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Apex handloom co-operatives of Kerala: How far and how behind?-III

Dr P Nayak and S Krishna Kumar

We conducted a study on the consumer preference of Hantex/Hanveev showrooms from a panel of households during 2003 as an addendum to the Textiles Committee study on handlooms and powerlooms of Kerala. These households are the panel members of the regular survey of the Textiles Committee. The respondents who are aware about the Hantex/Hanveev and its showrooms are 88% in the urban areas and 87% in the rural areas. The remaining 12% in the urban areas and 13% in the rural areas are not heard about these apex bodies and its show rooms. These respondents are either making the textile purchases for their family or are aware of the details of the textile purchases made in the family. Among those who are aware about Hantex and Hanveev and its showrooms, only 67% of the households in the urban areas and 48% of the households in the rural areas have made some purchases in the recent past from the outlets of these apex bodies. About 5% respondents in the urban and 25% in the rural areas indicated that the lack of showrooms in the nearby place is the main reason for not purchasing from Hantex/Hanveev. So, Hantex even after having 29% of its outlets and Hanveev with 10% of its outlets in the rural areas are not able to penetrate to even half of the consumers in the rural segment of the state. The consumers who have purchased from the Hantex/Hanveev outlets were asked to spell a single opinion of the products, the most relevant in their view.

Even though most of the consumers of the products of Hantex/Hanveev are tagging the products with “Good Quality” label, these bodies are not been able to reap this advantage properly. Durability as well as the fineness of the cloth are said to be the major factors contributing the good quality stature. The eco friendliness (by the use of azo free dyes) of the products are preferred by a segment of consumers, no serious efforts are made by these organisation to showcase the products in that direction. The presumption that the lack of cost competitiveness of handloom products is the main reason against its market penetration is also proved incorrect, as the consumers do not see it as a main reason for it.

Hantex/Hanveev should seriously consider the market demand and changing life styles, which today prefers to buy products at one stop, which the Hantex can think and implement. Stocking different varieties and market-oriented products could lure this section of the people lured towards Hantex/Hanveev showrooms.

Policy proposal

The co-operative enterprises in the state do not have the requisite capacity to address the issues that affect its sustainability due to reduced size and relative isolation. Therefore, to promote the co-operative enterprises into a viable proposition and also for the development of the handloom industry in general, Hantex should reorient its activities from a marketing agency to a facilitator. As Hantex and Hanveev have necessary wherewithal to implement various co-ordinated programmes in view of their presence in the nook and corner of the state, resources and the expertise, these organisations should act as the hub of all the developmental activities. Some of the critical needs of the handloom sector, which are to be fostered to ensure sustainability of the industry in the state has to be initiated by the apex bodies, Hantex and Hanveev, are discussed below:

h National Bank for Agriculture and Rural Development (NABARD) provides refinance facilities to the state co-operative banks and regional rural banks (RRB) for financing the production/procurement/marketing requirements of primary weavers’ cooperative societies and apex weavers’ societies. The eligible institutions for NABARD credit are the state co-operative banks and the credit reaches the cooperative societies through district co-operative banks (DCBs) and branches of RRBs. The state co-operative banks and the RRBs normally levy service charges on and above the NABARD rates of interest. The interest rates are doubled by the time it is disbursed to the society or individual artisan levels. The cash credits advanced through this system are the main working capital for the co-operative societies. The products are supplied to Hantex for marketing while the payments for the supply is made once or twice in a year. As a result, the working capital of the society gets blocked and at the same time, the payments received from Hantex are eaten away by the interest component of the loan. Some societies are therefore not able to repay the loans on time. A smooth repayment system for the products procured by the Hantex in smaller periods rather than six months or above will help the society for timely repayment of loan. The nonpayment of loans has made DCBs and the RRBs reluctant to advance further credit to the primary societies in view of poor recovery of loans. In view of the stalemate, the Hantex can play a better role for supply of credit to the primary societies by availing refinance from NABARD particularly for handloom sector. Hantex can easily take up the responsibility as they have adequate infrastructure already built-in across the state. This will also enable NABARD to have effective monitoring and assessment of the credit needs of this sector at the ground level.

