Economy

Thrissur tinted in gold

Pradipti Jayaram | Updated on March 12, 2018 Published on February 02, 2015

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How did the staid city in central Kerala become home to billionaire entrepreneurs? History had a role to play, reports Pradipti Jayaram

Thrissur is much like the rest of Kerala: green, with few buildings taller than three storeys and, though the traffic could get heavy on its narrow roads, life goes on at a sedate pace. But these austere surroundings have for long belied the tremendous wealth generated by the city’s gold ornaments industry, powering the State’s economy. About 70 per cent of the 1,000 kg of gold ornaments Kerala sells every day – Keralites buy the largest chunk (10-20 per cent) of the country’s gold – is crafted in Thrissur. India’s largest gold retailers are headquartered here – Kalyan Jewellers, Avatar, Alukkas (Joy, Francis and Jos), Chemmanur, and Lulu Gold. Two of the promoters – MA Yusuff Ali of Lulu and TS Kalyanaraman of Kalyan – figured in Forbes India’s 2014 list of billionaires and are among the richest Malayalees.

What turned Thrissur into an incubator of successful ‘gold’ entrepreneurs?

Burgeoning consumerism

The 101 sqkm city is dwarfed by hoardings that scale dizzying heights, each bidding to outdo the other in grandeur. Nearly all of them feature up-and-coming jewellery brands, or branches of established ones in the city.

High Road, one of Thrissur’s busiest commercial localities, bears testimony to the city’s gold craze. The rows of 500-800 sq ft shops flanking the road mostly sell gold ornaments. In their windows an array of gold jewellery glistens in the sun. For a Wednesday afternoon, business looks brisk. Couples, men and groups of women weave in and out of these stores in search of the best bargain.

The scene is similar at Shine Jewellers in Vadanappally, on the outskirts of the city and at a stone’s throw from the beach. Inside, Shanmugam, a retired bank clerk, is buying a pair of gold bangles and earrings for his week-old granddaughter. His homemaker-wife, Viju, closely examines the newly acquired wares. “We are exchanging old gold chains to buy new ornaments,” Shanmugam explains.

His wife surveys a tray of earrings, picks up a pair, and tries them on. Looking over at Shanmugam, she raises her eyebrows and chin and queries, “Okay?” He gives her an approving nod. “After having come to a gold shop, how can I leave without buying something for her?” he says with a sheepish grin.

This love for the precious metal is perplexing for Austrian medical tourists Mario Patera, a university professor, and his partner, Ulrike Gamm. They are here to undergo ayurvedic treatments. “For a country that can’t feed itself, it is rather ironic that its people buy so much gold,” Patera says. “I saw a little girl walking about on the road wearing gold anklets; in fact everybody here wears so much gold! We were quite surprised and taken aback,” adds Gamm.

Their befuddlement is understandable. The yellow love affair runs so deep that at a tea shop in Vadanappally, in place of the usual photographs of gods and goddesses or even a calendar, the wall is graced by a chart titled, Grow with Gold, which lists gold rates over the past 20 years.

At Shine Jewellers, the owner Shaju, who belongs to the traditional caste of goldsmiths called Viswakarma, and his two sons are taking stock of the day’s business. Twenty years ago, sensing the winds of change after the trade’s liberalisation, Shaju’s father had ventured into the jewellery business just as the sector was starting to flourish. It was the right decision and the business is doing well now. Shaju’s sons are his heirs apparent. While one is tentative about joining the business, the other wants to take the company international.

The latter is perhaps inspired by the rapid rise of Shine’s peers such as Joy Alukkas and Kalyan Jewellery. All three had started out together in the gold retailing business.

In 1990, three policy changes led to plentiful; supply of legal gold in the country – the repeal of the Gold Control Act (restricting the sale and holding of gold in personal possession); the grant of permission to non-resident Indians to bring in up to 5 kg (subsequently raised to 10 kg) of gold; and the introduction of provisions in the Foreign Exchange Regulation Act, 1973. These measures opened up the industry. Many family jewellers read the signals accurately and opened shops in a business that had previously seen only goldsmiths and traders rule the roost.

