The local-for-local strategy of setting up a plant at Ambur in western Tamil Nadu two years ago has greatly helped the US-based OrthoLite, one of the world’s largest manufacturers of shoe insoles. The two-year-old facility helped the company to quickly supply to most of the 500-plus shoe manufacturers, including Nike, Adidas and ASICS, present between Ambur and Chennai. It earmarked for the Ambur facility an outlay of ₹100 crore, which includes a new foam factory to be set up soon, said its CFO Milton Brice.
The Ambur plant has a capacity to manufacture nearly 60 million pairs of insoles annually. This could be doubled in three years. The company imports foam from Vietnam but plans to put a facility at Ambur, he told businessline.
One of the customers’ demands was that OrthLite be situated closer to where the production facilities of shoe factories are under the local-for-local strategy thereby simplifyinga lot of the supply chain, he said.
OrthoLite makes open-cell PU foam products for the shoe industry. The product types are foam sheets; laminated foam sheets; die-cut insoles and moulded insoles. “We have 350 formulations for athletic, casual, outdoor and fashion. The Ambur facility manufactures nearly 25 per cent of these formulations,” he said. Last year, OrthoLite globally manufactured nearly 600 million pairs, he added.
On reasons for selecting Ambur, Brice said it was mainly for the talent pool, which has a long tradition of shoe making. “Our team in Ambur is world class, and this was achieved in a very short period of time. The talent pool and large number of customers in the vicinity were the two main reasons to set up the facility at Ambur,” he said.
The region is globally known for footwear craftsmanship and production. Sixty-six of OrthoLite’s 470 global brand partners produce in India and the region represents part of the strategic and intentional choice to have local factories that provide efficient and exemplary service directly to local partners, he said.
In three years, the Ambur factory will account for around 10 per cent of the company’s total production and nearly 20 per cent in five years or even in a shorter time-frame, he said. Currently, OrthoLite has production in the big shoe manufacturing countries of China, Vietnam, Indonesia and in India, Spain (where it is mostly fashion shoes) and in Brazil with a total installed capacity to manufacture 1.5 billion pairs, he added.
“Our customers like Nike, Adidas and ASICS, are all in India, and a lot of them have been increasing production in India. We have grown over the years by being able to service our brand customers. We are right there along with them on that, we tend to be their number one supplier,” he said. India is a huge market with brands like Reliance and Bata being the target customers, he added.
Brice said foam is imported from Vietnam, which is the company’s largest facility, and some specialty foams from China. Once the foam facility is set up at Ambur, the import will almost be zero except for certain speciality foam, which will be not more than 5 per cent. There are enough suppliers of chemicals in India to make the foam locally, he said. “We expect to move to other big shoe making centres of India up in the North. Technology allows us to find solutions, not only for the export market but also for the domestic market.