This is not the story of yet another cotton mill. This is about a tradition which has grown over the years, accumulating accolades and appreciation for its quality consciousness and dedication in producing the finest material for the finest fabrics. It is a Success Story spun around Tradition.
Thiagarajar Mills (P) Ltd. of Madurai has carved a niche in the textile industry with their finest quality products. Hari Thiagrarajan, Executive Director, Thiagarajar Mill, the next generation scion, who has spearheaded the modernization activity at the group, provides detailed insights about the business strategy of the group, operational initiatives, future plans and his new responsibility with the Confederation of Indian Industry (CII).
Thiagarajar Mills was established in 1956 by Karumuttu Thiagaraja Chettiar. While the corporate office and one unit are located in Madurai, the other two units, set up in 1992 and 2007, are located at Nilakottai. The company offers a variety of products including 100% compact, 100% combed, 100% cotton, single yarn, double yarn, and double mercerized. With a combined spindleage of about 1 lakh spindles, it achieves a total production of approximately 26 tons per day. While 70% of its production is exported, 30% is sold in the domestic market. The company caters mainly to the premium quality shirting fabrics’ segment and its major export markets include Germany, Spain, Italy and Japan.
A wide range of textile machinery from some of the top brands including Truetzschler, LMW, Rieter, Marzoli, KTTM Toyota, Savio, Murata, Schlafhorst and Sieger have been installed in all the three units of Thiagarajar Mills. Much of this modernisation has been initiated by Hari Thiagarajan who joined the family business about a decade ago. “After my schooling in Madurai, I went to the UK to study at the Warwick University where I completed a three-year program in engineering and business management. My choice was based on the fact that the university had a tie-up with companies like Tata Motors, TVS Motor, Mahindra and Mahindra, etc., through its Warwick Manufacturing Group. I then did a short internship in finance in Singapore,” he informs.
Quality first
At the Thiagarajar Group it has always been quality over quantity since inception. “We have been a very conservative group and I think that is also one of the reasons behind our success. We cater to a niche segment and have never been in the volume game. We zeroed in on the fact that in the yarn-dyed shirting market there were not too many manufacturers. We capitalized on this opportunity and though there have been several challenges, our quality is what has helped grow our exports. With 70% of the products sold overseas, we cater to quality-conscious clients. In fact, we have regularly received the TEXPROCIL awards for best performance in exports,” Thiagarajan states. In 2018-19, the company received an award for export turnover in the range of Rs. 75-250 crores for yarn count of 51 and above.
Management initiatives
One of the key initiatives that Thiagarajan brought in after he took over was the 5 S Program. This system consists of five pillars – sort, set in order, shine, standardize and sustain. He felt that it has had a positive impact on the group’s overall functioning. “A lot of people think that the 5 S Program is for other industries or sectors such as automobiles. However, there are several advantages it offers to the textile industry too. Most importantly, it definitely changes your mindset. It also saves a lot of time and energy. And it does create an organised workplace. I will give you one example: earlier whenever an operator had to search for a particular spare part, chances were that he would waste a lot of time trying to find it. The part would definitely be there but he wouldn’t know where exactly to look for it. Today, with 5 S everything is neatly tagged. He just needs to go to the store and find it in a matter of a few seconds,” Thiagarajan elaborates.
“5s improved the work culture and brought about a positive change in the personal lives of employees, it lead to an organised work place and also impacted the behaviour of employees and staff towards building a systematic work place,” he adds.
“Moreover, everything is recorded. Whenever a new recruit comes in, he or she doesn’t need much time to get trained in the concept. It has led to other initiatives in the group. We are already implementing Kaizen. Similarly we are working on TQM. We also have hired a consultant for implementing lean management. I think every organisation should invest in such initiatives. It definitely pays back in the long run,” Thiagarajan states, who is also quite keen about automation but has a different perspective about it. “Today, a lot of automation is happening in the textile industry. Machinery makers, for example, are using robotics,” he says.
“But we need to remember that the textile industry employs a lot of people. It is for this simple reason that we deal with cotton, which needs more manpower than dealing with MMF. When you are focusing so much on quality, raw material, machinery, product, etc., what stops you from focusing about the quality of human resources, perhaps the most important resource, for an organisation? After all any organisation would be spending about 15-20% of their investment on human resources. So, we need to manage them better. If everybody in an organisation has to read from the same page, then you need things like 5S, TQM, lean management, etc.,” he adds.
VTM Ltd.
