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Case study 4: Sree Santhosh Garments - Premier

Printing

1. Background

This case study has been developed on the basis

of the SUSBIZ India programme running from

2007 to 2009 (www.susbizindia.org). The case

studies were finalised in May 2009.

Shree Santhosh Garments (SSG) is a leading

knitted garment supplier based out of the

knitwear cluster, Tiruppur in the state of Tamil

Nadu. SSG is one of the largest Indian companies

participating in the SUSBIZ project and has an

annual turnover of around one billion Rupees

(equalling approx. 20 mio. US$). The company has

manufacturing activities spanning the entire

stream of garment production from yarn and

fabric manufacture to dyeing and stitching units.

The management is one of the more progressive

thinking managements in the industry and some

of the units of the group are certified to the

quality management and social standards

ISO9001 and SA8000. The Company’s state of the

art dyeing plant is certified to ISO 14001 and has a

full fledged effluent treatment plant built to

international specification. Hence, CSR standards

were already high at SSG at the beginning of the

SUSBIZ project.

However, at the printing unit Premier Printing -

with whom SSG was working closely - room for

improvement was very apparent. Premier Printing

primarily produces for SSG and employs around

100 people. Premier Printing has capacity to

print about 2000 t-shirts per shift. During the

peak season there is an increase of 25% in the

work force by hiring contract employees.

Production processes

At Premier Printing all activities required for

printing are carried out in-house, right from

preparing the screen used for printing to

cleaning and reusing the frames used for

printing. Based on designs received from

customers, necessary screens are prepared

and used for printing on garments as

required. Bulk production is started after

samples are approved by the customer. Once

the necessary quantities have been printed,

the screens are washed and reused for the

next design. In cases where the screen cannot

Effluent treatment plant at the dying unit, of SSG

certified to the environmental standard ISO14001.

Effluent water before and after treatment shown in the

upper left corner.

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be cleaned and re-used only the frame is re-used.

2. Challenges Identified During Needs

Assessments

Health & safety was identified as an area with the

greatest potential for improvement. It was seen

that company employees were handling paint and

paint wastes without the necessary precautions.

In the screen preparation area, chemical cleaning

of screens and exposing were being carried out

without any concern for health & safety of the

operators. Chemical cleaning was being done in

the open without the use of masks. The exposing

of screens was being done in a room with no

ventilation. The constant exposure to the

chemicals implied a significant health risk to the

operators and workers in the room.

When a specific type of printing was done,

compressed air was used to clean the garment,

which generated fine dust to which workers were

exposed. Apart from this it was also seen that the

drying machines used to dry the garment after

printing made the production area very hot.

Fire extinguishers were not maintained; first aid

boxes were empty and in some cases poorly

equipped or empty. Signage related to emergency

exits etc. was also not sufficient.

Working hours and remuneration also held a large

potential for improvement. It was seen that there

was no record of the actual hours worked in the

factory. Though it was agreed that overtime was

an issue, there was no data to indicate how many

hours were worked beyond normal hours. Linked

to this, indications were that remuneration paid

to the workers was not proportionate to the

hours worked, especially with regard to overtime.

There was no clear data available if legally

mandated wage were being paid taking into

consideration the double payment for overtime as

required by law. There was reluctance to

record the hours worked and specifically take

actions to minimise the overtime. It was felt

that tracking the overtime hours would not be

useful as the workforce demanded overtime

as a way of making more money and it was

indicated that this was the trend in Tiruppur.

Another problem existed in the fact, that a

large part of the workers were employed

through contractors and the legal

requirements with regard to contract labour

were not being followed. For instance

procedures for ensuring payments of

minimum wages, enrolment under Employee

State Insurance and Provident Fund were not

established.

Waste management also held a huge scope

for improvement. The unit generated waste

water containing paint from the screen

washing activities, paint sludge from the used

paint, waste paint etc. The company did not

have the necessary permissions from the

Tamil Nadu state pollution control board for

establishing and operating such a unit.

Environmentally unfriendly disposal

methodologies were being followed for waste

water disposal. Untreated waste water was

collected in a tank within the unit and

pumped out into a pit in a field behind the

factory once the tank was full.

