DIAGNOSTIC STUDY REPORT

ON
CHIRALA HANDLOOM CLUSTER
ANDHRA PRADESH, INDIA.

SUBMITTED BY
THE A.P.S.H.W.C.S.Ltd., NARAYANAGUDA, H.No. 3-7-770,
APCO BHAVAN, HYDERABAD, 500 029.
ANDHRAPARESH, INDIA.

SUBMIITED TO
DEVELOPMENT COMMISSIONER FOR HANDLOOMS,
MINISTRY OF TEXTILES,
GOVERNMENT OF INDIA,
DELHI.

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 INDEX

Table of contents

No Chapter Name Page No

1 Executive summary 1 to 3
2 Industrial scenario 4 to 7
3 Geographical Boundary 8
4 Historical Evolution 9 to 10
5 Description of the cluster 11 to 19
6 Sketch of MSMES & other actors 20
7 Description of Support Institutions 21 to 22
8 Analysis of Business Operations 23 to 26

9 Diagnosis of Cluster and analysis of common problem 27 to 28

10 Value Chain Analysis 29 to 31
11 SWOT analysis 32 to 34
12 Vision of the cluster 35
13 Formation of Strategy and Action plan 36
14 Format of 1st year activity of action plan 37 to 45
Annexure
1 Cluster Map post intervention
2 V.C.A post intervention
3 Institutional matrix (pre & post)
4 Name & Address of weavers
5 Photographs

1. EXECUTIVE SUMMARY

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 The handloom industry is providing largest employment after the agriculture. It
is one of the largest economic activities providing direct employment to over 65 lakhs persons
engaged in weaving. This sector contributes nearly 19% of the total production of the cloth
produced in the country and also adds substantially to the export earnings. The structure of the
handloom industry shows, Micro and small enterprises (MSEs) and small and medium enterprises
(SMEs). In the face of growing competitiveness in the textile both in the national and
international markets and the free trade opportunities emerging in the post MFA environment, a
growing need has been felt for adopting a focused yet flexible and holistic approach in sector to
facilitate handloom weavers to meet the challenges of a globalized environment. The Ministry of
Textile, Government of India has launched a handloom cluster based notional programme for
capacity building and self sustainability of weavers at 20 identified handloom clusters in the
country and implementing as Integrated Handloom Cluster Development Scheme in 13 states,
the Chirala is one of the identified cluster in Andhra Pradesh state.

The main objectives of the scheme are as follows:

To empower handloom weavers and build their capacity to meet the challenges of the market
and global competition in a sustainable and self reliant manner.
To facilitate collectivization of handloom weavers and service providers for procurement,
production, marketing and other support activities to promote sustainable growth and
diversification.
To provide for common infrastructure and activities in a viable format in the cluster.
To provide for development of handloom cluster in an inclusive and holistic manner in an
environment of empowered and participative decision making.
To encourage convergence of schematic assistance and support services from various schemes
and programmes of various government and other agencies in the cluster to optimize resource
utilization for betterment of the livelihood and quality of life of handloom weavers.

The Chirala cluster is known as mini Mubai of its textile market. And it is located
in Prakasam district of Andhra Pradesh state. And it is well connected to the Railways and
National highways. And also cluster is about 300 km far from Chennai for export market. In this
cluster there are 60000 weaver population and twenty to twenty five thousands weavers are
working on 18000 handlooms. In Chirala cluster almost all (98%) weavers belongs to weavers
community of padmasali, devanga, pattusali and remaining 2% may be the other community.
The weavers in Chirala cluster classified as independent weavers, kooly weavers, shed weavers
and master weavers. There are about 500 to 600 master weavers, about 15 yarn traders, 25 to
30 dyeing units, 50 to 70 hand work designers, 6 computerized design and card makers in
Chirala cluster.

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Independent weavers: These weavers are having the loom by their own and buy the yarn
themselves and produces according to the needs of market and sells to the master weavers or
traders.

Kooly weavers: These weavers also having their own loom, do the weaving for the master
weavers (shavukaru) and weavers co-operative societies and receives the wages for the cloth
produced by them.

Shed weavers: These weavers also do the weaving for the master weavers alone and receives
wages for the cloth produced by them. These weavers do not have their own loom and
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residential house as they have come from other places of the same district and other districts of
Andhra Pradesh.

Master weavers (shavukaru): Generally these weavers do the weaving themselves and
provide work to other weavers. These weavers are when financially rich and they do not do the
weaving and providing work to the weavers and market the products produced by them directly
to the consumers and also to the traders of local and in other districts of the state or abroad.

Weavers Co-operative societies: There are about 13 societies are in the cluster, out of these
12 are working. Under these societies there are 4800 looms have been registered, but at present
850 looms only active. The remaining looms are working for the private sector (master weavers).
The co-operative societies are marketing their products through APEX society (APCO), fairs and
exhibitions.

Products: The main products of these area are sarees, dress materials, RMHK, lungies,
shirtings, handkerchiefs etc.,

Generally the products in this area are very fast moving and they are making an
annual turn over of Rs. 100 to 120 crores. There are about Rs. 10 to 12 crores of stocks (RMHK)
being exported from Chennai exporters / agents.. Some of stocks stagnated at weavers co-
operative societies due to the stocks have been produced with defective and inferior in quality.
The co-operative societies are making of an annual turn over of Rs. 3 to 4 crores.. Average
income of these weavers are Rs. 50 to 60 per day. But there are some of the aged and unskilled
weavers earns only Rs. 30 to 40. But the shed weavers (migrated weavers) about 1800, who
came from other places neither they do not have loom nor the residential house. The situation of
these migrated weavers are very miserable and also they do not get skilled variety for work for
earning higher wages because they do not have there own loom. The State Government has
proposed a work-shed-cum housing scheme for 1000 shed weavers.
Methodology of data collected

The data for the study has been collected from both primary and secondary
sources. The primary has been collected through field research and with intensive interaction
with 126 stake holders of the Chirala cluster.

Structure interviews have done with the following stake holders using random sampling method.

Weavers (MSEs & SMEs)

Co-operative societies
Designers & card makers
Dyers
Business service providers
Traders
Banks
NGOs
Associations etc.

The secondary data has been collected from the handloom department, from the
old news papers, journals and research organizations which deal with the development of
handloom industry.
ANDHRA PRADESH.

Andhra Pradesh is renowned for its fine range of silk, brocade and cottons each
having a very special identity that sets it apart.

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 As a weaver s nimble fingers lovingly play over the looms, rare artistry begins to
unfold. Like a symphony composed by a skilled musician, the fabric woven has its known
exquisite harmony. In Andhra Pradesh there are over 2.75 lakh functioning handlooms in the
state and it is providing livelihood to around 5 lakh families including dyer, sizers, warp winders,
tool makers etc. The State Government has taken several steps for the overall development of
handloom industry. Some of few are.

Photo identity cards issued to handloom weavers for providing development schemes / services
directly to weavers.

Establishment of houses and work sheds to weavers.

Pensions for aged weavers.

Health insurance for the each weaver family members upto four numbers & upto Rs.15000/- per
year.

Artisan credit cards loan up to Rs.200000/-.

Special enforcement wing to look after handloom reservations.

Apparel parks for development of marketing at local and abroad.

3. Geographical boundary

The Chirala is located in prakasam district of Andhra Pradesh. The Chirala

handloom cluster is situated in two mandals of Chirala and Vetapalem. The boundaries of Chirala
cluster is Bay of Bengal at Bengal at east, Bapatla mandal at north, Parchuru mandal at west and
Chinnaganjam at south. Chirala is 50 kms far from District H.Q, Ongole and 400 kms from
State Capital Hyderabad. The town is well connected by Rail and Road and the nearest Air port
is Gannavaram (Vijayawada), which is 110 kilometers form this cluster.

There are about sixty thousand handloom weaver population at Chirala and
presently twenty to twenty five thousand weavers are active and working on about 18000
looms. All the weaver force in eleven villages of in two mandals.

