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K.P. Ramasamy’s Journey from a Farm to Becoming a Supplier for Global Brands

K.P. Ramasamy’s Journey from a Farm to Becoming a Supplier for Global Brands

K.P. Ramasamy, a farmer's son who could study only till high school, set up one of India's largest knitwear garment export businesses which supplies to top global fashion brands like Marks & Spencer, H&M and Primark

 GIVING BACK: K.P. Ramasamy, Chairman, KPR Mill GIVING BACK: K.P. Ramasamy, Chairman, KPR Mill

It was the late ’90s when a young mill worker asked Chairman K.P. Ramasamy if he could help her complete her education, transporting the man back 25 years to when he had to quit college to return to his village because his farmer father could not afford to educate all four sons.

Why shouldn’t we educate the young women in our factories interested in studying, he asked his brothers and the rest of the management. A correspondence programme was arranged for around 50 women workers at their mill. They took to it with gusto and cleared their +2 examinations with flying colours.

Beaming, like a proud appa (father) that his employees refer to him as, K.P. Ramasamy (KPR) recalls saying in Tamil: “Inimey ovoru varushamum indha maadri padikavekkalam (Let’s do this every year).” Today, some 27,000 women have completed their education, even earning an MBA in many cases, while working at the Coimbatore and Tirupur-based KPR Mill. Some have become nurses in nearby hospitals, a few work at IT firms and many have returned to work at KPR Mill.

“Satisfied employees are better performers. It’s a win-win,” says the septuagenarian. The motto has held the company in good stead even through the Covid-19 pandemic. When factories across the country sent away their labourers during the nationwide lockdown in 2020, KPR Mill gave its workers a choice: If you stay, we will provide you food, shelter, full salary and entertainment. Each of their 12 factories has a cinema hall, sports facilities and an auditorium. “100 per cent of the people said we will stay here only,” says KPR. The company has around 25,000 employees.

What would have happened if the lockdown had extended to 6 months, he asks himself now. Revenue was zero. Expenses were running into crores. And lenders were watching keenly. Thankfully, he says, the lockdown was relaxed in two months. They were able to swing back to full efficiency within a week of restarting operations. Other factories were grappling with labour shortage for 3-4 months after. “What we lost…no, sorry, spent in those two months, we made back in two months… It was risky, but it turned out to be a good thing.”

His youngest brother and MD P. Nataraj calls him the HR Head who has really built the company’s culture. “He meets all the people directly. There is no separate lunch for the Chairman, MD or staff. Whoever visits our factories, we will have lunch together with the staff,” he says about the patriarch of the Rs 3,000-crore profitable family business, who is the winner in the Textiles & Apparel category of the BT-PwC India’s Best CEOs ranking.

Starting off with a modest loan of Rs 8,000 he took from his mother’s uncle in the ’70s to get into power loom fabric manufacturing, he and his brothers set up the KPR Mill company in 1984 and grew it into the fully integrated knitwear garment business it is today with factories to spin cotton into yarn, knit yarn into fabric, process the fabric, produce garments and export them. “Vertical integration from yarn to garment gives KPR an edge with lower cost of production than unintegrated peers,” says Bharat Chhoda, Research Analyst, ICICIdirect.

Getting in, they didn’t have any big ambitions apart from making a livelihood. “We had honestly not set any aim of achieving this much, or earning these many crores,” says KPR. But a chance conversation his chartered accountant brother Nataraj had with a friend around 2003-04 about his family’s vision for their business to grow beyond generations sparked off their journey to the bourses.

Go for a public listing after raising private equity and be prepared to change your mindset to run the company professionally, advised the friend. After many rounds of discussion within the family and with Ernst & Young consultants and getting three US-based investors on board, the company went public in 2007. “When my brother approached me with this idea, I was apprehensive. But he was confident of taking it on without an issue,” says KPR. The shares were listed at Rs 225 for 10 shares. Today, it has given its shareholders 30x return, rising steadily over the past 18 months.

Though their core business was spinning, the focus is now squarely on the garments export business, says KPR. The 157 million knit garments they produce and export every year to global fashion apparel brands like Marks & Spencer, H&M and Primark bring in around 40 per cent of their revenue. The plan is to double the capacity, he says. “In the past 3-4 years, we have seen merit in expanding the garment business. So, we commissioned another garment factory last month.”

Calling it a positive move, Chhoda says KPR Mill has used its capacity optimally and got a premium in realisations from global brands owing to strong demand. “It has improved its garmenting segment margins. The key challenge will be to maintain optimum utilisation after the recent capacity expansion and continue the momentum of profit growth.”

The company has also forayed into retail in 2019 with its FASO brand of premium men’s innerwear and athleisure, selling from 2,500 stores across south India and through e-commerce platforms. “We should have gone pan-India by now, but because of Covid-19 the plan got delayed,” says KPR.

With one son of each of the three brothers also having entered the business, the family is hard at work on their vision: “We have dedicated our entire life for our business. Engala thaandi indha business poganum (So, this business should grow beyond us).”

 

@SaysVidya