K.R. Nagaraj failed his SSLC exam because he flunked typewriting. “My family could not afford the monthly fee of Rs 15 others paid to practise in an institution.” He is quick to add that in all other subjects he got “first class marks”.
For the founder of Ramraj Cotton, it has been a long and exciting journey from those trying teen years; today the Ramraj group — which is into dhotis, shirts and innerwear — has 50 per cent market share for dhotis in South India. Every day, a whopping 2.5 lakh metres of cloth is converted into Ramraj dhotis with a price range of Rs 150-500. “Of the 10,000 looms in the Coimbatore region, about 8,000 are with me, jobbing work,” he says.
Skipping the question about the group’s turnover, Nagaraj says with a smile, “You can say in two years we’ll hit the Rs 1,000-crore mark, and will come out with an IPO.”
I meet Nagaraj at his office in Chittoor, about 70 km from Coimbatore. Dressed in a white cotton shirt and dhoti — both made by his group — he comes across as a simple, god-fearing man. Hailing from an agricultural family where a pair of hands was always required on the farm, he “would go to school only when there was no work on the land. School was not so important,” he says.
A business fails
In 1976, he started working on a salary of Rs 150 at a small shop selling dhotis. Soon, he and three others started a dhoti business. But “after borrowing from my mother and others” he could raise only Rs 15,000 towards his share of Rs 25,000; the total capital was Rs 1 lakh. Another Rs 10,000 came as a loan at 24 per cent interest from one of the partners. But the business failed and he was left holding unsold dhotis. “It was 1983, I was 23 years old; and with one small table and chair in a tiny room I started Ramraj Cotton. Being the only employee, I would go from Avinashi to Tirupur every day by bus, paying 35 paise each way, to sell dhotis sourced from others.” But the monthly Rs 20 on transport being too steep a price for him, he soon bought a cycle.
By 1986 he was ready to manufacture his own dhotis. For this business venture, Canara Bank sanctioned him a grand sum of Rs 5,000 as loan. “But they charged me Rs 150 for auto fare; I got angry and said I don’t want your loan. In those days, we couldn’t go even close to the bank manager’s cabin!”
On why he chose dhotis, Nagaraj says, “In those days, Tirupur was a banian city and nobody was interested in making veshtis (dhotis). I also saw Gandhiji wearing a veshti and said why not go for it? The quality of dhotis in those days was so bad that people would carry an extra dhoti with them, because it could tear any time.”
He found that the reason for the dhoti’s poor quality was that at Rs 50, a manufacturer could make profit only by lowering quality. “This was the concept of the dhoti business then; sacrifice quality for profit.”
Nagaraj decided he would be profitable too, but by increasing the price and not sacrificing quality. He started making and selling better quality dhotis at Rs 115. In the first year, on a turnover of Rs 9 lakh he made a profit of Rs 1.14 lakh. To expand his business he converted the farm plots of his relatives into a manufacturing facility after paying them compensation. “They had land but no water, so could not farm. We are Gounders, and to maintain dignity, they could not go out and work. So this arrangement worked fine for both sides”.
Dhoti gets status
By 1990, Ramraj dhotis were available in all the southern States. Nagaraj, who prides himself on having given “status and dignity” to the dhoti, began an ad campaign to reinstate its image as an apparel of choice. “Till then, in all garment shops the dhoti would be kept in the bottom shelves… thanks to our campaign, which said men of substance and status wore dhotis, it slowly moved to the top shelf,” he says, adding, “but quality was very important in this battle.”
Yet, something was missing; it was still not worn by “respectable people. I thought despite my giving quality dhotis, society does not recognise it as a respectable mode of dressing.” So he switched over to the dhoti himself, and around 1995-97 launched an aggressive TV ad campaign which showed men of “substance and status… film stars, industrialists” dressed in dhotis and alighting from shiny cars at banks, five-star hotels and other prominent places.
But, admits Nagaraj with a grin, his own wife, children and nieces/nephews would say: ‘If you want to wear a veshti, don’t come with us.”
But he continued to “upgrade the status” of the dhoti, and through smart advertising “made the Ramraj brand a household name”. Nagaraj is convinced that advertising on walls is the best way to build your brand, and this year his group will spend a whopping Rs 4.5 crore on wall advertising!
Secure your dhoti!
He also walked the talk in making the dhoti an apparel of comfort. “Those not used to wearing the dhoti were afraid it would come off or of tripping on it, and so would wear a back belt to secure it. This could be seen through a white shirt and looked ugly.” So he now gives out white belts, which both secures the dhoti and looks neat.
In 1999, to expand his empire, he started manufacturing white cotton shirts, and these have evidently become very popular with “politicians, particularly ministers”. The price ranges from Rs 575 to Rs 5,000; “the Rs 5,000 shirts have a 240 count and are made from three-ply fabric.”
I ask if he is wearing the upper-range shirt; he smiles and replies: “No, this one cost only Rs 600, I leave those for ministers!” So, is the Rs 5,000 shirt made of non-wrinkle cotton? “Only if it wrinkles it is cotton. If it doesn’t there is some mixing; trust me, I know my cotton,” is his confident reply.
While the shirt-dhoti ratio of the group’s sales is 35:65 at present, he foresees shirts overtaking dhotis and accounting for 70 per cent of the group’s sales in a few years. In Kerala, where “the dhoti is the dress of choice” his sales are the highest; “they prefer unbleached dhotis there.”
With Tirupur, his base, being known for knit garments, Nagaraj has diversified into innerwear, as well as retail stores. “Last week, our 25th store opened in Kumbakonam; last year, our stores totalled sales worth Rs 54 crore. When we open 100 stores, we’ll cross the Rs 100-crore mark,” he adds.
‘I don’t need to cheat the Government’
Ramraj Group’s K.R. Nagaraj says that in 2000, when he had a serious sinus problem because of the dust he inhaled while marketing his dhotis in villages, he went to the ashram of Vethathiri Maharishi near Coimbatore. “I did yoga and meditation there for six days and my life changed completely. Till then I would think only about how to make more money; it was business, and more business. I had no time for family.”
But post his ashram experience, he realises the importance of peace of mind, and that “you don’t have to be so agitated about your business and money all the time… your family, ethics in business, working for society are more important.”
The result of this life-transforming experience on the industrialist was that “after that day, I started paying my income and sales tax absolutely correctly... I didn’t feel the need to dodge any taxes! After 2000, I haven’t felt the need to cheat the Government!”
He also turned into a strict vegetarian; “before that I needed non-vegetarian food for all three meals, including breakfast.” Now breakfast consists of fruits and ragi gruel, and this after an hour of yoga, 30 minutes of meditation and a brisk walk. “And once in 15 days I sleep on a mat on the ground, without a pillow, AC or even a fan. Only then I’m sure that my body is fit,” he says.
When he gifted his son-in-law a BMW and got a Merc as a return gift, he kept it for his factory. For personal use it’s a Honda Accord “in which I drive my family to a restaurant or temple, as it gives us some privacy.”
So how religious a man is he?
A moment’s silence, a broad smile and Nagaraj says: “My wife does a lot of pooja… but it’s not that I don’t believe in god. But you see, the first house, the first car, the first lakh of rupees, are important. After that it does not matter…”