Sustainability has moved from being just a buzzword to become a culture of textile and apparel industry. In today’s time, buyers are looking to place orders in the factories, irrespective of their scale, that are conforming to norms and are driving sustainability efforts in all three areas – People, Planet and Process. However, the buying side has always been accused of not paying ‘extra’ price for these sustainable efforts of factories. And, that’s where the industry seems to be going wrong when they ‘expect’ to be paid for what should be their responsibilities. If there is a legitimate reason given by the factory in terms of cost, most of the big buyers are often taking care of the same and are actually paying the factories, in addition to long-term benefits the factories are getting out of these initiatives, in contrary to the common belief of the factories.
Team Apparel Resources tapped top-level apparel export factories that are spread across India to discuss in detail about the issue and tried debunking the myths around sustainability and its cost.
A large chunk of the industry believe there is a double-standard from buyers’ side for sustainability… that’s not entirely true!
On one hand when majority of the exporters feel buyers’ double standards for sustainability norms are hampering their cost of operation, there are exporters, on the other hand, who have been working well in collaboration with buyers to bring down the cost of process and product. Carnation Creations – based out of Coimbatore, is one such company that feels sustainability does not only mean how one is taking care of environment but the process and entire system – man/machine/material; for which investment is necessary and the cost of sustainable initiatives should not be borne by customers only rather it should be equally shared by factories.
“At Carnation, we don’t ask customers to pay for our initiatives and they themselves share wherever it is necessary. Sustainability initiatives do not put burden on factories or on brands in long run, if implemented correctly, at least in terms of manufacturing process…Then comes sustainability investment in product categories where the buyers do have different norms and material requirements such as BCI Cotton and blend of other sustainable fabrics for their product line. As far as Carnation is concerned, we have been using BCI Cotton for few of our customers and they are well aware of the price difference between normal cotton and BCI/Organic cotton for which they are ready to pay. However, it is a fact that the prices of organic cotton have skyrocketed, so it is really a big question at the moment as to how organic cotton is sustainable for many apparel manufacturers,” stated Akhilesh Anand, MD, Carnation Creations,
Akhilesh further stated, “We are also using packaging material made out of sustainable ‘Maize’ fibre and the customers we are working with are paying for that. They have even nominated few vendors for the same. Our customers have even come up with innovative ideas as to how they can remove the number of labels, stickers and tags from the garment and help us save costs and become more sustainable by using less material.”
Texport Syndicate, one of the largest and leading garment export factories based originally in Bengaluru, has been working with buyers such as M&S, H&M, Ralph Lauren, Abercrombie & Fitch and American Eagle among others that looked at the factory after it started huge drive for becoming sustainable and compliant from 2007 onwards. Some of these brands took sustainability and environment-friendly policies aggressively, ran mission to set benchmark in initiatives such as reducing carbon footprints in collaboration with the companies that were doing maximum business with these brands and Texport Syndicate is one among them.
“Largely there is a huge concern for the environment but forget about brand’s perspective. Is it not compliance to your own ecosystem that has been stipulated by both state and central government agencies? For example, if a factory can put up a Rs. 50 crore plant, then they can put Rs. 2 crore ETP also. You have to abide by the law. Previously, even if it was required but nobody made you do that and you never looked into it, then time has come when every brand is looking into it! So, you, as a factory, have to be conforming at the first place. To be compliant and sustainable, the cost is hardly anything but to be non-compliant and unsustainable, you pay more than you can even map. If you don’t have ETP and throw sewage water somewhere, the pollution control board will chase you and you will try to manage them! This happens in other areas too in a factory premise and projects a bad image of brands. That’s huge cost of non-conformance,” explained Avinash Misar, Director and CEO, Advanced Material Division, Texport Syndicate (India) Ltd.
It’s worth mentioning here that the Bengaluru factory of Texport Syndicate recycles 99.70 per cent of water. The largest usage is sewage plant. “One thing you can do is you can throw it and other way is you can treat it well and keep it for months to use in your factories! The same also fits true when you are asked to replace CFLs with LEDs…Factories say that CAPEX has gone higher, but you analyse that the energy saving makes your operational cost go down even if CAPEX has gone a little bit up. There are ample studies available in the market that show the factories can generate revenues (by saving costs in long run) out of it,” asserted Avinash.
Another area where Avinash pointed out is the increasing packaging cost in a factory. He says that the need for packaging has always been there and the only thing is that now environmental-friendly packaging is being asked for. The packaging cost has never been more than 2 per cent of overall garment cost and even if it increases by 50 per cent (which it doesn’t), the total cost of the packaging will still be just 3 per cent and it doesn’t really pinch the factories.
Sharing a somehow similar opinion, another leading garment export house AKR Industries, located in South-India that caters to both EU and USA markets, said that the return on investment in sustainability is marginal and usually takes many years but there are both tangible and intangible benefits.
“Generally, there is no specific and direct price advantage with buyers for the huge sum of money one invests in sustainability initiatives. Adding to this is the fact that we are competing with the different environment policies in different Indian states and hence it becomes unequal competition at both fronts and no level-playing field is available as of yet. But, since sustainability has become more than a buzzword in the industry, our contributions and readiness to adopt and deliver are well appreciated by our customers and help to grow the business. That’s why it can be construed that sustainability generates tangible revenues though at a slower pace,” commented Loganathan Kalimuthu, MD, AKR Industries.
Being sustainable brings more business and the fact can’t be denied…
Just by being conforming to the sustainability norms, the factories can get orders for long period of time, but by ‘ethical’ negotiations. Those who crib about added cost actually fail to negotiate with buyers in correct and ethical way and this is why many of the factories have lost touch in buying houses who aren’t responding back to them, as opined by Jyotiee Thakkur, Director of Blueberry Apparels – a Noida-based apparel export factory.
“Sustainability is a culture and it doesn’t come at ‘extra cost’ but ‘character’. There are factories who actually ask/expect more from their buyers to keep themselves sustainable and clean. That’s not the right thing to do. We are running a drive on sustainability in India that aims at bringing back more orders in the countries by boosting efforts in sustainable initiatives. If we commercialise something that should be our conscience, then we won’t be able to fetch business,” mentioned Jyotiee who is also the mission director of ‘Textile Incubation Mission’, a drive on sustainability initiatives in India.
If negotiation is done right, brands do fill factories with orders for a long run, machines aren’t being idle in such a case, and factories have scope of increasing productivity when they have more balanced lines.
“At the end of the day your bottom line improves. What more a factory wants…” said Avinash, adding, “When I joined apparel industry back in 2005, the biggest problem I faced was that of non-conformance. Factories didn’t pay proper overtime rates to the workers and didn’t manage OT books properly. At the end of the day, what outcome will you get? You will have more attrition. And if 4 sewing machines out of 40 machine line remain idle, the production will get hampered and the lines will be called ‘limping lines’. That’s where you lose ‘people’ sustainability in your processes. A little investment in payroll management systems, and proper biometrics machines will see confident employees in your factory as they are sure of getting OT rates as per standard among other benefits. Holistic view will only make you cost-effective,” said Avinash.
From 2005 to 2007, Texport Syndicate ensured that it had all sort of certifications (WRAP, Metal Certification, ETA, Pollution clearance Approval etc.), that helped it circulate the positive word that they are a fully compliant factory with some great sustainable measures and the impact was much higher. “Buyers started looking at us, and big brands came to do business with us,” concluded Avinash.