Survival of the fittest

The jewellery businessmen on High Road may have moved with the times, but some are still struggling. One of them is Paul Vazhapilly, who is seated with a forlorn look in his 350-odd sqft shop, Rajdhani Jewellers, with mostly bare glass showcases. As he cleans his jeweller’s loupe, with the low hum of a table fan in the background, he recounts his foray into the gold business. “I used to work as an assistant in a small jewellery shop, much like the one I am sitting in now.”

At present, Vazhapilly buys ornaments from wholesalers or small goldsmiths and sells them at his store. “Business is going fine,” he mumbles, without making much eye contact. “I am educating my son to be an engineer. Once he finds a job and settles down, I will sell this shop,” he says.

Vazhapilly is among the few whose business is suffering in the otherwise prosperous High Road neighbourhood. The Alukkas Group founder AJ Varghese, then a salesman, set up his first jewellery store here in 1960. From the 1990s his sons - who branched out to set up separate companies – branched out of Thrissur and later, beyond Kerala. Close by, on the Municipal Office Road, Kalyan Group founder TS Kalyanaraman Iyer opened his first textile shop in the 1930s. Decades later, in 1993, one of his grandsons TS Kalyanraman diversified into gold jewellery.

Vazhapilly now waits to pull down the shutters on Rajdhani Jewellers, whereas, Kalyanaraman will be travelling on his private jet to inaugurate yet another outlet of Kalyan Jewellers, the biggest success story out of Thrissur gold industry. Kalyan Jewellers’ corporate office is now in Punkunnam, about 2km from High Road. The four-storey building towers over the others in the vicinity. On the second floor sits Kalyanaraman.

When the local business was dominated by traders and goldsmiths, gold was a commodity. But as the next generation of entrepreneurs opened shops, they realised that building a brand was important. For Kalyanaraman, that involved publicising his brand’s BIS 916 hallmark and bar-coding his wares. “This move not only set us apart from others, it also made customers more knowledgeable and other jewellers followed the same route of transparency,” says the entrepreneur, who attributes his success to “God’s grace and his forefathers’ business ethics”.

The rise of the likes of Alukkas and Kalyan marks an important milestone for Thrissur’s gold industry. Its foundation, however, was set ages ago.

A king’s act

Thrissur’s rise as a gold hub came in two phases. The first traces back to the time when the city was a prominent stopover in international trade. “Thrissur was one of the first cities in India to be truly globalised. From 1 AD onwards,” says MJ Francis, Professor, Department of History, University of Kalady. Roman and Arab traders traversing the Silk Route (a network of ancient trade routes connecting Asia, Europe and Africa) used to stop at the lost port-city of Muziris in Kodungallur, now a municipality in the Thrissur district. Though the trade along this route subsequently wilted, it left behind a reserve of gold and artisanal expertise, laying the foundation for the Thrissur-style gold jewellery the city is today famous for. “The artisans here specialise in making lightweight jewellery,” says PV Jose, Chief Patron of the Jewellery Manufacturers’ Association of Kerala (JMA).

The next push for Thrissur came from its ruler. KN Francis, Professor, Department of Economics, St Thomas College, credits the erstwhile ruler of Cochin Shaktan Thampuran for transforming a fragmented cottage industry run by traditional goldsmiths into the enormous business it is now.

The story goes that during his reign in the 1800s, Thampuran, with a view to reviving the city’s trade and commerce, invited about 50 Syrian Christian families, renowned for their business acumen, from other parts of Kerala to set up businesses in Thrissur.

Aside from gold, there were businesses in teak, tiles, and furniture. While these industries have also flourished since, the gold business dominates them all. Many jewellery stores in the city are owned by families that trace their roots to those that arrived on Thampuran’s invitation. Today, however, it is not just the Syrian Christians but even Hindus and Muslims who are at the forefront of Thrissur’s booming gold industry.

Along with its gold industry, Thrissur also saw its finance sector developing. Three scheduled banks – South Indian Bank, Catholic Syrian Bank and Dhanalakshmi Bank – are headquartered here. Apart from numerous chit fund companies, one of India’s largest gold loan companies, Manappuram Finance also calls Thrissur its home. This financial backing was instrumental in creating the entrepreneurial ecosystem.

