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Mangalagiri: Case Study of Master Weavers

In Mangalagiri in Guntur district of Andhra Pradesh, master weavers dominate and handlooms cooperatives are more or less non-existent. The master weavers handle a large volume of business and have expanded from a small base initially. But the entry into the trade has been managed differently by different entrepreneurs, in terms of their approach to flexibility, product differentiation, new markets, etc. This case study focuses on a small sample of five master weavers from the region.


Case Study of Master Weavers

In Mangalagiri in Guntur district of Andhra Pradesh, master weavers dominate and handlooms cooperatives are more or less non-existent. The master weavers handle a large volume of business and have expanded from a small base initially. But the entry into the trade has been managed differently by different entrepreneurs, in terms of their approach to flexibility, product differentiation, new markets, etc. This case study focuses on a small sample of five master weavers from the region.

B SYAMASUNDARI, the divergence is not so great when it SEEMANTHINI NIRANJANA comes to product variety.

his case study focuses on a small sample of five master weavers from a single region – Mangalagiri in Guntur district of Andhra Pradesh (AP). It seeks to bring out a variety of responses towards markets from different master weavers operating from the same area. All of these are family enterprises, but their scale of operations differ: for instance, loom capacity is not the same; the volume of production is different, though

Entering the Trade

The overall handloom production pattern in Guntur district as a whole, and in Mangalagiri in particular, is one where master weavers dominate, and handloom cooperatives are more or less non-existent. It is reported that in Mangalagiri alone, there are four non-functioning cooperative societies and nearly 300 master weavers. The distinctive Mangalagiri saree with the

Economic and Political Weekly August 5, 2006 ‘zari Nizam’ border continues to be much in demand, and in the last decade and a half, dress materials have also become popular. The volume of business carried on by master weavers is quite high, and there appears to be a high demand for skilled weavers in the region.

Of the five master weavers cited here, three have entered the trade gradually. All of them started on a modest scale with around 10 looms, and now have grown to more than 100 looms. All of them have been self-financed, or have raised money from close kinsmen. Each of them started with producing the local varieties of products – which is the thicker variety of sarees for agricultural families. Once business did well, they started expanding production by introducing new products

– sarees in higher count, often with zari border, for the middle class families, landowners, and others. Once this segment stabilised, the master weaver started seeking newer markets. Often, this meant a change in product, from sarees to dress materials. Sometimes, the search for new markets is also motivated by a decline in the local demand, or due to cost-cutting by other producers, or due to powerloom imitations of sarees being produced at cheaper rates, etc.

(a) Building on a Strong TraditionalProduct: Quality in Local andNational Markets

PLR is a self-made master weaver who is distinctive and saree production is his mainstay. His scale of operations is fairly limited. He minimises risks by supplying to a small clientele who are satisfied with the quality and design of his products. He never produces to order. His customers are from Madras, Kerala, Hyderabad, Erode and Coimbatore. PLR started out with 10 looms, and now employs 120 weavers, about 50 per cent of whom work in sheds built by him and the rest work from their home.

An intuitive understanding of what the market wants seems to have clicked in his case. Backing this is his insistence on a “quality product” and the belief that this, combined with proper information from the market is the basis for a successful business enterprise in handlooms. His business proves that if produced keeping the best of quality parameters in mind, a traditional product like the saree will definitely sell well. Though the business is on a small scale, this master weaver is able to dictate terms to the market and retain a sense of independence. It is revealing to note that he stands alone in product variety in the Mangalagiri belt, where others have switched to varieties like dress materials to survive in the market. His relations with weavers and his attempts to motivate them have no doubt stood him in good stead.

(b) Changes in Production:Marketing on a Medium Scale

Unlike PLR, MR is a master weaver who markets on a medium scale. The risks involved are slightly higher but there is an inbuilt safety mechanism in the form of limiting the number of players, which is playing the field with a set number of unknowable factors. He expanded business when need arose, and also altered product profile. These changes were made cautiously and were limited. They did not jump from one contact to another, and product was varied only after field survey by their marketing personnel.

