How three entrepreneurs got hooked to a niche idea

How a small town got hooked to a niche idea

This is a business with hardly any competitors. Ferma Hook Tech in Sulthan Batheri in Kerala’s Wayanad district is doing a niche business. They make hooks and eyes to be fitted on bras.

Only a handful of companies are in this business around the country, said managing director Poulose Thenunkal. The enterprise started from a suggestion by a close relative who owned a bra manufacturing factory. Expensive machinery from Switzerland, worth Rs 3 crore, was imported in 1997 to start Ferma Hook Tech. The plan was to supply the company from where the suggestion came and other bra makers. Those days the hooks and eyes were in short supply. You could say it was almost a monopoly. There was a steady supply to the firm.

Ferma Hook Tech soon made a reputation for the quality of its material. They relied on quality stainless steel to make their products. There are permanent customers. At a point, the firm employed 12 workers.

Raw materials are sourced from garment hubs such as Tirupur, Erode and Surat. SS wire, brass wire, nylon-coated GI wire, cotton fabrics, interlining thread and brushed fabrics are some of the raw materials. There has never been any difficulty in sourcing them.

These days, the firm sells its products to customers inside Kerala and outside the state. Apart from bra manufacturers, firms in Tirupur and Chennai are also among customers. Sometimes customers may have to be allowed credit for up to two months. Most of the small-scale companies pay upfront though.

Though there is hardly any competition from Indian companies, Chinese manufacturers pose a threat by dumping low-cost low-quality products. It remains a mystery how Chinese manufacturers can sell cheap after paying duty.

“If you pay Rs 2 as duty per piece, can you sell it for Rs 1.5?” asks Poulose. The other directors of the company, Kuriakose, Elias and Varghese Peters, are all relatives. This firm is run like a family enterprise. The company has 10 workers at present. It does business of Rs 7 lakh a month.

The company is struggling to expand its market though. The unhealthy competition from China is hurting. The business is unique because the net profit is limited to 10 per cent. There is hardly any scope for diversification.

Turnover is not in direct proportion to the huge investment required. Customers are steady but it is hard to find new ones.

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