VTM Ltd., the other group company, was acquired by Hari Thiagarajan’s grandfather in the 1950s. It is a grey fabric manufacturing unit with modern looms and is 5 S-certified. Its customers are mostly B2B and most of the products are in the home textile segment, including sheeting for the US market. It also makes a lot of fabric used for men’s shirting, bottom wear, suits, etc. A new product called ‘Damask’ has recently been developed for the African market. This is for the long robe popular among African and Arabian men and women, and is made out of high twist yarn.
The unit features looms of both wide and small widths from top brands such as Toyota, ITEMA and Sulzer. There are also jacquard looms for home textiles. “We have the latest sizing and warping machines from Karl Mayer at the unit. The production capacity is 70,000 metres per day. VTM is a very small portion of our business. Today, the home textiles field has become very competitive but we have carved a niche for our brand. Our grey fabrics are doing well both domestically and internationally. A lot of this product sold across Gujarat to leading companies like Raymond. We export to Japan, Italy and other European countries,” Thiagarajan informs.
Educational institutions
The group has also got a strong presence in the field of education with its colleges for engineering, arts and science as well as two schools. Throwing light on this foray, Thiagarajan says: “Our educational institutes are run on a no-profit basis. We charge a nominal fee but offer top-notch education inputs. We also focus on getting the best placements for our graduates even though the economic downturn of the past two years has made it slightly difficult.”
Roadmap ahead
Speaking about the next phase of growth, Thiagarajan states: “We are looking at opportunities in the technical textile segment. But we are also studying the challenges since we don’t want to take a wrong decision. Meanwhile, our process of modernising our existing plants continues on a regular basis. Renewable energy is another thing that we have invested in. We have a 3 MW rooftop solar plant in our Nilakottai unit. We are in the process of installing one in our Madurai unit too.” Online retailing is another area that the group is interested in as part of its future expansion plans.
Elaborating, Thiagarajan says: “Along with my sister, who is based in the US, we are working on establishing an online retail presence. This is because the brick-and-mortar store concept is gradually being phased out. We want to sell Indian manufactured home textiles in the US’ market through a digital platform. We have already started work on the project and in fact, it is one of the reasons why we are putting up a stitching facility in place at the VTM factory premises. Also, given the fact that sleep is an experiential thing, we want to present an entire sleep kit online, highlighting the fact that the product is organic, sustainable and traceable.”
Leadership role
In a further development, Hari Thiagarajan has recently taken over as Chairman of the Confederation of Indian Industry’s Tamil Nadu State Council. Throwing light on his new role and responsibilities, he says: “In this one-year tenure, my focus will be on continuing with the good work that CII has been doing for so many years. We work for the entire gamut of Indian industry with a theme selected for each year. This year it is about building competitiveness in the Tamil Nadu industry. Incidentally, this is also the 125th year of the CII.”
“Our primary focus this year is to engage with the government to improve the ease of doing business. This has been something that the CII has been working on very closely with the Tamil Nadu Government in terms of policy advocacy and also to reduce bureaucracy. We have about 1,400 members in Tamil Nadu, the highest among other States. A good number of our members are from the MSME sector. This has broken the myth that CII only caters to the large-scale industries or the big players,” he adds.
According to Thiagarajan, the CII’s Tamil Nadu State Council not only interacts with the State Government but also with the Central Government for representations such as refund of GST, clearance for airport expansion projects of Madurai, Coimbatore, Chennai, etc.
Tamil Nadu is one of the States that have steadily attracted investments on a large scale. Elaborates Thiagarajan: “The State’s GDP growth rate last year was 8.3%, the second-highest in the country after Maharashtra. If you consider the fact that there was an economic slowdown last year along with international uncertainties due to factors like the US-China trade war, 8.3% is a phenomenal growth rate. As regards investments, there were two global investors’ meets that were held in 2015 and 2018 where the State was able to showcase its abilities, especially the availability of skilled manpower.”
The virus impact
Along with a sequence of events such as the US-China trade war and the global economic slowdown, the pandemic caused by corona virus has further shaken the foundations of the Indian industry. Asked about his view of the scenario, Thiagarajan says: “So far as the corona virus outbreak is concerned, it is something unfortunate, unexpected and unprecedented. But we have combated other diseases like SARS successfully and I am sure we will have a solution for this too very soon. It certainly has affected the stock markets and overall business sentiments. But given the fact that China has been able to fight it successfully, the other countries will also do it. Meanwhile, with central banks cutting rates, this might prove to be a boost for the industry.”