Dhotis are big business in Tamil Nadu. Although dhotis are woven and mill-made in the other southern states as well, they remain small in operation compared to what they are in Tamil Nadu. Dhotis have always found a market in the South. People wear it at home, at religious functions and at traditional occasions. Dhotis are also seen as a poor mans attire as one can buy dhotis for as low as R50. So one enterprising young man, who grew up in a village near Coimbatore, decided that it was time to make the dhoti a fashion garment. In fact, he has actually managed to sell the dhoti to even the fashion-conscious young men. All his products are pure white including accessories like shirts, undergarments, handkerchiefs, belts and even cell phone cases. He makes sure they all maintain high quality. From politicians to bridegrooms, everybody wears his veshtis.
KR Nagaraj, the founder of Ramraj Cotton, comes from an agricultural family and he had to work on the farm after school. When he was still in school, he saw a well-dressed man in an Ambassador car wearing a white shirt and dhoti. He found that the man owned a textile business. It made an impression on him. Nagaraj decided he could travel in a car if he entered the textile business!
Nagaraj had to work very hard to make that a reality. In 1976, he started working in a small shop, selling dhotis. Soon, he started his own dhoti business with three friends. He could raise only R15,000 towards his share of R25,000 after getting some money from family. The total capital was R1 lakh. Another R10,000 came as a loan at 24% interest from one of the partners. But the business failed and Nagaraj found himself with a whole lot of unsold dhotis. Undaunted, he decided to launch Ramraj Cottons in 1983. He was only 23 and the company was set up in Avinashi. He was a one-man show going from Avinashi to Tirupur every day to sell dhotis made by others.
When he wanted to go into manufacturing of his own dhotis soon after, it was impossible to get a bank loan. Like many entrepreneurs of Tamil Nadu, he set up his business with help from family and friends. Since then his business took off. He has not gone public. Nor has he got PE funds. Profits have been consistently ploughed back into business.
Nagaraj chose to stick to dhotis based on his conviction that quality dhotis will surely find a market. Those were the days when dhotis were low priced, use-and-throw products. Nobody thought of quality, but only profits. Nagaraj decided he would make profits by increasing the price and not sacrificing quality. He started selling better quality dhotis at R115. He decided to stick to white as he did not want to pollute the environment with colour dyes.
In the first year, on a turnover of R9 lakh, he made a profit of R1.14 lakh. His instinct that quality will create demand turned out to be correct. By 1990, Ramraj dhotis were available in all the southern states. Nagaraj started advertising quite heavily to promote the dhoti as a garment which men can wear with pride. Till then, dhotis used to be tucked away in the bottom shelves of showrooms. We made sure they were displayed prominently and given pride of place in showrooms. By 1995, Ramraj dhotis were on TV. The TV campaign started projecting men of substance as businessmen, actors and stylish youngsters flaunting the dhoti. Today, Ramraj dhotis are popular with most Tamil politicians.
From 1999, Ramraj went into the manufacture of white cotton shirts, with prices ranging from R600 to R6,000. He is also diversifying into products like readymade pure silk shirts, womens wear, linen shirts, new premium inner garments, T-shirts and kidswear. Nagaraj has also set up retail stores to sell his products. He wants to focus more and more on youth. Cricketer Ashwin Ravichandran is the brand ambassador to attract the young.
Of the 10,000 looms in the Coimbatore region, about 8,000 are with the company doing jobbing work, says Nagaraj. Ramraj Cotton employs around 6,000 people. Every day, 1.5 lakh metres of dhotis are woven and 2,500 varieties of dhotis are sold annually. Out of the 1,000 dhotis sold in the state, 700 are from Ramraj Cottons. It makes 30,000 pieces of shirts (all white) in a day. It has invested around R50 crore into its facility. At present, almost 50% of the turnover comes from Tamil Nadu. Kerala is also a large market, but the preference there is for unbleached dhotis. The dhoti business accounts for 70% of the turnover while the rest is contributed by shirts and others. Nagaraj is now entering the rest of India through the franchisee route. Will dhotis sell in the North They wear dhotis (panch) which are 4.5 to 5 metres. In the South, it varies between 2-4 metres. He is not yet ready to talk about his turnover. He drops a broad hint that it will be around R1,000 crore soon.