3. Action Plan Implementation

At the time of inclusion into the SUSBIZ

project, the company had not been exposed

to any CSR initiatives and was not sure of the

benefits of participating in the project. With

pressure to comply with requirements from

SSG, however, actions were taken. Initially,

though, management was reluctant to take

actions on several critical fronts.

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3.1 Labour standards

The hours worked, the wages paid and the

amount of overtime worked are now being

recorded. During the period of time where

overtime work has been recorded, it has

decreased. This can partly be ascribed to the fact

that management has become more aware of the

existing overtime hours as well as expenses

related to paying overtime premium. Human

resource management polices and procedures

related to recruitment, labour management and

disciplinary actions have also been developed and

implementation is in progress.

Progress has also been made on covering

employees under the employee state insurance

(ESI) scheme and Provident Fund (PF). Enrolment

under ESI and PF involves a share paid by the

worker and a share paid by the employing

company. Since workers were reluctant to pay

their share, awareness programs of the benefits

of enrolment under ESI and PF have been run.

More workers now see the benefits of theses

schemes and all regular employees are now

covered. Progress has also been made with regard

to contract labour on these issues, but full

compliance with legislation governing contract

labour is yet to be reached.

The rights to freedom of association and

collective bargaining are also being addressed by

forming a workers welfare committee, where

worker representatives get a forum for raising

issues of relevance.

3.2. Occupational Health and Safety

At the beginning of implementation of the

action plan, the company was encouraged to

review the health & safety situation with a

focus on improvements that would impact

productivity, efficiency and reduce risks of

accidents.

Staff has now been given training on first aid

and fire fighting, and fire extinguishers have

been installed. First aid boxes are now

sufficiently equipped. A Monthly visit by a

mobile clinic to check up on workers health

has been arranged with a nearby hospital at

an expense of Rs. 20.000 All employees have

now been subjected to medical examination.

This implies a huge improvement in workers

health management.

Sign at Premier Printing stating the company’s attitude

towards child labour.

Policies on working hours, lunch breaks and holidays

explicated on signs at Premier Printing.

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The layout of the factory has been reorganized

and ventilation was provided in the hottest areas

to improve air circulation. As a first step, basic

ventilation was also provided in the exposing

room to ensure that fumes did not remain in the

room and affect people working there. Employees

were encouraged to use personal protective

equipment (PPE) provided when handling various

paints, however some reluctance towards use of

PPE still exists among the workers.

Another area where Premier Printing has set

its sights on is on awareness raising. Some

training has been done in collaboration with

NGO’s and the focus has been on HIV/AIDS,

blood donation and usage of PPE. Linked to

some of the training, doctors have come to

the factory and the workers have been given

blood donations.

Signage with regard to emergency exits and

other issues is another area where Premier

Printing has improved.

“The two-day workshop on PPE helped us to know

what are the consequences of not using it. Now we

have provided PPE in all units, not only Premier

Printing. But not all use it. They think it’s very hot and

uncomfortable to use. We have shown them

presentations on what will happen if they don’t use it.

But some of them don’t care”

Vinoth Kumar

Executive Director

Shree Santosh Garments

Now, working areas is kept clean and free of material

not in use.

Before, the working areas were congested and

haphazard.

Ventilation established at Premier Printing improving

temperature and air quality.

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Overall, with regard to occupational health and

safety there has been a huge improvement in

terms of the general cleanliness and order in the

factory.

3.3. Environmental Improvements

Discussions were held with management on the

need to follow appropriate disposal

methodologies that are environmentally friendly

and also meet pollution control board

requirements. Actions on this front have not

been initiated, as management has indicated

that they wanted to shift the activities to

another location where the factory will be

built, keeping in mind compliance

requirements. The date of shifting, however,

has been postponed time after time. At the

time of the evaluation visits in March 2009,

indications were that SSG wanted to build

their own printing unit within 6-9 months.

Since Premier Printing has its facility on

rented premises - for the time being -

management has been reluctant to invest

large amounts to change the physical layout

of the factory.