h The network of the co-operative enterprises in the form of a consortium has been recognised as a very useful tool in addressing the joint business operations ranging from sourcing of raw material to marketing8. Institutional interventions are required on all segments along the supply chain to promote efficient linkages. Lack of getting yarn of the required count and quality at the right time and at the most competitive price is the foremost problem in the raw material procurement of the co-operative enterprises. As collective initiatives help in better access to input and the reduction in costs, Hantex should sensitise the societies the importance and utility of consortium approach. Operational as well as technical guidance should be imparted to the consortia of handloom societies for managing yarn banks, thereby reducing the haphazard of sourcing raw material on piece meal basis. This has been successfully carried out in other states. For example, the consortium of 20 co-operative societies, “Texmaas Innovative Consortium (TICK)” of Karur (Tamilnadu) producing home furnishings, started functioning at the initiative of Textiles Committee, now sourcing yarn commonly with 2% discount. Similarly, “Yemul Industries”, a small terry towel weaving unit in Solapur (Maharashtra), used to buy yarn in small quantities from local traders, the problems arising out of such transactions were higher cost and lack of uniform quality. The consortium, Euro Terry Towels Consortium Pvt. Ltd. (EURO) of which Yemul industries is a member of, alongwith 17 similar powerloom enterprises, have come handy in procuring bulk quantity of yarn from spinning mills directly, which, apart from ensuring uniform quality, resulted in savings of about 3%.

j Handlooms are not amenable to any substantial technology upgradation and hence high productivity cannot be a feasible objective. Therefore, the emphasis has to be improved, innovative and unique design inputs and value addition through high quality processing and finishing.

The focus, therefore, should be to modify and upgrade the machines and processes in handlooms for lessening the strain on operations, improve quality, increase productivity to the maximum level. For this purpose, the weavers’ natural and instinctive reluctance to adopt changes is to be overcome. Firm level intervention in the form of live demonstrations and workshops for introducing attachments like dobby, jacquard, five-wheel take-up motions etc. could b taken up by Hantex and Hanveev. Another critical need of the industry is the technical input requirement for product diversification in the unit level. As both these organisations have a pool of trained technical experts in its ambit, the services of them could be utilised for this purpose. Besides, there are independent and non-profit oriented organisations, which offer technical assistance, free of cost, to the SMEs and their associations in the developing countries to improve their competitiveness. The Netherlands Management Cooperation Programme (NMCP), located in Hague, is such an organisation and international inputs would be of immense use in understanding the requirements of the developed countries and to augment capability to meet that requirements9. Hantex should encourage the export oriented handloom societies in the north Kerala to avail the services of such organisations.

* Product diversification has been the most neglected area of development in the handloom industry. As the product diversification process should be precedent by information on market demand, technical upgradation, skill development of the craftsmen etc, a concerted effort shall be taken up for this purpose. In addition, exposure visits have been found extremely helpful in galvanising and motivating the societies in embarking upon the process of diversification. This will also trigger the technology transfer between the clusters/areas. Besides, Hantex and Hanveev should also take up the institutional involvement required for technical input for the ongoing Deen Dayal Hathkhargha Protsahan Yojana (DDHPY), which is also aimed at product diversification. These organisations should be the nodal agency for firm level implementation of the product diversification programme by roping in the services of National Institute of Fashion Technology (NIFT), Weaver’s Service Centre (WSC), Institute of Handloom and Textile Technology (IHTT), Kannur, etc.