The infrastructure

Thrissur has about 700 jewellery outlets, which source products from over 3,000 manufacturing units located in suburb such as Venginissery, Chiyyaram, Koorkkanchery, Vallachira, and Perinchery.

“The sector employs roughly 50,000, of whom 10,000 are from outside the State,” says JMA’s Jose. As local companies branched out, many of the goldsmiths too migrated. The skilled artisans were also picked up by companies from other parts of the country. The shortage is now made up by bringing goldsmiths from Bengal and Bihar.

Bappan arrived from West Bengal seven years ago and currently works at a jewellery-making unit on MO Road. “I came with my brother. I earn more than what I used to back home,” says the 22-year-old, who now visits his family once in two years. But he plans to go back for good. “There is a demand for Thrissur-trained goldsmiths in West Bengal. Once I get back, I will get more money than the others. But I still need to learn more,” says Bappan.

He has learnt to speak Malayalam and is happy that his favourite jhal muri is now available here. It doesn’t matter that the muri here is not a patch on what he gets back at his village. Though more Bappans will keep coming to meet the local demand, Thrissur’s jewellers are keen to overcome the labour problem. “We plan to set up a training academy,” says Kuraippan K Erinjery, a second-generation jeweller and JMA’s President. The academy will train the next generation of workers in the sector. Here, children of goldsmiths will hone the traditional skills passed down generations and will also acquire new ones such as marketing, which will help them stay relevant.

Evolving legacy

Shreekumar will be heartened to know about JMA’s academy plans. A third-generation goldsmith, his workshop is a 40 sqft room on top of a jewellery store on High Road. There are many such units, each carved into the space between the shops. Precariously placed stairs made of wood, and seemingly designed for dwarves, lead to an attic which is further divided into three or four work sections.

In one of the four units sits Shreekumar. He is assisted by his apprentice Dinesh and wants his children to carry forward the business. But he also wants them to take up technical education and “take it to the next level, perhaps, open a store.”

Though Shreekumar could have worked for a manufacturing unit, he prefers to be his own boss. And business is good: he supplies finished gold ornaments to customers, wholesale and retail shops. “Malayalees have always loved gold and will continue to,” Shreekumar states emphatically.

But not all goldsmiths share his optimism. Close to Shreekumar’s unit and round the corner on another lane is Shankaran. A bearded, bespectacled man in his mid-50s, he is crouching over a rectangular wooden box, his makeshift table. He is patiently trying to pry open a tangle of gold wires with his set of pliers. The room feels 10 degrees warmer than the blistering heat outside.

Shankaran is also a third-generation goldsmith. He started out when he was 10 years old, under his grandfather. He makes pieces from start to finish. “Business is fine; better in silver than in gold,” he says. However, he does not want his teenage children to carry forward the family tradition. “People no longer want to buy jewellery from a goldsmith; they prefer going to retail stores.”

The stores offer more designs and a customer doesn’t have to wait for the jewellery piece to be made. In many ways, traditional goldsmiths haven’t been able to keep up with these needs. What does Shankaran feel about the new gold enterprises that have eaten into his market share? “Everybody has to earn a living,” he replies, with a Zen-like acceptance.

Few goldsmiths have been able to cope with the evolution of the industry. While some have found jobs in manufacturing units, many from the new generation have turned drivers, painters, construction workers and hotel employees. “This, aside from being a market-driven phenomenon, is also one which the goldsmiths, by indulging in extravagances without saving and displaying lack of initiative, bought upon themselves,” says KN Francis of St Thomas College.

At the same time, he also points to the ‘shrewd’ business practices of retailers who buy jewellery from goldsmiths at low cost and retail them in their shops at much higher profits under the guise of panni korvai (wastage) and panni kulli (making charges).

Despite these challenges, the industry has thrived. Erinjery, whose Everest Jewellery has an outlet on High Road, reveals the trade secret for the enduring popularity of Thrissur’s gold ornaments and goldsmiths. “If someone gets a necklace of 40 gms, we can make the same in 16 gms.”

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Published on February 02, 2015
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