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4. HISTORICAL EVOLUTION

The Chirala formally known as KSHIRAPURI ( here the sea looks as white as
milk ) is situated on Bay of Bengal is renamed as CHIRALA (CHIRA means saree ). The Chirala
town well connected to the main railway line and NH 5 road line (Kokatta to Chennai). And also
there is airline service form Gannavaram (Vijayawada) is far from 110 km. The Chirala area
handloom industry is famous since times immemorial for producing variety of fabrics which
brought name and fame to the nation as well as to this area. Even before the Industrial
revolution taken place in the west, the rural artisan weaver of this area had done marvelous work
of producing 7 yards of saree in a match box, which speaks of highest excellence in the art of
weaving, unmatched skill and talent of handloom weaver of this area.

During the 13th century the Italian traveler Marcopolo had visited this area and
his mentions about flourishment of handloom weaving and exhibition of skills of the weaver in
production of finer varieties, reveals the historic evidence about attaining the peak of excellence
in weaving skills. In 1920 a group of weavers have formed a Handloom Weavers Co-Operative
Society. During 1952 a Co-operative spinning miill has been inaugurated by Sri Javaharlal Nehru

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and runs for about 50 years. Though this area is famous for its production of traditional varieties
zari sarees and dhoties which has
limited for local market. During 1973 the exportable variety known as the Real Madras hand
Kerchiefs is being manufactured with artsilk and zari (metallic thread glittering like gold) on
jacquard looms and exported to African countries. The introduction of this exportable variety and
its popularity in the weavers of this area had not only improved the living conditions of the
weaver but also contributing in earning foreign exchange to the nation. Because of its attractive
and glittering design and texture, the cloth is attracting the consumers in foreign countries. The
Real Madras Hand Kerchiefs variety is also being manufactured in the countries like Bangladesh
and China. The quality of the fabric being produced in this area will not give any odd smell to the
cloth because of the climate and water used during the process of dyeing. Where as the cloth is
produced at Bangladesh and China is not like at this area (Chirala). This variety has run for one
and half decade and it comes down. Even now there are about 1000 looms working for this
variety and about Rs. 10 crores of stocks are being exported from Chennai. Later they have
shifted to lungies, hand kerchiefs, sarees, dress material etc. There are about some hundreds of
weavers who young and dynamic weavers are shifted to hand paint and spray paint work on
sarees from the year 1983 on wards for about fifteen years and earned about Rs.6000 to 8000
per month and from last six years the embroidery work is going on and providing some alternate
work for those who not interested to continue as weaver. These are also earning about Rs. 4000
to 6000 per month. The sarees being supplied by local traders for painting and embroidering
work. The embroidered / painted sarees are sold at local and also with in the state of other
places. And also there is cashew cottage industry which providing work for few hundreds of
women during the cashew crop season.

Generally in Chirala cluster the type loom used is fly shuttle loom and this may be equipped
additionally with barrel dobby, lattice dobby and jacquard according to the variety of the fabric
woven by the weaver. The barrel dobby is used to produce small design with 24 threads of extra
warp design on border or at desired place of the fabrics, like dhoties, sarees, shirtings and dress
material cloth. The lattice dobby is used to produce designs with 48 threads of extra warp design
on sarees and dress materials. The Jacquard is used to weave designs with extra warp or extra
weft or both depending on the fabric requirement. For the weaving of plain fabric the fly shuttle
loom alone is enough, no additional attachment like dobby or jacquard is required.

An Overview
There are about sixty thousand handloom weaver population at Chirala and presently twenty to
twenty five thousand weavers are active. These 20 to 25 thousand weavers are working on about
18000 looms. In addition there are fifteen yarn traders, 25 to 30 dyers, 6 designers and card
makers using cad system, 50 to 70 hand work designers and card makers and 50 to 100 of other
ancillary providers. The annual turn of this cluster is estimated around 100 to 120 crores. The
weavers are located in two mandals and of Prakasam district. They are Chirala and Vetapalem
mandals. All most all the weavers belongs to Padmasali, Devanga and Pattusali of weavers
community.

5. DESCRIPTION OF THE CLUSTER

There are about sixty thousand handloom weaver population at Chirala and
presently twenty to twenty five thousand weavers are active. These 20 to 25 thousand weavers
are working on about 18000 looms. The weavers are located in two mandals and of Prakasam
district. They are Chirala and Vetapalem mandals. All most all the weavers belongs to Padmasali,
Devanga and Pattusali of weavers community.

There are about thirteen weavers co-operative societies are in the cluster out
that twelve are working and providing work for 865( handlooms) weavers at present and two
hundred (handlooms) weavers are working independently. The remaining 16935 (handlooms)
weavers are depended by the master weavers. There are about 500 to 600 master weavers and
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since last two years 200 new master weavers have become the weavers. In addition there are
fifteen yarn traders, 25 to 30 dyers, 6 designers and card makers using cad system, 50 to 70
hand work designers and card makers and 100 to 150 of other ancillary providers. The annual
turn of this cluster is estimated around 100 to 120 crores.
Product Mix

The products of the Chirala cluster are sarees, dress material, Real Madras Hand Kerchiefs,
lungies, shritings, handkerchiefs etc. the estimated share of the sarees in the total value of
output is about 60% and for dress material is about 20%, the RMHK is about 10% and the
remaining all other products comes together about 10%. The Real Madras Hand Kerchiefs is
exportable product. From the cluster it is supplied to exporter located at Chennai (Madras).

The estimated share of various products are as follows:

Sarees 60%
Dress materials 20%
RMHK 10%
Lungies, shirtings, etc. 10%

Sarees are broadly categorized in to three varieties:

(i) Ordinary cotton sarees ranges from Rs.180 to 350
(ii) Seiko sarees ranges from Rs. 600 to 1500
(iii) Kuppadam (Gadwal type) sarees varies from Rs. 1400 to 2200

Market of the products

Generally the sarees of low cost will be sold in local and the medium and high cost of
sarees have the market at local and with in the state and near by states of Tamilnadu and
Karnataka. The dress material have the wide range of market i.e all over the market. The
Real Madras Hand Kerchiefs sold to the exporter at Chennai, he will get embroidered the
RMHK and exported to African countries likely Benin, Nigeria, Ghana, sierra Leone etc. The
other products lungies, shirtings, handkerchiefs etc., are marketed at local and within the
state.

Raw materials: The handloom sector needs raw material in the form of hank yarn, extra
materials like jari and silk, dyestuffs etc., The Chirala cluster required cotton yarn counts are 40s,
60s, 80s, 100s, 2/120s, 2/100s, 2/80s etc. It is known that the yarn and dyestuffs are getting
from NHDC and local yarn merchants and jari from local jari merchants.

Dyes and Chemicals:

There are twenty five to thirty dyeing unit with in the cluster area. All the dyeing
units controlled by the private persons. And the weavers, co-operative societies and master
weavers from six other district of Andhra Pradesh getting yarn dyed from Chirala cluster dyeing
units. Generally the dyers of this area are purchasing their dyestuffs and chemicals from local
market and manufactures. But due to competitions in the market the quality of the colour
fastness is poor.

Marketing:

Most of the sarees, shirtings and handkerchiefs produced in the cluster are sold
in local market and out side the market with in the state and the dress material also has been
selling in the local and out side with in the state and neighboring states of Tamilnadu and
Karnataka etc. The RMHK is being exported from the local exporter / agent of Chennai to West
African countries.

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Representational Agency

There are four to five master weavers associations and one Mutually Co-operative Aided
Society and consist 350 members and also there is one association for weavers registered
in the name of Rastra Chenetha Samakya in the year 2004. And also there is an organization
called CHIP is working research and study the problems of weavers and they are taking to
the media and publishing the books. And there are no other associations for yarn traders,
dyers, designers, card makers etc.,

Weaver force and its growth

The weavers are located in the town of Chirala and surrounding villages. The
total population of Chirala constitution is 209737, the weaver population is about 60000 and it is
believed that the weaver population growing steadily.

