In this episode the author describes the intricacies of setting up a garment factory the Gulf with most of the workers being women. The 18th part of a series describing the unknown triumphs and travails of doing international business
AK Ramdas
Although Rupak was totally involved in the development and supply of various building materials, there were a few essential and fast moving items that his company always had in stock. He had a very able and dependable associate named Vijay and at the very outset Rupak made it clear that, in true sense, he had no suitable opening for a person of my experience or calibre. Yet, he didn’t want me to even talk to many others in the field, who had come to know that I was no longer associated with Ajay in terms of work. He had respect for me as I knew his father well.
The next day, Rupak picked me up en route to his nail factory in Rashidiya. While we were on the way he explained the set up there and how he had bought a defunct factory, which really was collecting rust. Rupak is a fine young man, full of energy and a great planner.
I did not take a head count, but, possibly there were 60-70 workers in the plant. Back in the office, he would know the market shortage, as the construction was still in full swing, where the nails were used in huge quantities, and he would be able to deliver the finished goods within few hours after getting the order. It was an enviable sight and he had a great staff support.
My first couple of weeks were spent in knowing what was happening; there was nothing that I really could contribute in the well-organized set up he was running. He did not want to get involved in getting another dirty item like CI pipes or fittings, as these he could command a price advantage by simply buying on cash and selling on credit to his own selected customers. So, why should he import these, when these were available locally from others?
It was at this time, unusually, I received a call from a friend, by the name of Trinath; he had called home, and my wife directed him to call the office. A brief reference to Trinath would be only fair.
A few years earlier, when I was walking down the street in Hong Kong, may be a hundred yards away, I saw someone who looked very much like an Indian. He must have been doing the same thing too; when we came to the contact point, “Are you from India?” was the question that we both asked each other! After lunch, I took him to South Sea Centre, where our office was located and Amanda was busy handling a supplier.
He explained that he was one of the leading manufacturers of ties in New Delhi, popularly known as ‘Zorex’, and he was occasionally making ties for others on contract basis. Besides, he was making shirts and exporting them, too. He was on a visit, looking for some Chinese suppliers in Hong Kong, who could meet his needs; he had the necessary import license, as he was an exporter. I immediately authorized Amanda to assist him during his stay and for the next couple of days they were able to finalize business. At the end of it, when he wanted to pay for our services, I requested him to send the commission to the company, as Amanda had really worked for it, and by doing this service, she was acquiring new knowledge on a business that we knew nothing about. After that, we exchanged a few courteous faxes, but nothing happened.
Now this Trinath was on line, asking me to visit the Jebel Ali Free Zone and find out if they were actually permitting the establishment of garment factories and more importantly, if they were giving visas for ladies to work, as staff in these units were mostly girls. He was excited about this possibility and he asked me to look into this area seriously; he said “Mr Ram, this is a profitable, long term business, work on it.”
I had been to the free zone earlier and generally knew that they were inviting investors to set up factories there, and assuring them of great support in terms of sheds, space and unlimited visas, and no condition of national’s participation. In other words, a foreigner could set up a company or manufacturing unit, without a local partner, which was compulsory outside the free zone.
I met a wonderful officer by name Saif Sultan; after discussions, he introduced me to Sheikh Sultan Ahmed bin Sulayem (chairman). We had a very detailed talk after I had shown keen interest. Once I established the rapport with Saif Sultan, I took Rupak for the discussion, who, based on my talks, had alerted his contact in Sri Lanka, where there were hundreds of factories, and they had no restriction of sending women workers abroad; India had this restriction at that time and Pakistan had officially banned their women to go abroad for work.
A lot of work was done by Rupak and his friend in Colombo, who actually located a suitable partner for collaboration. They were ready to move in at short notice provided we got the industrial license and commitment to get visas for girls and make arrangements for their safe stay. We obtained the license on 16 October 1984and went into production on 7 January 1985, and had a compliment of 240 boys and girls in the plant.
