Koncherry investing at Coimbatore

Alleppey district in Kerala is coir’s own country. It’s from here that most of India’s exports of coir products like mats and rugs take place. And leading this charge is Koncherry Weavers, a familyowned business in Cherthala town that’s been around for the past 78 years. With a turnover of Rs 80-crore and customers like Wal-Mart and Ikea, CEO K S Shaji says Koncherry is the only approved supplier from India for natural fibre products to big retailers. Coir products manufacturing in Alleppey began sometime in 1858 and Shaji's grandfather P K Velu started his firm in 1929. Eighteen years later, his son C V Susheelan took charge, focusing on exports, which were taking off in a big way after India's independence. Shaji joined the business in 1978 after his BSc in Physics.

“Around that time, awareness about natural fibre was increasing in the US and Europe,” he says, adding that his first million happened in 1992 when Koncherry’s first big order came directly from Pottery Barn, a speciality home furnishing store in the US. Barn was earlier buying from agents in New Delhi who in turn sourced from Koncherry. Soon other big retailers like JC Penney and Target also began sourcing from India, and Koncherry’s exports began to rise. “We were upfront in catching on to this wave and the millions kept adding up,” says Shaji. Working with big name retailers has helped in professionalising the business, improving systems and processes, and bringing in quality standards. For instance Ikea, which stocks Koncherry's products across many of its 260 stores globally, works on a real-time basis with its suppliers, enabling them to structure their production and shipping schedules accordingly:

“We know how many pieces they are selling everyday,” says Shaji. It also generated demand for jute and synthetic fibre based products, prompting Shaji to expand his product portfolio.However, dealing with large global retailers means coping with high volumes and, often, inconsistent demand. For Koncherry, which relies on a pool of hand weavers this proved to be a limitation, says Shaji: “Ours is like a cottage industry, and since the buying pattern of retailers is not very regular, it becomes very difficult for us to meet their requirements.” Moreover, with the furious pace of growth in modern retail in India, and the fallout of the appreciating rupee, Shaji began eyeing business from Indian retail chains like Reliance and the Aditya Birla group's new venture, More. So he's investing in machinery to automate the weaving process, produce more synthetic fibre based products and therefore equip the business to deal with this growing demand.

To begin with, Shaji says he's invested Rs 25 crore in a new facility in Coimbatore with 23 machine looms and this will go up as demand rises. “All big retail buyers are planning to double their requirements over the next few years. Therefore, we need to shift from hand-made to machine-made products. That's how we can compete,” he says. Going forward, Shaji says he will be open to investors but that's a year down the line. Right now, he's busy inducting his 25-year-old son Vivek into the business with responsibility of the firm's marketing and to manage the new Coimbatore unit and, we guess, figuring out where his next million will come from.

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