Gender

Weaving is male centred occupation, but the wife of the weaver also weaves
when ever the weaver take rest and go on some other work and also she help continuously for
the extra work i.e for buta work etc. Besides this the women will do the bobbin winding, pirn
winding. Such work amounts to 6% to 8% of weaving wages. Its cost included under the wage
payment received by the weaver.

Career span

A weaver do weaving till late age, depending on his eye sight and health, he is
most productive in 18 to 50 years age group. Subsequently the productivity decline.

Skill differences

At a fundamental level the skill differences across weavers are not significant.
However weavers develop an orientation based on the nature of work they do. Thus a weaver
working on a high-end product haves a significant skill.

Work Models

A weaver works either as a mere wage earner or as a producer or on a mixed

pattern. Under wage earning the weaver receives dyed yarn and return a hand woven product
made according to the design provided by CG2. As a producer he buys yarn and dyed and selects
the design and produces a product either in anticipation of demand or against a prior order.

Wage fixation and relationship

The wage fixation is generally not negotiated. A weaver weaves product as per
the sample given by the master weaver. And the weaver feels difficult and it is taking so long to
produce the weaver demand for reasonable wages. The master weaver also assess the difficulty
of the weaver and gives the wages. A weaver remains loyal to the master weaver. He does not
weave design given by one master weaver, if another master weaver asks him to weave it. The
weaver may changes his master weaver for few years due to the delayed payment of wages,
deduction from committed payment, un able to provide continuous work etc. The master weaver
often revises downward the existing wages on the market condition and the raw material cost
raises. And there are penalties also for defective work. The master weaver also gives an advance
of Rs. 2000 to 15000 to the weaver depending on the variety he weaves, early in the
relationship. If the weaver moves to the another master weaver, the advance has to pay by the
weaver or by another master weaver.
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Weaver earnings

The average earnings of the weaver will be from Rs.18000 to 24000 per
annum. And also it is observed the wages are not increasing in proportion to the increase in
essential commodities cost. 10% of the weavers earnings are Rs. 10000 to 12000, 20% of
weaver earnings are Rs.18000 to 24000, 30% of the weaver earnings are Rs.24000 to 30000 and
the remaining 40% of the weavers are 36000 to 48000 per annum. A weaver typically works on
few designs in a year. He required to spend two to three days for readjusting the loom and
related tasks for changing over from one design to another. No compensation wage is paid for
this loss work at the time design change. This will effect the weaver earnings.

Continuance in weaving occupation

The weavers continuing in this occupation, there are no other alternative

occupational opportunities, largely unskilled labour do not get better income and income security,
do to the weaver accustomed to work in home, the weavers are not willing to work at out side.

Work culture

Generally the weavers are willing to work even on holidays and long hours
except one day i.e on Amavasya / Poornima in month and other festival occurs in that month. If
the weaver works more, he will get more wages.

Weaver view

Generally the weaver blame the market, raw material prices hike and
government for his plight. And he do not feel the quality maintenance of his responsibility for the
good market.

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 IMPORTANT STATICAL INFORMATIONOF THE CLUSTER

1 No. of Weaver Population 209737

2 Total No. of weavers 60000
3 Total No. of working handlooms 18000
4 No. of weavers co-op societies 13
5 No. of societies working 12
6 Total No. of handlooms in Co-operative societies 4630
7 Total No. of handlooms working in Co-operative societies 865
8 Total No. of handlooms working in Non Co-operative fold 17135
9 No. of photo Identity cards issued under co-operative fold 4330
10 No. of photo Identity cards issued under non co-operative fold 6708
11 Total No. of photo Identity cards issued 11038
12 No. of weavers benefited under Project Package Scheme 1875
13 No. of weaver families benefited under I H V D S 100
14 No. of weavers benefited under Health Package Scheme 7256
15 No. of weavers benefited under Handloom Development Centre 850
16 No. of weavers benefited under Bunakar Bheema Yojana 2650
17 No. of Quality Dyeing units 1
18 No. of House-cum-worksheds sanctioned 2021
No. of beneficiars under Thrift Fund-cum-savings & Security
19 Scheme 150
20 No. of beneficiars under Deenadayal Hath Kargh Prostaha Yojana 300
21 No. of Artisan Credit Card Scheme - Target 1655
22 No. of Artisan Credit Card Scheme - Issued 211
23 No. of weavers benefited under IHTP 40
24 No. of weaver death cases 24
25 No. of weaver cases sanctioned 20
26 Netha Bazar (completed) 1
27 Textile (Handloom ) Park 1

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 15
The following schemes implemented in Chirala cluster is as follows.

1. Integrated handloom village development scheme:

Amount sanctioned : Rs. 24.00 lakhs

Amount released : Rs. 22.00 lakhs
Expenditure incurred : Rs. 19.42 lakhs
No. of weaver families covered : 100
Nature of benefits provided : Training, supply of looms,
construction of 100 pucca
houses, provision of electricity,
common facility centre, school
building, roads, digging of bore
wells.
2. Project Package Scheme:

Amount released : Rs. 148.275 lakhs

Expenditure incurred : Rs. 127.625 lakhs
No. of societies covered : 10
No. of weavers benefited : 1875
Nature of benefits provided : Training, supply of looms
accessories, Margin money,
Design development, work
sheds, sales centre, common
facility centre.
3. Health Package Scheme:

Amount released : Rs. 24.50 lakhs

Expenditure incurred : Rs. 22.17 lakhs
No. of camps so far : 18
No. of beneficiaries covered : 7256
Components covered : Construction of Primary Health
Centre at Ramakrishnapuram,
grounding bore wells (29),
maternity benefits (250), Eye
sight, T. B, Asthma.

4. Handloom Development Centre:

Amount released : Rs. 23.00 lakhs

Expenditure incurred : Rs. 23.00 lakhs
No. of societies covered : 4
No. of beneficiaries covered : 850

Quality dyeing unit:

Amount released : Rs. 2.00 lakhs

Expenditure incurred : Rs. 2.00 lakhs
Name of the society : Sri Venkateswara wcs,
Epuripalem.
5. Bunakar Bheema Yojana:

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 No. of weavers covered : 2650
G.S.L.I Insurance claims settled : 9 (Chirala-4, Vetapalem-9)
Amount disbursed Rs.93604.
6. Artisan Credit Card Scheme:

S.No. Name of the Bank Village Target fixed AC Cards Remarks.

Issued No.
1. S.B.I Epuripalem 180 8 -
Chirala 195 10 180 consent
Given by the
Bank.
Vetaplem 600 - -
2. Andhra Bank Perala 25 - -
Jandrapeta 75 55 -
Chirala 25 10 -
Vetapalem 55 55 -

3. Canara Bank Chirala 200 50 150 consent

Given by the
Bank.
4. Syndicate Bank Chirala 50 - 50 consent
Given by the
Bank.
5. P.G.B Pandillapalli 160 23 -
Chirala 65 - -

6. Indian Overses Bank Chirala 25 - -

Total 1655 211

7. House cum work sheds:

a) No. of units sanctioned from

1987-88 to 2003-04 under
State quaota. : 2021

b) Grounded so far : 1271

8. Thrift fund cum saving & security scheme:

No. of societies covered : 3

No. of beneficiaries : 150

9. Denadayal Hath Kargh Prostaha Yojana :

No. of societies covered : 6

Amount released : Rs. 8.95 lakhs
Expenditure incurred : Rs. 6.6 lakhs
No. of beneficiaries covered : 300

10. P M R Y:

Target fixed : 363

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Interviews are conducted to weaver beneficiaries and completed by 30.11.2004 and application
forwarded to concerned area banks.

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 11. Identity cards issued:

Co-operative fold : 4330

Out side the co-operative fold : 6708
House holds Chirala : 6292
Vetapalem : 4328
Chirala town : 1709
Total : 12329

12. Weavers death cases:

No. of cases : 24
No. of cases sanctioned for NFBS @Rs.5000/- : 20
No. of cases sanctioned IAY houses : 20

13. IHTP scheme for 2003-04:

Name of the society : Chirala wcsl ltd., Chirala

No. of beneficiaries : 20
Amount sanctioned : Rs. 3.29 lakhs
Expenditure incurred : Rs. 3.29 lakhs
Amount advanced by the society : Rs. 0.90 lakhs
Period : 2 months (14.8.04 to 14.10.04).