* The procurement of the products and its marketing should be taken up by the consortia of co-operative societies instead of Hantex. Here, each consortium will act as the procurement agency of the products from among the member societies. This system is more transparent and leads to the procurement of good quality marketable products. By this system the societies, who are members of the consortium will be forced to produce demand-oriented products of good quality. For marketing the products procured by the consortia, the showrooms of Hantex may be provided to these consortiums on lease. There are several co-operative handloom societies in the northern Kerala, which have the potential and willingness to enter into the export market, but their knowledge and understanding of the nuances of export marketing and management is limited. So, with the objective of exposing them to the art and science of export marketing and management, Hantex should act as a facilitator. As part of this, Hantex should take up activities like organising workshops-cum-counseling sessions, arranging trade delegation visits, assisting the enterprises for common brand development etc. Self-Help Groups (SHGs) in Kerala have made significant strides in poverty eradication and women empowerment programmes. The number of SHGs increased from 352 in 1994-95 to 2434 in 1999-00, recording a growth of about seven times, over a period of five years. One of the objectives of SHGs is to build self-help capabilities of the rural poor. Income generating activities are promoted either as a group or as individuals by providing micro credit and also technical guidance thereby bringing the poor families above the poverty line. Many of the SHGs are promoting direct marketing of goods as part of its income generating activity10. Marketing of handloom products is one of the areas where the SHGs could be entrusted. Hantex and Hanveev can take up this scheme with the successful SHGs in the state.

* Hantex has been organising exhibitions in the state during festive seasons. In 2001-02, it has conducted 41 exhibitions, which has come down to 2 in 2002-03 (Economic Review, 2003). As these exhibitions are organised within the state, showcasing the Kerala handloom products to a wide spectrum of the consumers of the country is missing. The role of the Hantex here is to organise exhibitions and fairs in the major cities in India and also some selected cities of different countries. The consortia of co-operative societies should be sensitised for participating in these exhibitions/fairs. Besides, Hantex should provide necessary guidance and support to these consortia to participate in the fairs conducted by other organisations in the country such as “Tex Styles India”, which is conducted every year by India Trade Promotion Organisation (ITPO), New Delhi.

* In the recent years, Kerala is focussing more on the development of the tourism industry in the state. As per the statistics available in 2002, there was an increase of 11.37% of foreign tourists in Kerala as compared to a decrease of 6.92% at the national level (Economic Review, 2003). The heritage and the importance/social cause of the small-scale handloom industry are not depicted properly in the tourist destinations and many of the destinations lack showrooms. Besides, the three international airports have inadequate exhibits/ showrooms of exclusive handloom products of Kerala, thus restricting the market to the boundaries of this small state. The Hantex should take up a systematic publicity of the handloom products in the places of state, national and international importance.

* Barring a few co-operative societies and some private entrepreneurs, no websites are available for publicising the Kerala handlooms. The Hantex, which caters to the needs of more than 435 co-operative weaver societies, has not launched a website of its won till now. On the contrary, apex societies such as Co-optex of Tamil Nadu are provided with user-friendly websites. In the era of IT based e-marketing, a website providing information is of immense help to the organisation not only for marketing purpose but also for the development of the entire industry. The website of Hantex should have links to websites of the weaver co-operative societies, which will add value to its functioning.

* At the initiative and support of Government of Kerala, Hantex and Hanveev have developed many infrastructure facilities such as processing houses, readymade garment factories, etc. for the development of the handloom industry in the state. Many of these infrastructure facilities are under utilised or not available for the industry in general. The information received during the field survey brings out non-availability of trained tailors and processors for producing export oriented handlooms products in the state and particularly in Kannur, the northern region of the state. The facilities available if productively used to demonstrate and train the artisans, it could benefit the larger interest of the industry. Given a time of great transition of a unified market economy, the human resources development holds the key to success. In view of the above, the facilities already available should be converted into training-cum-demonstration centres for the societies and other stakeholders, which could otherwise derive benefit to the industry in the long run. The necessity of additional infrastructure requirement for the industry needs to be assessed by Hantex and proposals should be mooted to develop such infrastructure through the government or private participations. The Abid Hussain Committee (1997) has also made a similar recommendation for infrastructure development of small-scale industry clusters through government and private participation.

With the integration of global textile trade in 2005, the distinction between the domestic and export markets is no longer valid. Therefore, establishing access and presence in the export market is key for survival and growth of the handloom industry, in general and Kerela state in particular.

(To be continued)
(The authors are with Textiles Committee)