated. Th ree units established in-house testing facility 55 Dec.2004 Workshop on process improvement and treatment of effluen ts from the dyeing units Capacity Building Basics of processing tec hniques and outcome of the study on setting up effluent treatment plants were se nsitised 56 Dec.2004 Meeting with officials of State Pollution Control Board, BDS, members of BGPA Strategic Approval for adoption of the treatment t echnique identified by the association was discussed 57 Dec. 2004 Demonstration of value added processing techniques Capacity Building Possibility of improving the unit value realization & ma rket was sensitised 58 Dec 2004 In house training for the workers in the Sub-Contracting units Capacity Building Quality of garments and efficiency level of the workers improved 59 Mar.2005 Training for value addition in processing Capacity Building Techniques to make value addition in processing was demonstrated 60 Apr. 2005 Training programme for Improvement in Quality and Produc tivity in Sub-Contracting units Capacity Building Methods and procedures t o adopted to improve the quality and productivity were disseminated 61 Apr. 2005 Sensitization Programme on treatment of effluents Capacity Building Various methods effluent treatment and its suitability w ere sensitised 62 May 2005 Sewing Operator Course Training (fresher) -Second Batch Capacity Building Training to handle the high speed machines in the garmen t units were imparted to meet the demand from the industry 63 May 2005 Training for the Principal of BIFT Upgraded the knowledge to impart training 64 May 2005 Exposure visit for the members of production consortium Capacity Building Visited the bench marking production facility. Preferred to set up modern manufacturing facility 65 June 2005 Awareness programme on Exporting Opportunities to EU Capacity Building Avenues for export to Europe and the requirements to be complied were sensitised 66 June 2005 Exposure visit to M/s Arvind Brands Ltd and GarTech fair Capacity Building Latest production equipments and the facilities were exp osed 67 June 2005 Programme for improved Processing and Finishing Techniqu es & Energy Conservation Capacity Building Means to improve the pre sent prcessing quality and possibilities to conserve energy in the processing un its were informed