The following description is an indication of the process of changes in product over the decades, and the corresponding changes in the kinds of markets/customers being serviced. As master weavers shift from saree production to dress materials, the target market also changes; does their marketing strategy then change, how do they reach out to new customers, and what are the problems being faced – these are some of the issues probed here:

MR’s family has been in the business of cloth trade for several decades now, though they were originally agriculturists. MR says that his father started out with two or three looms and the total number of looms owned by the family peaked in the 1990s with 400 looms, which has now come down to 100.

The kinds of products which they had woven over time gives an indication of shifts in demand as well. From early 1965 to 1990, their main product was pattubadi sarees, which was sold mainly to agricultural labourers in Palnad, Macherla, Khammam, etc. It used to cost between Rs 12 and Rs 15 in 1960s, but by the 1990s, it cost Rs 260. The demand for these fell steadily over the decades, probably due to both the fluctuating fortunes of this class in the local economy and the cost factor.

By the 1970s, they also ventured into other products. In the 1970s and 1980s, export orders for shirting material came from traders in Chennai and Bombay, and also HHEC in Chennai. From early 1990s, they innovated, and began to produce bordered sarees of 80s count, which became a big hit. Sarees from Mangalagiri are well known because of the good weaving and colours. He says that in 1993 he had only 60 looms weaving sarees, this went up to 400 by 1996. Sales were not only within AP, but also in Nagpur, and other places. Their servicing staff also went up, and he says that he had 12 gumasthas under him at that point, since visits had to be made continuously to the districts for contacts with retailers, to check how the sales were, etc. He feels that until the 1990s, the market was good, since there was not much competition, there was good demand and new colours were attracting buyers.

It is clear that with changes in markets, the production process has also had to undergo some change. The weavers have had to get used to new demands like delivery schedules. The master weaver has to convince the weavers that prompt deliveries ensure future orders from the concerned and other parties. Major changes in the work schedule follow, and the capacity of the production base to adapt to the changes determines the degree of success of the particular master weaver. At the same time, there are other costs to be borne, as the hesitation to introduce new designs illustrates.

(c) Changes in Production:Business on a Large Scale

The profiles of the two master weavers in this and the next section are in marked contrast to the above two, not just in terms of scale of operations, but also in the way they approach the markets. GR and R are big master weavers who are both willing to take risks and believe in entering new markets aggressively. They also actively use contacts to build further contacts and are expanding their business continuously. They are ready to execute large orders and change product designs as often as is required. R has gone even further to create new markets with innovative designs.

(i) Expanding markets through product diversification: R is master weaver whose business is located in Hyderabad, but his production base is in Mangalagiri. The famous ‘Nizam border’ is his innovation, and has imparted an immediate identity to Mangalagiri products. Originally from Mangalagiri, R’s family had always been in the business of selling handloom cloth. The two distinctive features of Mangalagiri weaving, according to him, are the sizing process and the weaving technique itself.

Economic and Political Weekly August 5, 2006

In Mangalagiri, closely woven and tight fabric is very important. Earlier, it used to be only sarees, usually in dark colours. These were the traditional nine yards sarees, worn by agricultural labourers, people who sold milk, etc.

Back then, the stock would often pile up at certain times of the year. This was because being agricultural economies, there would be money to spare for clothes only after a harvest, but not all the year round.

His search for a new and larger market in cities had its roots in the seasonal demand for sarees in a local market. With this came the understanding that each segment is highly differentiated, each with specific preferences. As R says:

This was the beginning of a learning process. Colours had to be changed (from greens and purples to lighter shades), the weight of the saree had to be altered (it was seen as too heavy, the buyers wanted “lighter” sarees, which meant changing the counts), more variety was expected, so different colours were used for warp and weft (kalnetha), and finally, over time, the product itself had to change. But for the weaver, the shift from saree weaving to a new product could not be sudden, and the dupatta formed a nice bridge, since its production needed only slight modifications in the weavers’ understanding and skills, because of its similarity to the saree structure.

His business decisions reflect a clear understanding that markets are differentiated. Exploring new kinds of markets is a constant attempt, but there is also a conscious endeavour to balance design inputs and innovations with existing loom technology and skills. He has been able to read the pulse of the market correctly, and is also ready to change the product once the existing market becomes saturated. Today, his own trade is both national and for export. His products range from yardage and kalamkari dupattas, to the traditional sarees, to furnishings, quilts, scarves for a Paris market, indigo fabric for a Japanese client, shirts made from Mangalagiri fabric, etc.