14. Cash Credit limit sanctioned for the year 2006-07:

No. of societies : 10
Amount sanctioned : Rs. 58.00 lakhs

15. Construction of Netha Bazar:

Out lay of the project cost : Rs. 20.00 lakhs

Amount sanctioned : Rs. 20.00 lakhs
Amount released : Rs. 20.00 lakhs
Expenditure incurred : Rs. 20.00 lakhs

The construction of the Netha Bazar has been completed and it has been inaugurated by the
Finance Minister of Andhra Pradesh and also the sales emporium has been allotted to the co-operative
societies.

16. Textile Park ( It has been converted in to Handloom Park )

Project cost : Rs. 769.63 lakhs.

State Government funds : Rs. 150.67 lakhs
Central Government funds ; Rs. 618.96 lakhs

The foundation has been laid by the Finance Minister of Andhra Pradesh on 28.8.2005 for
Handloom Park. The Commissioner for Director Handlooms and Textiles has been visited the Chirala
cluster and he conducted the stake holders meeting for the Handloom Park and discussed with them.

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 SOCIO ECONOMIC STATUS.

It is known the majority of weavers (50%) in this cluster have gone up to school
level only. But now a days their male childrens are going up to Pre graduation and graduation,
but the female childrens are below the school final only. And also the weavers of this area not
interested to continue their children in the weaving profession. And the children who are not
interested and unable to continue studies they are only entering into weaving profession. Due to
this the handlooms in this area, year by year deteriorating as the aged weavers stops the
weaving. During the year 1970 the handlooms are about 25000 to 30000, but at present the
handlooms are around 18000 only. The estimated average income of this area is up to 15 to 18
thousands per annum. And there are about 15% to 20% of weavers income is from 30 to 36
thousands per annum. But there are about 30% of weavers income is up to 8 to 12 thousands
only. It is found that around 30% of the families are below poverty line.

6. SKETCH OF THE MSMEs & OTHER CLUSTER ACTORS

The total Andhra Pradesh active handlooms are estimated about 2.75 lakhs. There are about
18000 handlooms are active Chirala cluster alone from Prakasam district of Andhra Pradesh. The
persons engaged in weaving activities part time or full time are estimated from twenty to twenty
five thousands. In Chirala weaving is a male concentrated occupation and there are some female
weavers and the aged weavers wives /widows are also weaving. Generally preparatory works like
bobbin winding piecing and pirn winding done by the females of the weaver family All most all
the weavers belongs to Padmasali, Devanga and Pattusali of weavers community.

Structure of the Cluster

The handloom sector in the cluster is broadly classified is as follows:

Independent weavers
Kooly weavers (wage payment based)
Shed weavers (wage payment based)
Master weavers (weaving themselves and work providing to other weavers)

Independent weavers: These weavers are having the loom by their own and by the yarn
themselves and produces according to the needs of market and sells to the master weavers or
traders.

Kooly weavers: These weavers also having their own loom, do the weaving for the master
weavers (shavukaru) and weavers co-operative societies and receives the wages for the cloth
produced by them.

Shed weavers: These weavers also do the weaving for the master weavers alone and receives
wages for the cloth produced by them. These weavers do not have there own loom and
residential house as they have come from other places of the same district, other districts of
Andhra Pradesh.

Master weavers (shavukaru): Generally these weavers do the weaving themselves and
provide work to other weavers. These weavers when rich and they do not do the weaving and
providing work to the weavers and market the products produced by them directly to the
consumers and also to the traders of local and in other districts of the state or abroad.

Weavers Co-operative societies: There are about 13 societies are in the cluster, out of these
12 are working. Under these societies there are 4800 looms have been registered, but at present
850 looms only active. The remaining looms are working for the private sector (master weavers).

16
The co-operative societies are marketing their products through APEX society (APCO), fairs and
exhibitions.

Raw Material Suppliers: There are 15 big yarn merchants and they not only supplying the
yarn to this cluster but also to other part of Andhra Pradesh. NHDC also situated (Vijayawada)
near cluster and supplying the raw materials and dyestuffs and chemicals to the co-operative
societies and master weavers of the cluster.

7. DISCRIPTION OF SUPPORT ORGANIZATIONS

Support structure

This consist the following

Handloom specific government agencies
Handloom weavers co-operative societies
District administrations
Financial institutions / Banks

Handloom specific government agencies

Directorate of Handloom & Textiles (DH)
Weaver Service Centre (WSC)

The D H will registers and assist co-operative societies and monitors their work.
It issues identification cards to the weaver, manages rebate, organize sale cum exhibitions,
implement the schemes of State & Central government, like Project Package, Handloom
Development Centre, Quality Dyeing units, Deena Dayal Hathkargh Prostahan Yojana, Integrated
Handloom Training Project etc. These include loom upgradation, work shed-cum-housing, design
development, skill upgradation, publicity, market development assistance, group insurance,
health package etc.

The WSC focuses on field training as well as campus training to the weavers on
designs, weaving and dyeing. And also supplies new designs of cloth and paper samples basing
on forecast of national and international fashion trends. And it issues identity cards for the
weavers who participates in national and international exhibitions and fairs.

Weavers Co-operative Societies

There are 13 handloom weavers co-operative societies in the cluster and one
society is dormant and the remaining 12 societies are working with 20% of their total capacity.
The societies making annual turn over of Rs. 3 to 4 crore during last year. The society organize
leverages on developmental and welfare schemes for the handloom sector. These co-operative
societies get their working capital from the Nabard. These societies are selling their products
through Appex scoeity, Exhibitions, fairs and sales emporiums.

District administration

Within district administration there are District Industries Centre and District
Rural Development Agency. The DRDA has not promoted any self help groups of weavers. The
Syndicate Bank of India is the lead bank. The RBI format for reporting credit target and
performance stipulates handlooms as a clear separate sector and the lead banks in most cases
follow this format. During discussions personally with bank officials, they state that the
repayment by the weavers for previous loans is very poor and so unless there is no guarantee
they are not willing to sanction the credits to the weavers. Small Industries Development Bank of
India (SIDBI) has not given any credit or promotional support to handloom sector.
17
 21
Infrastructure

This impacts productivity, quality output and profitability in a marginal way. The
main issues are housing and electricity. The houses of weavers are very congested with low light.
In many houses it is almost impossible to work without electricity. During rainy season some
houses leak and affect the work and raw material also. And also during rainy season as the
cluster is located very close to the sea the comes into the pit of the loom and interrupt the work.
There are weavers who are used to listening to tape recorded music or from the Television. The
families during last few decades grew a little.

Inter firm Industrial Organizations:

Private and Public Service providers: (1)Weavers Service Center (2)

National institute of Fashion Technology (3) Textiles Committee and others are prominent in
Private & Public Service providers. But SMEs relationship with these service providers is very
nominal. At the time of Government Schemes like PPS, HDC, IHTP Weavers Service Center
providing skill oriented services.

Ex. 1)Under Project Package Scheme there are 1875 weavers are trained from
ten co-operative societies on dobby and jacquard. But the co-operative societies are un able to
provide to these weavers continuously, as they are having poor marketing of these products. 2)
Under Integrated Handloom Training Programme 20 members are trained and 10 are working.
Another two schemes have sanctioned to be implemented. It is very much required to develop
both hardware and software linkages with these P&P service providers and SMEs for the
development of cluster.

Centers for higher education and research: There are no institutions near
by Chirala cluster and which are available at Hyderabad and Vemkatagiri are far from Chirala
about 300 to 450 km. And also most of the SMEs are not known of these institutions.

