Interviews
MD of Loyal Textiles disapproves notion of labour shortage
22 Jul '11
3 min read
A serious labour shortage is pinching the Indian textile sector, irrespective of the region they operate from. Whether it is in the textile hubs of Ludhiana or Surat, shortage of labour is making it difficult for entrepreneurs in the Indian textile sector. This is forcing textile plants to shift to smaller towns and rural areas.
A recent study commissioned by industry body ASSOCHAM across 100 textile companies in Ahmedabad, Surat, Kolkata, Amritsar and Ludhiana reveals that, 45 percent of those surveyed said, they are using only 50-60 percent of production capacity due to labour shortage. Around 10 percent of respondents said, they are mulling moving production factories to rural and interior areas, where workers are available at low wages.
“Companies moving to smaller towns for labour is natural because if you want to get labor at the lowest costs and retain them, you will have to go where it is available at the lowest cost. I think it is ridiculous to think of owning textile mills or garment factories in urban areas anymore”, avers Mr Manickam Ramaswamy, MD - Loyal Textiles.
He adds, “We are actually located in a rural area only. Our main mill is in Kovilpatti, we have another mill 10 kms between Kovilpatti and Shahpur, then we have another mill about 20 km from Madurai, we have a plant about 30 km from Pondicherry and we have another plant in a small village in Andhra Pradesh called Markapur.
“We had a garment factory in Chennai but we moved it out about 15 years back. We did not wait for this crisis to happen. In any case, all our units are highly modernized and mechanized; even our garment units are equipped with all the modern machines and equipments. We have got everything possible.
“So, we work on productive labour to non-productive labour basis, i.e. tailor to non-tailor. Basically we work on the idea of improving productivity and do not depend on the hope of getting cheap labor and getting disappointed later on. We always pay Rs 10-20 more than the market price and provide all other comforts like good food, good residential facilities, etc.
“I would not like to call it shortage of labour; I would call it non-availability of low cost labour. Labour is available and that too plenty but, you have to pay a price. Thanks to Government schemes like NREGA, people do not want to work at salaries which are not covering their costs. We want to hire workers at pathetic wages and when we do not get them, so we complain that we are not having workers.
“Workers are available and if you pay a decent salary they are willing to work regularly, they are willing to stay with you. So, we have to rework our economics based on the minimum salary which is required by the workers. It used to be around Rs. 60-70 around five years ago, today it's about Rs. 250. So, if we work on our economics based on Rs. 250 and design our production systems accordingly then there should be no problem.
“But if we want to stick to antiquated methods of working without really looking at improving our activities, automation, mechanization, industrial engineering, optimal work conditions etc. then of course one will have all kinds of problems. Yes, labour cost in India also is going up and sensibly it should go up. How long can we have poverty!” he summed up by saying.
A recent study commissioned by industry body ASSOCHAM across 100 textile companies in Ahmedabad, Surat, Kolkata, Amritsar and Ludhiana reveals that, 45 percent of those surveyed said, they are using only 50-60 percent of production capacity due to labour shortage. Around 10 percent of respondents said, they are mulling moving production factories to rural and interior areas, where workers are available at low wages.
“Companies moving to smaller towns for labour is natural because if you want to get labor at the lowest costs and retain them, you will have to go where it is available at the lowest cost. I think it is ridiculous to think of owning textile mills or garment factories in urban areas anymore”, avers Mr Manickam Ramaswamy, MD - Loyal Textiles.
He adds, “We are actually located in a rural area only. Our main mill is in Kovilpatti, we have another mill 10 kms between Kovilpatti and Shahpur, then we have another mill about 20 km from Madurai, we have a plant about 30 km from Pondicherry and we have another plant in a small village in Andhra Pradesh called Markapur.
“We had a garment factory in Chennai but we moved it out about 15 years back. We did not wait for this crisis to happen. In any case, all our units are highly modernized and mechanized; even our garment units are equipped with all the modern machines and equipments. We have got everything possible.
“So, we work on productive labour to non-productive labour basis, i.e. tailor to non-tailor. Basically we work on the idea of improving productivity and do not depend on the hope of getting cheap labor and getting disappointed later on. We always pay Rs 10-20 more than the market price and provide all other comforts like good food, good residential facilities, etc.
“I would not like to call it shortage of labour; I would call it non-availability of low cost labour. Labour is available and that too plenty but, you have to pay a price. Thanks to Government schemes like NREGA, people do not want to work at salaries which are not covering their costs. We want to hire workers at pathetic wages and when we do not get them, so we complain that we are not having workers.
“Workers are available and if you pay a decent salary they are willing to work regularly, they are willing to stay with you. So, we have to rework our economics based on the minimum salary which is required by the workers. It used to be around Rs. 60-70 around five years ago, today it's about Rs. 250. So, if we work on our economics based on Rs. 250 and design our production systems accordingly then there should be no problem.
“But if we want to stick to antiquated methods of working without really looking at improving our activities, automation, mechanization, industrial engineering, optimal work conditions etc. then of course one will have all kinds of problems. Yes, labour cost in India also is going up and sensibly it should go up. How long can we have poverty!” he summed up by saying.
Fibre2fashion News Desk - India
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