(ii) Expanding business with a fixed product range: We often work with a stereotypical model of a master weaver and how he operates. This is true to a large extent, especially in the way kin and family networks are used in the business. But there are also diversities when it comes to product and the way markets are accessed. Could it be that the master weaver channel is itself undergoing some amount of change, and new formations are emerging in order to meet the market’s challenges more efficiently? Some indications emerge in

the account below. GR’s father started as a supervisor assisting a local master weaver in 1985. Slowly, he set up on his own, and GR himself has taken this growth further. Today, about 10 master weavers, all of whom are family and kin members, have formed a marketing trust. GR manages the marketing side of this enterprise. He says this covers about 500-600 looms altogether, maybe more. They produce on order as well as on their own. This general production depends on the preferences in different regions and states, which they have gauged through exposure in exhibitions, etc. Only about 5 per cent of their total production is exported, not directly, but through traders. Earlier, 90 per cent of their production used to be sarees; now, it is 80 per cent dress materials and 20 per cent sarees.

Though family enterprises are not new in the textile industry, it is important to note such an enterprise working successfully in the handloom sector. This indicates the size of the market being considerable which is always a hotly debated issue in this sector. This case illustrates how businesses can be expanded without much product diversification. The master weaver in this case relies entirely on contacts and tries to increase the volume of sales for a type of product. This is also possible because of the large kinship network which will allow him to chase contacts from Calcutta to Delhi.

(d) Risk and Flexibility: Making theMarket Work for You

The ability to absorb risk is often considered as a hallmark of an efficient enterprise. But in a field as vast as the handloom industry, where the players are so diverse, the form of risks can be different. Also the effect of risk-taking on big and small players will be different.

Risks and costs for the medium-sized player:

MR buys yarn from private yarn traders, on a week’s credit, after which 25 per cent interest is charged. So he has to ensure that rotation happens sufficiently fast. But there are other problems which are coming in the way of efficient rotation of capital. Since 1999, MR, who used to concentrate on saree production, has turned to dress material production. The procedure is the same, show samples to retailers, who will order, or pick up from existing stock. In recent times, he has been having problems with a customer who has been returning quite a lot of stocks on the grounds of poor quality. Such production is largely on order so there is no guarantee of local sales either.

MR represents a type of master weaver who has always been seeking newer markets by contacting retailers in cities and towns across the country as well as some export houses. However, with this has come the uncertainty of the market as well. First, the rejection of stocks by customers raises questions not only of how to tackle the “quality” issue in handlooms, but also of who is to bear the risk of such investment? Second, there is a constant pressure on the master weaver to rotate the capital invested efficiently, more so because he gets his yarn on credit. Also, since the final product will not take too much of a mark-up, it appears that – at this scale of business – the master weaver’s profit margin lies either in cutting wages or increasing volume of sales.

The other important dimension adding “risk” to the entire cycle is credit transactions. A significant part of their trade is on credit, but these are daily decisions where risk has to be constantly weighed. In such a case, knowledge of customers and contacts (kin or otherwise) becomes very important. But these may not always work. For instance, GR gave the example of a “customer” who procured on cash the first few times, and on the third time, took stocks on credit worth Rs 15 lakh from four to five master weavers in Mangalagiri (including himself) and is now absconding.

It is clear that while the flexibility of master weavers in adapting production to market demands has probably borne fruit, there is also the constant danger of a business run on credit. There are daily risks they take with customers. At the same time, there are also some aspects over which they have no control, like increasing yarn prices, or powerloom imitations. Like any other business enterprise, bearing a certain amount of risk and flexibility are important in making the market work for you. But is it really true that this “enterprise” is like any other? What of the “market” which this enterprise targets? Is there truth in the observation that there is now “excess production” in Mangalagiri and that there are a large number of handloom producers vying for the same market? If the handloom market is not indefinitely elastic, then what strategies have to be adopted for market creation and market expansion? These are issues that each player in the marketing field is constantly grappling with.



Economic and Political Weekly August 5, 2006

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