Central, State and Local bodies: (1) Ministry of Textiles and various
Departments under MOT (2) Development Commissioner for Handlooms (3) Directorate of
handlooms & Textiles, Hyderabad and Assistant Directors office at Ongole (4) DRDA (5) MRO (6)
MPO and others. As a policy to develop rural and handloom industry these Government agencies
are providing assistance under different schemes. But SMEs are not making use of these schemes
to achieve real benefit. There are several schemes are implementing by the Central & State
Governments for improve the skill of the artisans and the State Government is constructing
workshed cum house for thousand for loom and house less shed weavers of this cluster.

Entrepreneurs Groups: (1) There are 12 co-operative societies (2)The Chirala

handloom cloth producers society (3) Mac society (4) Chenetha karmika rastra committee (5)
Padmasali and Devanga sangams etc., All these groups are mainly concentrate mainly on short
time benefits and give less priority on real developmental activities such as skill development
modernization, quality maintenance etc., The details of the institutional linkage matrics will be
seen in the Annex..
22

8. ANALYSIS OF BUSINESS OPERATIONS.

Nature of production activity: There are about 18000 hand looms working in
Chirala cluster. There are 12 co-operative societies in this cluster and about 4630 handlooms
under this fold. And the remaining looms under non co-operative fold. But the production in co-
operative is very limited and the looms about 10 to 15 percentage only active. The remaining
loom under co-operative also depending on non co-operative fold. There are over 550 to 600
18
master weavers are in operation at Chirala cluster. These master weavers have an association
called Chirala handloom cloth producers society and also Mac society registered in the year 2002-
2003. These master weavers and co-operative societies will provide raw material in the form of
finished warp (ready to put on loom) and weft and other extra material depending on the variety.
There are over 100 and above varieties of products are producing in this area. The length of the
cloth can be produced 25 to 33 metres depending on the variety. To complete the weaving of
this warp 7 to 15 days will be taken depending on the variety and 2 to 3 family members
involved in this process. For the length of 33 metres cloth production the weaver get Rs.300 to
2400 as conversion charges according to the variety.

Production process

This consists of yarn boiling, dyeing and pre weaving process of winding,
warping, sizing, beaming and pirn winding and weaving based on a given design. The post
weaving operations like packing occur likely at the retail outlet level. The production time varies
depending upon the variety and design. Generally a plain cloth can be woven about 6 to 8 metres
per day, where as the saree ( 6 yards ) can be woven from 1 to 2 days. And also the saree with
heavy skill work may be woven from 2 to 4 days.

Grey yarn Market

Scouring Yarn boiled in water containing caustic soda, soda ash and
soap oil and then rinsing and squeezing.

Dyeing Dyeing with Direct dyes, napthal dyes, vat dyes and procian.
dyes and rinsing and squeezing and drying.

Dyed yarn Winding and warping.

Sizing Applying starch on the warp threads and brushing.

Weaving After piecing (attaching) the warp and this can be woven
according to the requirement.

19
 Yarn
Scouring and dyeing

Ancillary
Operations Design
Bobbin winding, warping, Creation, selection, graph-
sizing, piecing, beaming, making and card making
pirn winding

Weaving of
fabric
(saree/dress
material etc.,)

Post-weaving operations

Packing, labeling

The designers who are using cad system has under gone prescribed training at Bangalore. And
these earning Rs.80000 to 100000. And also the Weavers Service Centre produce designs and
supplies to the weavers co-operative societies and master weavers. And also the master weavers
visit all the production centers and collect the designs and produce them. And there does not
exist any mechanism for fashion forecasting and market feedback to guide the design work.

A dyeing enterprise do the dyeing of 250 kgs/day. It employs 10 persons and

they earn Rs. 15000 to 20000 per month, invest premises, equipments and assumes risk. There
are occupational health issues.

On the loom side jacquards are spreading rapidly.

Products: Traditionally Chirala area is famous for jari (pure jari) sarees and dhoties, later there
were many products produced according to the demand of the market. Particularly from 1973 on
wards the modern version of the Real Madras Handkerchief is a mutant of the traditional Andhra
telia rumal is highly prized in Nigeria as a ceremonial fabric. For weaving of the Real Madras
Hnadkerchiefs the fly shuttle loom is equipped with two jacquard machines, one for borders and
another for cross border. And also there are many products are produced, some of are (sarees)
plain border sarees, jari border sarees, jari border with jari buta sarees, sarees with rich pallu,
kuppadam sarees, tie and dye sarees called sheerapuri sarees, dress materials also from plain to
rich weft design (jacquard designs), Real Madras handkerchiefs, lungies etc., The designs used in
the sarees are birds (peacock) and floral designs. In Chirala cluster the product diversification is
taken place frequently, according to the needs of the market demand. This happened because
20
the master weavers who are providing work to the weavers will bare cost for changing the
designs and accessories. But due to unhealthy competition among the master weavers the
demanded variety is produced in huge quantity by all of them and offering less price to sell the
products and it leads produce substandard quality to reduce the product production cost.

Raw materials: The handloom sector needs raw material in the form of hank
yarn, extra materials like jari and art silk, dyestuffs etc., The Chirala cluster required cotton yarn
counts are 40s, 60s, 80s, 100s, 2/120s, 2/100s, 2/80s etc. It is known that the yarn and
dyestuffs are getting from NHDC and local yarn merchants and jari from local jari merchants.

Finance: Most of the weavers get the required raw materials from the master
weavers and also the weavers required money for their personal needs they will get from the
master weavers, later they credit the dues in installment from their wages earned by them. The
independent weavers are purchasing raw materials from their own money. Recently the
government is providing finance assistance up to Rs. 2 lakhs through artisan credit cards. For
Chirala cluster 1560 credit cards has been sanctioned for Rs. 390 lakhs. But initially the banks are
sanctioning only Rs. 30000 for each card holder later depending upon regular repayment they
extending the credit facility up to Rs. 2 lakhs. The master weavers investing their own money
and hand loan money for the purchase of raw material and for the business development.

Quality: It is understood that any product introduced, initially the product of the quality is good
and also the sales price also profitable. But due to the unhealthy competition the master weavers
are offering low price to sell their product, thus leads to poor quality, in turn to reduce production
cost. And also known that the dyes using are poor quality of fastness due to its competitions and
also to get more margins. Some times the increase in raw materials cost also leads to reduce
quality of the product as the selling price may not increase in proportionate with raw materials
cost increased.

Marketing: Once the product of the saree, lungies or dress material etc., are ready, it must find
a buyer. As the weaver produces the demanded variety, he can sell the product immediately,
other wise he has to sell the product at low price, as the weaver financially weak and the amount
spent for the product produced by him, have to get back immediately as he has to again
purchase raw materials and weave the products. This determines his economic well being. The
master weaver also spent so much amount for the production products, unless he sold the
products immediately, he can not provide continuous work to the weaver. As the most of the
weavers (90%) of Chirala cluster depended on master weavers. SMEs at Chirala dont have
specific market strategy. Generally they used to sell the materials to local master weavers only.
The merchants will by from the master weavers. The master weavers will sell the materials to
local merchants and other towns of the merchants (all other districts with in a state). About 10 to
20 percent of stocks are selling at neighbor state of Chennai city. Only one variety ie. Madras
Real Hand Kerchiefs is being supplied to the exporter located at Chennai, he will ornament and
export to West African counties, such as Benin, Nigeria, Ghana, Sierra Leone, Gambia and Liberia
from where it finds its way to surrounding countries such as Southern and Northern Cameroun,
Dahomey, Ivory Coast, Guinea, Senegal and to many places in Central Africa. In the recent past,
these fabrics have made entry into the market in Western Europe and USA with slight
modifications in the dimensions and constructional particulars of the original product. The co-
operative societies will sell their products through Apex State Society (APCO) and Handloom Fairs
and Exhibitions within and out of State. Recently the State Government constructed showrooms
at Netha Bazar and allotted to the co-operative societies to sell their products. Poor market
strategy of SMEs is the main hurdle for product diversification, modernization, as their products
are not projected / campaigned suitable. They dont have proper linkages to get information on
fashion trends. They dont have brand / labeling sytem. Price competition among these artisans /
master weavers lowered their margins.

