Kirloskars embark on silk route

The Kirloskars have quietly embarked on a journey that will see the group weaving profits from silk. If that sounds like an unlikely business for what is essentially an engineering group, it's not. Links with the rural economy are not a new thing for the Kirloskars. The vehicle for the new business is Kirloskar Silk Industries Ltd, a subsidiary of Kirloskar Brothers.

The silk project is in line with "the vision of the Kirloskar founding fathers, who helped modernise Indian agriculture by making the first iron plough in India", says Sanjay Kirloskar, chairman and managing director, Kirloskar Brothers Ltd. The company has been making "the prime movers of agriculture – pumps, motors, and engines". He says, "Today we are trying the same thing our founders did with sericulture by bringing modern technology into a very traditional industry."

Experimentation
The group is building a fully integrated sericulture project, "from soil to silk". The project has been launched on a 250-hectare (650-acre) plot of land at Dindori, near Nashik in northern Maharashtra. Eventually the project will extend to over 1,000 acres. The expected cost: Rs 6 crore.

The mulberry plantation currently extends over a 12-acre tract. Different mulberry varieties and plantation spacing have been experimented with, in a bid to evolve the most suitable variety and spacing combinations for the commercial plantation. Rearing trials too have been conducted on all available silkworm races, and those yielding the best results have been chosen for commercial rearing. The rearing has been carried out under controlled conditions to maintain the right temperature and humidity.

Five years into the project (first on a pilot project on a 5-acre plot at Shirwal, near Pune), the company has succeeded in producing 4A grade silk yarn on par with international requirements. And the first batch of premium silk ties produced from this yarn has been exported to Italy.

Since weaving facilities are yet to be put up, the company has farmed out the work of weaving. Kirloskar Silk will install weaving equipment next year, as volumes pick up. "This was a brand building exercise, for establishing our name in the market, " explains A Y Kathavate, director, Kirloskar Silk and the person in charge of the project. Ten thousand ties are to be exported by the end of the year.

The larger plan is to establish Kirloskar Silk in the silk material market, especially in furnishing fabric. "Ties will give us the niche, designer markets. Furnishing fabrics will bring in the volumes," says Mr Kathavate.

The reasons why
But the question persists. Why silk? Why is a hardcore engineering group like the Kirloskars venturing into sericulture? According to Kathavate, it was both the challenge and the fitment that drew the Kirloskars.

Consider the facts:

• Silk has always been considered precious – coveted, highly traded, and a good earner of foreign exchange.
• India is the world's second largest silk producer, producing 15,000 to 18,000 tonnes of it every year. Yet the country imports all the silk used in its exports, since Indian silk is of a low grade.
• Silk is a fabric of the future. Almost entirely made up of protein, it is a very skin-friendly and environment-friendly fabric. Cool in the summer and warm in the winter, it is comfortable to wear round the year.
• Silk production too is environment-friendly. No effluents are produced in the process. Even the water used to boil the cocoons to rid the yarn of glue is rich in protein, and goes back into farming, enriching the soil.

"On all these counts -- market potential, future growth prospects, environmental issues (which are becoming more and more important in the developed world) it seemed a good business to be in," says Mr Kathavate.

The entry of a group like the Kirloskars could make a difference. Although silk farming has been known in India for centuries, it has remained a cottage activity. Farms are fragmented, and it is uneconomical for small farmers to adopt modern, technology-intensive methods.

"Here was something that had such potential, and done rightly, would reap good rewards. It was also a technology challenge for the Kirloskars, besides being an industry that was most suited to India, with its agrarian background and suitable climate," explains Kathavate.

A way out
Although the idea germinated in the early nineties, government policy on private land holdings proved a hitch. Obtaining large tracts of land for mulberry plantation was imperative to set up the project along industrial lines. Recent changes in the policy on land holdings for agro-based industries came as a fillip, after which the project took off in earnest.

The sericulture project repeats another Kirloskar motif. Just as their entry into the engineering industry helped spawn a number of ancillaries, the silk project is expected to catalyse a hub-and-spoke operation of a different kind. In order to circumvent government restrictions on land holdings as well as limit investment on land (for mulberry farming), the Kirloskars will opt for "franchisee farming".

"The land will belong to the farmer, he will put up the mulberry plantation and tend it. We will give him the technology, management and monitoring. We shall conduct research, and decide on the right practices. We will also give the farmer a ready market. He will grow mulberry under our guidance. This way, entire families of farmers will benefit, since whole families can be involved in farming and silkworm rearing activities," says Mr Kathavate.

The project is expected to benefit the weaving community too. "Today a large population of weavers is languishing for want of work and good quality silk," Mr Kathavate says. An assured supply of quality silk yarn and an assured market can revive this activity and do wonders for this community.