It was my first experience in dealing with such a large number of people whose language was foreign to me; we had only a couple of guys, a manager like Donald who could communicate, as we began to work at the factory site, which was part of a huge warehouse. I was processing visas on one hand and on the other, co-ordinating with the electrical contractor for the factory lay out plan; ordering for stools, cutting tables and other related items. It was hectic and long hours of work, with the initial A team we had received, whose job was to fix the sewing machines (which had been received on a CKD basis); matters relating to finance, on L/C opening for machinery and raw materials and co-ordinating with the Sri Lankan counterpart were ably done by Rupak himself.
I think a week or ten days after the electrical work had began, I got a call from the contractor that William McFadden, the engineer from the free zone had come and stopped the work and ordered people to leave the shed, as we had not obtained an approval of the layout plan for the factory from his office. While this was true, I had no idea that we had to get permission from him before commencing work at the site. I rushed back to chief engineer Brown, presented my sob story of being ignorant and sought his assistance. He gave me 48 hours to submit the drawings, which I managed to do, and our work was completed smoothly.
If I remember correctly, the work staff arrived on 4th and 5th January in two lots and our actual production started on 7 January 1985.
William McFadden was not going to be easy on us, because we had gone over his head to his superiors; so a couple of months later, raised to issue of air- conditioning the plant, because the heat would be unbearable by May. This shed was also shared by three other garment manufacturers and, in the initial stages everyone was simply minding his own business and not communicating with each other. We incurred additional expenses on this but work did not stop.
Production and exports from Gulf Industries began in right earnest; we had our own ups and downs; there were regular visits from our Sri Lankan associates and their Inbaraj was a popular figure when he visited the plant. There was no dearth of orders; and I began my quest for getting space on Air India to carry our cargo once in a while at least, but they were overbooked at Bombay stage itself.
We arranged for a fortnightly visit for site-seeing and market visit; medical facilities were readily made available and by the time we closed the factory and delivered the whole female staff to their camp, it was generally around 9.30pm almost every night. My days were 12 working hours every day, and even on Fridays, our staff worked for half a day, and the other half was spent for their personal marketing.
This was the time I developed the desire to learn the trade a little more, picked up a bit of Sinhala language, their customs and realised how close they were to our own people in India.
A few months after our successful launching of the garment factory, Rupak began his quest for shifting the nail factory from Rashidiya to the Jebel Ali Free Zone. We began our discussions with Saif, who was kind to show us around many sheds. Eventually we chose one that would be suitable to our needs and we had to get help from the free zone for getting the labour licenses for all the staff that was in Rashidiya. We provided all the necessary available documents and the transfer of the plant and the staff took place over a couple of months, as these came section by section, and we did not want to disrupt our supplies to the market.
We needed a qualified and experienced technical hand in running this new operation smoothly. With the help Venkatraman, manager of EEPC at Nairobi, we were able to get my former colleague’s son, Agrahari, who was running a nail factory there, to join us in Dubai. The nail factory became a great money-spinner for Rupak, the enterprising young man with a far-reaching vision.
The manufacturers in the free zone, began to get to know each other, as their numbers increased; Palmon had mostly staff from Philippines; most other female staff members came from Sri Lanka while some factories had men only, but in the end the overall population of garment workers was increasing, thanks to the great support that chairman Sheikh Sultan Ahmed bin Sulayem was extending for its growth.
I had a two-year contract and this was due to expire shortly and I had many proposals from known businessmen who wanted me to join on a profit sharing basis. It was at this time I also found that some changes in the management were on the anvil. It was time for me to leave and fend for myself with a working partner who was willing to give me a freer hand than what I was experiencing. After a chat with the owner, I decided to call it a day.
(AK Ramdas has worked with the Engineering Export Promotion Council of the ministry of commerce and was associated with various committees of the Council. His international career took him to places like Beirut, Kuwait and Dubai at a time when these were small trading outposts. From being the advisor to exporters, he took over the mantle of a trader, travelled far and wide, and switched over to setting up garment factories and then worked in the US. He can be contacted at [email protected].)
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