21
 Modernization and Upgradation of skills / Equipments: The emergence of
the cluster is attributed to the deft weaving skills possessed by the weaver. The State and Central
Governments has trained the artisans to improve their technical skill in the co-operative fold
through several schemes like Project Package, Integrated Handloom Development, Handloom
Development Quality Dyeing Unit, Deena Dayal Hathkargha Prostahan Yojana and Integrated
Handloom training project Schemes. Even though efforts were made for loom modernization and
skill improvement by the business Development Service providers, it has not been benefited to all
artisans in the industry.

Infrastructure: Communication facilities are limited to telephone only. There

are private designers using the CAD for design making. The SMEs are realized the importance of
these facilities and utilization of CAD for design making, due to its fast and qualitative designs.
And also there is one private dyer using the Cabinet dyeing for bulk quantity of dyeing at a time
for one shade of colour with in a short time to do the dyeing.

DIAGNOSIS OF CLUSTER AND ANALYSIS OF COMMON PROBLEMS

Problem Analysis:

Generally weaving is the traditional occupation and the weavers in the cluster are
depended on weaving and they will not work outside work even it is available The weavers in this
cluster will work full time and also some of the weavers works the entire family in the sense,
weaver and his wife and also his father continuously for 12 to 18 hours, instead of having more
looms in the same house. The average earnings of the weaver in this cluster is Rs.50 to 70. As
the migrated weavers in this cluster neither they do not have loom nor the residential house,
they are loosing 25% of wage portion from their total wages earning to towards loom and
residence provided by the agent / master weaver. And these shed weavers do not get skilled
work for getting high wages because they do not have the own loom. The working and living
condition of the shed weaver is very miserable. The State Government has proposed a scheme to
provide work shed-cum-loom and housing for 1000 weavers out 1800 shed weavers. And also
there are 10% to 20% of weavers who are aged and unskilled are earning very low wages i.e
Rs.30 to40 per day.

1) Artisan specific.
1. Lack of cohesiveness among artisans.
2. High fluctuation in raw material cost because purchase of small quantities depending on local
traders.
3. Poor working and living conditions leads to health problems.
4. Benefit of grants and schemes by the Government limited to co-op societies and not every
one in the cluster, because the number in the co-op societies is about 30%.
5. Occupationally, Asthma and TB are commonly seen in the weaver families and also HIV /
AIDS cases number is more in the cluster, comparatively to other districts of the state.

2) Production and process specific.

1. Poor quality maintenance of product and very poor quality of dyeing.
2. Lack of product diversification.
3. Bulk production of similar varieties by most of the weavers.
4. Poor working condition of the weaver leads to less production in quality and quantity.

3) Finance specific.
1. Poor linkages with financial institutions leading to lack of enough working capital.

4) Marketing specific.
1. Inadequate attempts for value added products.
22
2. Insufficient promotion efforts for export market.
3. Non adoption of innovative designs in keeping with changing market expectations.
4. Saturated local market
5. Decline of demand for saree product.

SCEMAT: PROBLEM AREAS & ITS IMPACT TOWARDS

ACTIVITIES OF THE CLUSTER

S.No PROBLEM AREAS IMPACTS

Procurement of raw material

& inputs on higher price, non
Insufficient working capital and lack of credit availability of funds for
1 facility. technical upgraqdation.
Lack of knowledge of
consumer needs &
Non adoption of innovative designs with changing appropriate product mix as
2 market expectation per consumption.

Insufficient market promotion effort for the end Low return of income due to
3 products on export middle man interference
4 Inadequate attempt to value added products Low wages
Stagnated of stock and
5 Bulk production of limited varieties sufficient work may not have.
Bulk purchase of inputs to
benefit from quantity
6 Integration is very less among SMEs discounts

Detrimental price and differentiation based

7 competition amongst manufacturers Low margins and less wages.
Non implementation of effective management Cost of the production
8 system increase and less profits.

Absence of Private & Public partnership to

promote R & D value added production and new Lack of innovative designs
9 markets and market linkages

10. Value of chain analysis

Dyer

Scouring & dyeing with Napthal dyes.

Raw material (20 bundles (90 kgs.)) :Caustic 2.5 kgs 110.00
:Soda ash 1.0 kgs 30.00
:Soap oil 5.0 lts 45.00
:Napthal Dyes 7.0 kgs 1400.00
:Labor @Rs.25/bundle 500.00
:Fuel & electricity 200.00
23
 Total 2285.00

Cost of dyeing per bundle 114.25

The Dyer charges per bundle 130.00

The Margin per bundle 15.75

No of bundles can be dyed/day 100
No of days he works 25
Total gross income per month to the dyer =15.75x100x25 =39375
But the dyer uses his premises and engaged one person and him self looking this job.

Scouring & dyeing with Vat dyes.

Raw material (20 bundles (90 kgs.)) :Caustic 4.5 kgs 210.00
:Soda ash 1.0 kgs 30.00
:Hydrous 2.0 kgs 180.00
:Soap oil 5.0 lts 45.00
:Vat Dyes 1.8 kgs 2700.00
:Labor @Rs.30/bundle 600.00
:Fuel & electricity 300.00
Total 4065.00

Cost of dyeing per bundle 203.25

The Dyer charges per bundle 220.00

The Margin per bundle 16.75

No of bundles can be dyed/day 100
No of days he works 25
Total gross income per month to the dyer =16.75x100x25 =41875
But the dyer uses his premises and engaged one person and him self looking this job.
On average the dyer is charging per bundle of yarn dyeing =Rs.175.00

29
Dyed yarn winding to the bobbins =Rs.2.00 per knot

For warping the charges =Rs.1.00 per knot

Sizing charges =Rs.4.00 per knot

Raw yarn Dyeing Dyed yarn winding warp

Cost cost cost charges yarn
cost

Cost of 80s yarn per bundle Rs.:1300 175 1395 560 1955

Cost of 2/120s G M yarn Rs.:2600 175 2775

Cost of zari per marc (240 grams) : Rs. 200.00

24
Cost zari per gram :Rs. 0.83

80s dyed yarn cost per knot for warp :Rs. 24.43

80s dyed yarn cost per knot for weft :Rs. 17.43

2/120s G M dyed yarn per knot for weft :Rs. 46.25

The following are the costing particulars for Medium cost of saree: (Kalanjali saree)

80s warp dyed yarn (3.5 knot) @24.43 :Rs. 85.50

2/120s weft dyed yarn (3.0 knot) @46.25 :Rs.138.75
Zari 260 grams @ 0.83 :Rs.215.80
Wages @ 350.00 :Rs.350.00
Total cost per saree :Rs.790.05

Where the master weaver is selling the saree @:Rs.850.00

Where as the trader may be selling the same saree @:Rs.900.00 to 950.00

The master weaver (shavukaru) sells the products to the traders on a credit base up to
one month. The low cost sarees can be sold at local market and the costlier products are sold at local
traders and out of the district traders.

It is known that from the value of chain analysis the master weaver get 10% to 15% of
margin on production cost and the trader get margin of 15% to 20%. The weave share in retail price in
most cases 25% to 30% as wages.

