Innovation is the name of the game these days in the textile industry. The stories of companies that have dared to be different and not tread the beaten path make for interesting reading. One such success story is that of AGC (A. Ganapathi Chettiar) from Tiruppur. What basically started off as a cotton trading firm way back in 1948 has today blossomed into a group which has been able to silently and steadily carve a niche for itself in a highly competitive business environment. Mr. T.A.S. Dhanddabani who entered the business in 1975 has been instrumental in the growth of the company through consistent innovation.
In a detailed interview with The Textile Magazine, Mr. S. Vidhyaa Shankar, Executive Director of the company, gave insights into varied aspects such as the history of the company, the focus areas of the different companies in the group, the thrust on innovation, niche products and future plans.
The edited excerpts of the tete-a-tete.
The company, as mentioned earlier, has a history dating back to 1948. “We started off as a cotton trading company. We moved into the yarn business about 30 years back,” said Mr. Vidhyaa Shankar: “Right from day one we have been only into specialized products. No run of the mill products for us.”
The company which began its yarn trading journey with two primary products – colour mélange and fancy yarn, a range which grew manifold over the years – continues to provide advanced knit products to its customers.
A fourth generation entrepreneur Mr. Vidhyaa Shankar stated that constant innovation and the ability to bring new products into the market at regular intervals of time, based on the needs of the customers, has been the key reason for the company’s growth story over such a long period of time.
Innovative business model
Explaining the business model for the success of the group companies, Mr. Vidhyaa Shankar said: “We work on a 360 degree model. We have people who want to sell their products who come to us. We have people who want to develop their products, in collaboration with us, who come to us. The consumers of those new products, such as the garmenters or the buyers from various brands, both domestic and international, come to us. Similarly, we have a lot of designers and students coming and working with us.”
Elaborating on how this 360 degree approach has helped the company consolidate its presence, Mr. Vidhyaa Shankar observed: “Over a period of time we have developed wide-ranging contacts, right from spinning mills to buying agencies to buyers, etc. This way we know what the needs of the end-customer are. Based on the needs, we have the capability to customize the product, right from the fiber stage. We have had instances of having worked with fiber manufacturers, supplied the fibers to the mills and got it spun as per the requirement of the end-customer.”
Replying to a question on the reason behind such an approach, he explained: “As mentioned earlier, we are not interested into getting into an existing market. We are more interested in creating a new market.”
Going into details of the core focus areas of the different companies in the group, Mr. Vidhyaa Shankar said: “AGC is an agent for reputed mills such as RSWM and Ramco Group. These mills, along with Malwa Cotton, have been immensely helpful in our growth story. We put our customers directly in touch with the mills. Based on their needs the products are then directly supplied to them. It is an agency-based business. At Shri Arunachaleshwarar Tex, we do trading of all types of specialized yarns, as per customer requirements. Hallmark Knit Fabrics is our fabric manufacturing company, where we source the yarns, manufacture as per customer specifications, with respect to designs, blends, quantity, etc.”
Bullish on knitted shirts
Commenting on the company’s focus on specialized yarns and fabrics, he highlighted three key products which have been able to carve a niche for themselves in the market in recent times – Sofino, Knit Denim and a third yet to be named brand specializing in knitted shirts.
Throwing light on these key products, Mr. Vidhya Shankar said: “Sofino is actually a very fine knitted fabric in different blends ideally suited for infants’ right from age zero to the time they are 2-3 years old. The Sofino brand has been creating ripples in the infant wear market and continues to clock a healthy growth rate. Similarly, with the Knit Denim brand, which is basically knitted indigo denims of premium quality made out of imported yarns, we are supplying to all top brands in India as well as internationally. We even supply to exporters who in turn supply it to the international brands.”
The third specialized product from the company which Mr. Vidhyaa Shankar feels has tremendous growth opportunities is knitted shirts. “There are already knitted shirts doing the rounds in the market. However, they still continue to ‘look’ like conventional T-shirts. This is where our product is different. They ‘look’ woven, while offering the ‘feel’ of a knitted garment. What is more the fabric is also suitable to cater to any segment, whether it is casual, semi-formal, formal or party wear. We firmly believe that this particular product has huge market potential,” he stated.
Hallmark Knit Fabrics has a production capacity of 125 tons per month, with around 60-70 per cent of its production going into in-house consumption. The company also boasts of all latest German and Japanese make machinery.
When it comes to R&D, the group’s penchant for out-of-the-box thinking is once again evident. At AGC and the other group companies there is no exclusive R&D set-up. “R&D is imbibed in each one of our 80 odd team members. Every one of us working here is looking to develop something new in his or her area, whether it is knitwear, yarns, or fabrics,” is how Mr. Vidhyaa Shankar explained the approach.
On the company’s views with respect to exports, he said: “We are not much into exports because our production capacity is sufficient only to cater to the domestic demand. Maybe, down the line we will look at exploring more export markets. Having said that we must also state here that we have extensive contacts with overseas players. Lenzing is a good example. We are already doing exports on a very small scale. We have the capability to scale up operations as and when we reach a certain production capacity.”
Comprehensive QA process
A thorough quality assurance process has also been a key reason behind AGC’s consistent growth story. “Since we deal with specialized products, what we do is to ensure that the best of quality in a given blend is maintained. We have a dedicated QA team that makes sure that all our products are validated and tested. The products are also sent along with the test reports.”
Continuing further on the subject, Mr. Vidhyaa Shankar remarked: “We also do a lot of customer education with respect to our quality assurance process. We educate them as to what they can expect from each one of our products. We explain to the customer what the call-outs for each type of fabric are, what they can expect and what they should not expect. The quality assurance is then done based on mutually agreed terms and conditions.”
The Executive Director reckons that the company’s efforts in terms of innovations are paying it rich dividends. He said: “We don’t see ourselves as just a ‘seller’, in the sense that when a customer asks for a modal fabric, we don’t just go ahead and sell him one. What we do is to understand what is the end-product, why are you going in for the product and who are the clientele to whom you are going to market your end-product? We get all such details and then suggest a cost-effective, sustainable and appropriate solution. Thus, we are more of a comprehensive solution provider.”
He added: “We are not just behind volumes. For us establishing long-term business relationships are more important. For example, we have a long-standing relationship with Amsler. We were the first to introduce Amsler slubs in the Tiruppur market. Similarly, we have a long-standing relationship with Lenzing, the world renowned fabric manufacturer, and introduced their products first time in Tiruppur market.”
Positive sentiments
Commenting on the market conditions he said: “With respect to the apparel sector, there are two types of clients – some who want something very premium and the others who want run-of-the-mill stuff. This is a challenging industry. However, the challenges also offer us opportunities. To give an example, at a time when the dyeing unit’s pollution issue was affecting the industry in Tiruppur, we had developed products which did not require any fabric dyeing. This is a good example of how you can turn adversity into an opportunity.”
According to him, there are very good prospects for the further growth of the industry. “Our outlook is positive. There are only two ways to survive in the industry. The first one is to bow down to the demands of the market and compromise with aspects such as quality and values. The other one is to swim against the tide and create your own market. We belong to the second category. We are confident of our continued growth,” he said.
Finally rounding off the interaction, Mr. Vidhyaa Shankar stated that if any of the readers were looking for something new, then AGC and its group companies are all ready for accepting such challenges. “I request the readers that if they are looking for some new products, then they can approach us. We will take up the challenge and service you to the best of our abilities,” he added.
By M.K. Prabhakar & Mohan Raj