4. Business improvements

The initiatives taken at Premier Printing have

helped SSG in their relations with buyers.

Management has experienced that new or

potential customers are showing an

increasing interest in CSR related issues

before placing their orders.

According to the estimates by management,

attrition rates have decreased by at least 10

%. Thus, time and resources are saved on

training of new staff.

The numbers of sick days were not recorded

at the time of the needs assessment.

Therefore, the effect on sick days cannot be

quantified. However, improved conditions can

have a positive effect. Because of the

improvements workers are now not

Signage and equipment related to fire safety has improved

at Premier Printing.

Selected employees have been trained in first aid

techniques and wear arm tags for quick identification in

case of emergency

“New customers are asking for CSR. When we explain

them about SUSBIZ they are very interested and it

helps us in our engagement with them”

Vinoth Kumar

Executive Director

Shree Santosh Garments

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continually exposed to organic solvents and other

harmful substances. This holds the potential for

decreasing the amount of sick days and improving

quality as well as efficiency, as efficient workflows

and concentration is improved in a healthy and

orderly working environment.

Risk of accidents has also decreased as a safety

management system is now in place and fire

precautions are taken.

5. Future Activities and Challenges

Implementation of the action plan has worked to

some extent at Premier Printing. Still steps need

to be taken. With regards to personal protective

equipment (PPE) there is a long way to go as the

attitude of the workforce has to undergo a

change. Management has been determined on

confronting this issue and training has been

conducted. Some effects have been observed and

the company hopes to further change the attitude

of the workforce by continual training.

Management also recognizes that actions can be

taken further and to facilitate this, a HR

consultant has been brought in. On the health &

safety front it was seen that though material

safety data sheets have been obtained, these are

in English and need to be translated to local

language. A hazard analysis is also planned to

ensure that hazards and associated risks are

identified and appropriate steps are taken.

Improvements are also required on managing

and controlling working hours to ensure that

legally mandated limits are adhered to –

especially for contract workers. Payment for

overtime should be made at double the

normal rates as required by law for all

employees – contract and regular.

On the policy and procedure front, actions

need to move to implementation from the

current policy definition/formulation aspect.

Though many procedures have been defined,

these are not fully implemented and the

workforce is also not aware of these. For

instance employees do not have written

employment contracts though management

has indicated that policies to this effect have

been put in place. Constant vigilance is

required to ensure that any activities carried

out in the factory do not negatively impact

the employees. A holistic approach to

managing activities in the printing unit is

required so that focus shifts from just

meeting requirements to continued

compliance to best practice enabling Premier

Printing to leverage the benefits of the

actions taken.

Premier Printing Improvements at a Glance

- Overtime hours and wages are now being recorded

- All regular workers have been covered by ESI and PF

- workers welfare and first aid committees have been

established

- Appropriately stocked first aid boxes are available

- Fire extinguishers has been installed

- Training has been conducted in first aid and fire fighting

- Training on the use and relevance of personal

protective equipment is conducted on a continual basis

- Ventilation and lighting have improved

- Monthly visit by mobile clinic to factory has been

arranged by paying Rs 20000 to a local hospital

- HIV/AIDS training has been provided.

Business improvements

- Attrition rates dropped by 10 %

- Improved potential of engaging with new buyers

- Risks of fire and other accidents decreased

- Healthier workforce holds a potential for improved

quality and efficiency

“There are a lot of overlaps between the SUSBIZ

Action plan and demands from buyers. So it has

helped us in passing audits from for example Adidas

and Puma”

Vinoth Kumar

Executive Director

Shree Santosh Garments

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Waste management is also still an area of critical

concern, as waste water is still being discarded in

a pit in the field behind the factory.

Text & Photo

Claus Aabling (Danish Federation of Small

and Medium-Sized Enterprises)

Line Bech (Danish Federation of Small and

Medium-Sized Enterprises)

Pranjal Goswami (SUSBIZ India)

Henning Høy Nygaard (Danish Federation of

Small and Medium-Sized Enterprises)

Raghu RV (Versatilist Consulting India, Pvt.

Ltd.)