Value of chain analysis for the low cost saree at Chirala cluster

Raw material of 80s yarn rate per bundle Rs.1300.00

Cost of raw yarn
Cost of 80s yarn per knot Rs.16.25
Rs.56.87+48.75+16.60 Zari rate per marc (240 grams) Rs.200.00
=122.22(warp 3.5+3.0 Cost of zari for 20 grams Rs.16.60
knots+20 grams)

Dyeing charges per bundle Rs.175.00 2.18 /knot

Dyed yarn costs Dyed cost for warp and weft yarn of 6.5 knots
Rs.136.39 =122.22+14.17(2.18x6.5) = Rs.136.39

Cost of warp and Rate of winding, warping & sizing charges Rs.7 / knot
weft Rs.160.89 Cost finished warp and weft =136.39+24.50(3.5x7)=Rs.160.89

After weaving Weaving wages per saree =Rs.83.00

Cost of saree at production =160.89+83.00 =Rs.243.39
Rs.243.39

25
 Master weaver Margin @ 10% on production =Rs.24.38
Sales price Sales price of the master weaver=243.39+24.38 =Rs.268.27
Rs.270.00 Rounded to Rs.270.00

Trader sales price Margin @ 15% on purchase price =Rs.40.00

Rs.310.00 Sales price to the trader =270.00+40.00 =Rs. 310.00

SWOT Analysis of Chirala handloom cluster:

Generally the growth of the industry known by the SWOT analysis of the industry. This will
included the financial position, skill of the person, technology, marketing linkages, integrity
among the SMEs etc., Accordingly for understanding the Chirala handloom cluster for its
development SWOT analysis is highly which is follows.
Strengths:
Finance

1. Existence of bankers.
2. Good Government support.
Marketing

1. One of the very good market name for Chirala in the Sate (called mini Mubai).
2. Few States / Countries with handloom based resource.
3.The products produced in the Chirala cluster have good market potentiality both in the
domestic and overseas market.
Production

1. Availability of skilled weavers.

2. Good raw material basis.
3. Cluster attributed to the deft weaving skills possessed by the weavers.
4. Good infrastructure facility.
5. Availability of backward and farward linkages.
6. Using CAD technology for making designs.
7. Service providers availability with in the reach.

Weakness:

Finance

1. Low profitability & margins of SMEs and which result in bankers being worry
supporting of small units. This is also in turn due to the lack of cash purchase of
inputs.
2. SMEs largely do not come together for bulk purchase of inputs as to benefit from
quantity discounts.
3. About 10 to 15 percentage of weavers are migrated to this cluster and having very
very poor financial condition.

26
Market

1. Detrimental price and non-innovation and differentiation based competition

amongst manufacturers.
2. Inadequate attempt to value added products.
3. Insufficient market promotion effort for export.
4. Production of the same variety in bulk quantity.
5. Non-adoption of innovative designs in keeping with changing market expectations.
6. Depending on Government support by co-operative societies.
7. Lack of national and international market information and knowledge.
8. Unavailability and use of internet facility for forecasting fashion trends and colour
schemes.
Product

1. Narrow product range.

2. Bulk production of limited varieties.
3. Low maintenance of quality (yarn, dyeing & weaving).
4. Dependency on limited product range.
5. Inferior quality of dyeing.
6. Less linkages with service providers.
7. The weavers undergo a lot of drudgery and suffer from low productivity because of
seasonal climatic conditions.

Opportunities:
Finance

1. Common financing to facilitate cheaper institutional finances.

2. Common finance to facilitate common facility centers and common raw material
purchase.

Market

1. Participation in trade fairs and buyers and sellers meets.

2. Common product display centre.
3. Potential buyers in untapped market.
4. Exploration of new market.
5. Scope for export market.
6. Scope for training intervention among SMEs.
7. Duty exemption on handloom garments will give scope to capture new market share
by introducing new products and ready to wear items.
8. Promotion of collective brand / supplier brand would enhance opportunities.

Production

1. Common raw material purchase to reduce costs.

2. Scope for diversification into value added products.
3. Scope for training, intervention among SMEs.
4. Brand building.
5. Product / Design patenting.

Threats:
Finance

27
 1. Bankers may not support development plans of SMEs.

Market

1. Saturated market.
2. Decline in demand of saree.
3. Competition from other clusters.
4. Increase in demand of value added products.

Production

1. Bulk production of similar varieties may occurred as the weavers demand to produce
the wages which are high.
2. Non-implementation of effective management systems to improve business
performance.
3. Absence of private and public partnership to promote R&D value added production
and new markets.

12. VISION

The Chirala cluster will establish a niche market at both

domestic and International level and with an annual turnover of Rs.
150 crore by the year 2010. With thrust on higher wage earning of
weaver, by skill up-gradation, cost reduction through common
purchase, product diversification, direct export marketing and
increase of employment through high wage earnings.

28
Value of chain analysis for the low cost saree at Chirala cluster (Pre-intervention)

Cost of raw yarn Raw material of 80s yarn rate per bundle Rs.1300.00
Rs.56.87+48.75+16. Cost of 80s yarn per knot Rs.16.25
60=122.22 (warp Zari rate per marc (240 grams) Rs.200.00
Cost of zari for 20 grams Rs.16.60
3.5+3.0 knots+20
grams)

Dyeing charges per bundle Rs.175.00 2.18 /knot

Dyed yarn costs Dyed cost for warp and weft yarn of 6.5 knots
Rs.136.39 =122.22+(2.18x6.5) = Rs.136.39

Cost of warp and Rate of winding, warping & sizing charges Rs.7 / knot
weft Rs.160.89 Cost finished warp and weft =136.39+(3.5x7)=Rs.160.89

After weaving Weaving wages per saree =Rs.83.00

Cost of saree at production =160.89+83.00 =Rs.243.39
Rs.243.39

Master weaver Margin @ 10% on production =Rs.24.38

Sales price Sales price of the master weaver=243.39+24.38 =Rs.268.27
Rs.270.00 Rounded to Rs.270.00

Trader sales price Margin @ 15% on purchase price =Rs.40.00

Rs.310.00 Sales price to the trader =270.00+40.00 =Rs. 310.00

Value of chain analysis for the low cost saree at Chirala cluster(Post-intervention)

Raw material of 80s yarn rate per bundle Rs.1220.00

Cost of raw yarn
Cost of 80s yarn per knot Rs.15.25
Rs.53.37+45.75+12.50 Zari rate per marc (240 grams) Rs.150.00
=111.62 (warp 3.5+3.0 Cost of zari for 20 grams Rs.12.50
knots+20 grams)
29
 Dyeing charges per bundle Rs.175.00 2.18 /knot
Dyed yarn costs Dyed cost for warp and weft yarn of 6.5 knots
Rs.125.79 =111.62+14.17(2.18x6.5) = Rs.125.79

Cost of warp and Rate of winding, warping & sizing charges Rs.7 / knot
weft Rs.150.29 Cost finished warp and weft
=125.79+24.50(3.5x7)=Rs.150.29

After weaving Weaving wages per saree =Rs.83.00

Cost of saree at production =150.29+100.00 =Rs.250.29
Rs.250.29

Master weaver Margin @ 10% on production =Rs.25.00

Sales price Sales price of the master weaver=250.29+25.00 =Rs.275.29
Rs.275.00 Rounded to Rs.275.00

Trader sales price Margin @ 13% on purchase price =Rs.35.00

Rs.310.00 Sales price to the trader =275.00+35.00 =Rs. 310.00

30
 INSTITUTIONAL MATRIX (PRE INTERVENTION)

DH &
SMES T APEX WSC DCH DCCB DRDA NIFT HEPC TC Mills ATIRA Fin.Int.

SMES H L L L H L N L N L N L
DH & T H M M H H L N N N M N L
APEX L M H H H M M L M M N L
WSC L M H H N N M L M N N N
DCH L H L H N L M L H L L L
DCCB M H M N N L N N N N N L
DRDA L L N N L L N N N N N L
NIFT N L M N M N N L M N L N
HEPC N N L N L N N L M L L N
TC N L L L H N N L M L M L
Mills L N L N N N N N N L L N
ATIRA N N N L L N N L N L N N
Fin.Int. L L L N N L L N N N L N

INSTITUTIONAL MATRIX (POST INTERVENTION)

SMES DH & T APEX WSC DCH DCCB DRDA NIFT HEPC TC Mills ATIRA Fin.Int.

