From: udcrusd@meaddata.com (Sylvia D'Cruz)
Subject: News Report: A look at one Indian entrepreneur
Organization: Mead Data Central, Dayton OH
Date: Mon, 6 Apr 1992 14:47:43 GMT
Distribution: soc.culture.indian

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                 Copyright 1992 The Financial Times Limited;
                                Financial Times

                            April  2, 1992, Thursday

Showman on a magic carpet ride abroad / A look at how one Indian
entrepreneur made his name

By DAVID HOUSEGO

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    As  India  heads down the path of export-led growth, it is running up
against the same problem that beset Japan, Korea and Taiwan in their early years
of expansion - a reputation for shoddily-made, ill-designed goods.

    One of the few Indian companies to have succeeded in selling high-quality
products abroad under its own brand name is Shyam Ahuja. A Bombay-based,
family-owned concern that began by making durries (flat woven rugs) it now
sells hand-made furnishing fabrics through more than 80 up-market stores from
New York to Tokyo, Hong Kong, London and Sydney.

    When Shyam Ahuja, a flamboyant showman with a taste for self publicity, set
up his own business supplying durries, he aimed at the top of the range:
designers like David Hicks and stores like Ralph Lauren in the US and Liberty in
London. An inveterate dropper of famous people's names, he claims that Sonia
Gandhi, George Bush and Margaret Thatcher own his durries.

    Unlike most other Indian companies, he recognised the importance of having
his own brand name, and marketing it hard. He spends three-quarters of the year
travelling abroad, keeping in touch with international tastes, talking to buyers
and making his presence felt at international trade exhibitions.

    By selling under his own name - as opposed to most Third World manufacturers
which supply goods to chain stores that market them under their own labels -
Shyam Ahuja has ensured that profit margins are high. His reputation for quality
and design enables him to charge higher prices than other manufacturers
producing similar goods. 'I see what the market can pay,' he says, admitting in
the same breath that his production costs are relatively low. Retail prices
abroad are about four to five times higher than the cost of a fabric at shipment
from  India.

    Shyam Ahuja claims responsibility for introducing Indian durries to the West
in the 1970s. He took the traditional floor covering and added new designs and
lighter, pastel colours. He also used finer cotton or wall yarn and ensured it
was well finished. He now complains that other Indian manufacturers flooded the
market with poor-quality copies of his designs - destroying the image of the
durrie abroad.

    In 1983 he made another breakthrough when Ralph Lauren bought his floor
coverings - but on the basis of designs supplied by Lauren. More recently he has
become restless at manufacturing for another brand name and is anxious to break
the link.

    He does not always get it right. He says that Liberty, his main London
outlet, last year told him that sales of pastel colours, which have symbolised
his designs, were plummeting. The result has been a new collection based on bold
reds and using themes from American Indian culture.

    The difficulty of producing hand-made products in  India  is maintaining
quality. Shyam Ahuja reckons that he has 18,000 weavers working for him -
equivalent to the workforce of a large steel mill. Most work from home and are
paid on piece rates.

    The company supplies the weaver with raw materials - cotton, dyes, wool - to
ensure consistency. Of the 250 permanent staff on Shyam Ahuja's payroll, a large
number are involved in inspecting goods at different stages of manufacture.
Shyam Ahuja claims that he rejects 30 per cent of the products that arrive at
his Bombay headquarters.
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Sylvia D. D'Cruz                                
Mead Data Central                               Systems & Product Technology
Bldg. VI, 9595 Springboro Pike                          udcrusd@meaddata.com
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