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A view of the Apache footwear factory at Tada, Andhra Pradesh.

R. Balaji

Chennai, Oct. 28 A metre-wide trench cuts between the multilane National Highway 5 and a four-lane road leading to the Apache Footwear India Ltd SEZ in Tada, Andhra Pradesh. Visitors have to take a detour – a bumpy 3-km ride through narrow village roads to the modern factory, where over 6,000 local workers churn out 2.6 lakh pairs of shoes every month exclusively for the multinational brand Adidas.

The trench, the bumpy ride and the broad road lying unused tell the story even before Apache’s officials do.

Mr Steve Huang, Manager, Apache Footwear India, the subsidiary of Apache Footwear of Taiwan , is concerned that it could take longer for its plans to come true. He blames infrastructure gaps - roads, water and power. These are stretched even now to meet their current levels of operations and it would take a lot more if Apache were to expand as planned.

Apache Footwear of Taiwan, one of the world’s largest sports shoes manufacturers, has invested over Rs 100 crore in putting up a factory about 80 km north of Chennai. It plans to double its investment over the next four years to expand the factory to make about 12-15 lakh pairs of shoes a month and employ over 20,000 people.

But despite infrastructure problems, Apache is committed to making this happen, Mr Huang says.

After all, the reasons why Apache came here matter – SEZ benefits, an investor-friendly State Government, good supply of labour, export facilities to help it access markets in Europe and the huge domestic market potential are all tangible benefits that helped it choose to come to Tada.

The road leading to the 313-acre SEZ within the industrial estate promoted by the AP Industrial Infrastructure Development Corporation was laid more than seven months ago but it cannot be linked to the national highway because of some “issues” between the highways authority and the Andhra Pradesh Government.

Meanwhile, each month some 80 container loads of raw materials, components and finished shoes are moved through the village roads and it is slow work. “It scares us to think of all the heavy trucks moving through the residential areas,” says Mr Huang.

Continuous power is another issue. If the factory loses 30 minutes power, 3,000 man-hours are lost. The factory has canteen facilities for its workers and over 60 expatriates live in dormitories on the premises. Yet water availability is a problem – piped water is not available. The problem will turn more acute when the factory expands.

Productivity improvement is another area that Apache is working on.

The factory now makes about 70 per cent of the output as compared with its unit in China or what Apache hoped to achieve with the existing men and machines. We should be making 3.5 lakh pairs a month, says Mr Huang. The facility will breakeven when it expands to 6 lakh pairs.

Recruits are trained for over a month and get on to the production line for another month of on-the-job training. One of the 14 production lines at the factory is dedicated to the new comers most of whom are recruited from local areas. Shoe making is a labour-intensive business. Except for a bit of embroidery or cutting patterns on automated machines, each pair of shoes has to be stitched and glued manually.

“Individually, their work is as good as the Chinese but they have to understand that if some of them absent themselves the entire production line suffers,” says Mr Huang. After every festival holiday there is a drop in attendance as workers take more days off or opt for an extended weekend. A production line that can produce 1,200 pairs a day does 1,000 pairs on a good day and sometimes it drops as low as 400-500 pairs, he says.

Also, for Apache to scale up as planned it needs to have local suppliers.

It now imports most of its requirement including the cardboard shoe boxes. India may be one of the largest exporters of shoes – but the industry is focussed on leather shoes, he points out.

According to Mr Huang, sports shoes are a different game and it would be difficult for most to meet the standards set by Adidas. Consistent quality is the key. Sometimes the leather here can be very good and sometimes not so. Apache needs a wide range of raw materials – leather, polyurethane foam, shoe upper materials, textiles, mesh fabrics, reinforcement nylon, rubber, shoe lace, eyelets… the list goes on.

More Stories on : Outlook | Leather | Infrastructure

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