SMES H M H M H M M M M M M M
DH & T H H H H H M L N N M N L
APEX M H H H H M M M M M M M
WSC L M H H N N M L M N N N
DCH M H M H N L M M H M L L
DCCB H H M N N L N N N N N L
DRDA M L M N L L N N N N N M
NIFT L L M L M N N L M N L N
HEPC L L M N M N N L M L L N
TC L M M M H N N L M L M L
Mills M L L N L L L N N L L N
ATIRA L L L M L N N L N M N N
Fin.Int. M L M N N M M N N N L N
Note: L=Low, M=Medium, H=High, N=Nil.
NAME & ADDRESS OF WEAVERS WITH WHOM SURVEY WAS CONDUCTED
31
 Name of the Monthly
S.No weaver Address Status earnings Age

1 B.Sankararao 1st ward, Epuripalem Shed weaver 1215 52

2 P. Narasimhulu 1st ward, Epuripalem Shed weaver 1560 41
3 N. Venkateswarlu 1st ward, Epuripalem Job weaver 2200 37
4 P. Narayana 1st ward, Epuripalem Job weaver 4000 35
5 P.Venkata Lakshmi 1st ward, Epuripalem Job weaver 1350 30
6 A. Subramanyam 1st ward, Epuripalem Job weaver 2200 44
7 A. Chitti 1st ward, Epuripalem Job weaver 1200 35
8 D, Venkatarao 1st ward, Epuripalem Master weaver 1800 52
9 D. Subbarao 1st ward, Epuripalem Job weaver 4000 43
10 D. Mohan 1st ward, Epuripalem Job weaver 4000 21
11 D. Venkateswarlu 1st ward, Epuripalem Job weaver 3200 35
12 V. Sukaveenamma 1st ward, Epuripalem Master weaver 55
2nd ward,
13 B. Srinivasa rao Epuripalem Shed weaver 5600 29
2nd ward,
14 P. Maheswara rao Epuripalem Shed weaver 6200 28
2nd ward,
15 C. Ankamma Epuripalem Shed weaver 1890 39
2nd ward,
16 P. Seethamma Epuripalem Shed weaver 1890 28
2nd ward,
17 A. Srinu Epuripalem Shed weaver 1890 36
2nd ward,
18 N. Ramesh Epuripalem Job weaver 2400 27
2nd ward,
19 A. Bepareswara rao Epuripalem Job weaver 3000 46
2nd ward,
20 A. R. Venkateswarlu Epuripalem Job weaver 4000 44
2nd ward,
21 K. Krishnaiah Epuripalem Master weaver 51
22 A. Lava Kumar 3rd ward, Epuripalem Shed weaver 1750 23
23 G. K Ramulu 3rd ward, Epuripalem Job weaver 2000 52
24 G. Padmavati 3rd ward, Epuripalem Shed weaver 1260 33
25 M. Venkatappaiah 3rd ward, Epuripalem Job weaver 1280 60
26 D. Peda Saibaba 3rd ward, Epuripalem Job weaver 1150 61
27 Bandaru Ramu 3rd ward, Epuripalem Job weaver 1800 45
Independent
28 T. Veerraju 3rd ward, Epuripalem weaver 1800 52
29 B. Sridevi 4th ward, Epuripalem Job weaver 2250 48
30 G. Ramarao 4th ward, Epuripalem Job weaver 1800 43

S.No Name of the Address Status Monthly Age

32
 weaver earnings
31 P. Nagaiah 4th ward, Epuripalem Shed weaver 1290 32
32 K. Rangaiah 4th ward, Epuripalem Job weaver 1320 54
33 Utla Devi 4th ward, Epuripalem Job weaver 2200 34
34 G. Anjaneyulu 4th ward, Epuripalem Master weaver 52
35 G.J Sankarao 6th ward, Euripalem Job weaver 3750 48
36 G. Bhagyalakshmi 6th ward, Euripalem Job weaver 1050 40
37 C. Veeranjaneyulu 6th ward, Euripalem Job weaver 3450 46
38 C. Nageswarao 6th ward, Euripalem Shed weaver 2310 34
39 G. Anjaneyulu 6th ward, Euripalem Master weaver 52
40 A.Bavaraju 7th ward, Epuripalem Job weaver 1500 56
41 K. Nagamani 7th ward, Epuripalem Job weaver 1760 25
42 G. srinivasulu 7th ward, Epuripalem Job weaver 2250 33
43 Goli Parvathi 7th ward, Epuripalem Job weaver 900 52
Independent
44 Goli Krishna kumari 7th ward, Epuripalem weaver 1650 23
45 S. Siva kumar 7th ward, Epuripalem Job weaver 4500 32
46 S. Ravi kumar 7th ward, Epuripalem Job weaver 4800 30
47 A. Venkatanarayan 7th ward, Epuripalem Job weaver 2250 50
48 A. Kanaka lakshmi 7th ward, Epuripalem Job weaver 1500 38
49 K. Suvarna Lakshmi 7th ward, Epuripalem Job weaver 1010 30
50 P. V Subramanyam 7th ward, Epuripalem Job weaver 2020 25
51 Goli subbarao 7th ward, Epuripalem Master weaver 62
52 M. Krishna Murthy 7th ward, Epuripalem Master weaver 58
53 P.G. Ramarao 9th ward, Epuripalem Job weaver 1200 60
54 Meesala Ravi 9th ward, Epuripalem Job weaver 2550 27
55 P. Adinarayan 9th ward, Epuripalem Job weaver 2800 37
56 Gundapu Babu 9th ward, Epuripalem Job weaver 3600 35
57 P. Rajababu 9th ward, Epuripalem Master weaver 52
58 C. Siva Prasad 10th ward, Epuripalem Job weaver 1280 32
59 N. Seshavatharam 10th ward, Epuripalem Job weaver 1500 60
60 P. Durga Prasad 10th ward, Epuripalem Job weaver 1500 55

Name of the Monthly

S.No weaver Address Status earnings Age
61 P. Peddda 10th ward, Epuripalem Job weaver 3600 18
33
 Yellamanda
Independent
62 P. Syamaladevi 10th ward, Epuripalem weaver 700 11
Independent
63 M. Veerabramham 10th ward, Epuripalem weaver 1800 38
64 M. Krishna Kumari 10th ward, Epuripalem Job weaver 640 30
65 B. Venkta Narsaiah 10th ward, Epuripalem Master weaver 56
66 G.M. Veeranjaneyulu 11th ward, Epuripalem Job weaver 3600 29
67 M. Srilakshmi 11th ward, Epuripalem Job weaver 1200 52
68 M.S. Narayan 11th ward, Epuripalem Job weaver 4400 34
69 U. Srirama Murthy Thotavaaaripalem Job weaver 1200 35
70 D. Hari Prasad Thotavaaaripalem Job weaver 1700 24
71 G. Venkateswarlu Thotavaaaripalem Job weaver 1700 46
72 P. Venkata Subbarao Thotavaaaripalem Job weaver 1800 28
73 A. Saibaba Thotavaaaripalem Job weaver 3300 50
74 A. Subbarao Thotavaaaripalem Job weaver 3000 50
75 A. Sai Prasad Thotavaaaripalem Job weaver 3000 43
76 M. Naga Bhushanam Thotavaaaripalem Job weaver 3400 32
77 P. Bhravaravathi Pandillaplli Job weaver 900 65
78 M.V. Subbarao Pandillaplli Job weaver 3000 44
79 S.V. Sivarao Pandillaplli Job weaver 3000 59
80 P. Subramanyam Pandillaplli Master weaver 45
81 T.R. Subramanyam Chirala pwcs 3920 38
82 T. Raghavarao Chirala pwcs 3920 48
83 V. Bharathidevi Chirala pwcs 3920 40
84 G. Koteswara rao Chirala pwcs 4520 48
85 M. Syamala devi Chirala pwcs 4520 30
86 B.V. Nagendra Desaipeta Job weaver 3600 33
87 B.V. Subbarao Desaipeta Job weaver 3800 39
88 L. Krishna murthy Desaipeta Job weaver 3600 46
89 B. Prasadarao Desaipeta Job weaver 3150 75
90 B. Sambasivarao Desaipeta Job weaver 2700 55
91 A. Kutumbarao Desaipeta Job weaver 900 63
92 S. Sambasivarao Desaipeta Master weaver 52

34