SEPTEMBER 9, 2019

LIVELIHOOD BUSINESS INCUBATION

CELL PROJECT PROPOSAL
“THE OBJECTIVE OF THIS PROJECT TO SUPPORT THE GROUP ENTREPRENEURS
BY PROVIDING THEM TRAINING, TECHNICAL SUPPORT, WORKING CAPITAL WHO
ARE ENGAGED IN THE HANDLOOM BUSINESS ”

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Table of Contents
Introduction ..................................................................................................................................... 2

Background (About Handloom) ..................................................................................................... 2

Problem Statement .......................................................................................................................... 3

Rationale for Intervention ............................................................................................................... 3

Target Households .......................................................................................................................... 4

Value Chain of Handloom .............................................................................................................. 5

Objectives ....................................................................................................................................... 5

Key Outputs .................................................................................................................................... 5

Intervention at various stages.......................................................................................................... 6

Procurement of Raw Materials ................................................................................................... 6

Training of trainers and rural people .......................................................................................... 6

Emphasis on introduction of new varieties and products ........................................................... 7

Infrastructural Development ....................................................................................................... 7

Establishment of Design Cell...................................................................................................... 7

Features of Common Facility Center .............................................................................................. 8

Role of Technical Support Person .................................................................................................. 9

Proposed marketing channels of Handloom products .................................................................. 10

Marketing Strategy........................................................................................................................ 10

Monitoring & Evaluation .............................................................................................................. 11

Product certification .................................................................................................................... 11

Budget ........................................................................................................................................... 14

Annexure ....................................................................................................................................... 15

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Introduction
Incubation is defined as a process which focuses on nurturing innovative early-stage enterprises
that have high growth potential to become competitive businesses. The business incubation process
typically provides some or all of the following:

• Shared facilities and equipment

• Business development, market access, and technology assessment services

• Financial services

• Mentoring and networking. Incubators open new entry points, which actors in the rural value
chains can use to access new markets. They afford leverage via these entry points to accelerate
rural entrepreneurial development and offer the unique potential to develop small and medium-
sized enterprises (SME’s) which can add value along these chains in ways which other
development tools do not offer.

The work of the incubation centre depends on the state of development of the particular ecosystem
and how it changes over time as the ecosystem develops and matures. In its earliest phases,
incubators demonstrate the viability of new business models and look to create and capture
additional value from primary agricultural products. In underdeveloped economies, incubators
help by strengthening and facilitating linkages between enterprises and new commercial
opportunities. They open new windows on technologies appropriate to particular enterprises and
help the enterprises discover new, potentially more competitive ways of doing business. In
subsequent phases of development, incubators operate as network facilitators: they link specialized
service providers to particular business and link separate that business to one another. Finally, in
a more advanced stage of business development, incubators operate as conduits for the exchange
of technology, products, inputs and management methods across national borders.

Background (About Handloom)

Handloom sector has emerged as the oldest and distinctive art & craft of India providing direct
and indirect employment to more than 30 lakh weavers becoming the second largest economic
activity in India only next to agriculture along with contributing 23% of cloth production in the

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country. The distinctive feature of the Orissa handloom industry is the ikat design, which finds
ancient linkages in the cross-cultural influences with the maritime activities of South East Asia.

It is one of the largest economic activities of Orissa employing more than 1.50 lakh weavers’
households with an average of 3 weavers per households. There are about 1283 weavers’
cooperative societies in the state, of which only about 602 are working societies. However hardly
about 16,823 looms are in working condition, which is also not throughout the year, out of the
81,563 looms with the societies. These Weavers Cooperative Societies exist mostly in rural areas
where there is large concentration of handloom weavers. At present there are 156 co-operatives in
the dormant conditions and 525 societies are under liquidations.

Problem Statement
Development of the rural economy has been one of the prime concerns for the Government of
India. Accordingly, efforts have been made on a continuous basis for improving the economic and
social well-being of people in rural areas on a sustainable basis. Despite the sincere efforts, the
problems of poverty, unemployment and migration still exist in the rural economy. There is a need
to address these problems by creating employment opportunities in the rural areas and this could
be done by setting up small enterprises in the handloom-based industry sector. There is ample
scope for innovation, value addition and entrepreneurship development in this sector. This is
possible only by skill up-gradation, handholding, mentoring, incubation and credit support aimed
especially at rural youth and women providing them employment opportunities at their doorstep.

Rationale for Intervention

Handloom sector has got a huge employment potential with more than thirty thousand persons
engaged in this sector to generate income in Odisha. It has created a self-employment opportunity
to the tribal/BPL families. Every 9.25 sq. mt of length of clothes which were produced generates
gainful employment of one-man year. This potential is par-excellence and no other industry
generates this kind of employment, especially in rural areas, hence, handloom is used as a tool for
rural reconstruction. Sonepur handloom industry of Orissa is famous for its IKAT and BOMKAI
design which finds ancient linkages in the cross-cultural influences with the maritime activities of
South-East Asia. Sonepur as a district has huge potential as a Handloom hub. In order to protect
the rich heritage of Orissa Handloom, there is a serious need of technological interventions and

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diversifications. The handloom industry of Orissa is different from other states. Some of the
features which highlights them are as follows:

• It is perfect blend of both tradition and modernity with inherent heritage.

• Huge range of colored products beyond spectrum.
• Exquisite design with handcrafted finish and expression of heart and soul of the weavers.
• Adorned with high sense of ethical and aesthetic qualities.
• High level of value addition by handy process.

In order to understand the complexities further a SWOT analysis was carried out to understand
how the intervention would help the rural masses.

Strength Weakness

• Availability of large work force in • Lack of product mix decisions

clusters • Outdated Looms & weaving
• Traditionally known for the techniques
products • Absence of infrastructure for Skill
• High rate of skills & innovativeness development training facilities
• Lack of design development &
product diversification
Opportunities Threat

• Existence product demand due to its • Non availability of regular funds & raw
traditionalistic. materials
• Ample scope for product mix and • Lack of initiation by supporting
diversification. organizations.
• Good export potentiality. • Large number of Middlemen and
• Value addition activities. Traders

Target Households
In Sonepur currently there are 7 PGs with 214 weavers who are working on the handloom sector.
Apart from that there are 3300 households who have been recently given Jacquard Machine out of
which 2300 Households are practicing the art. But, 1000 Households are currently not utilizing the
benefits that are provided to them in the form of Jacquard machines. So, our target would be to

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focus upon bringing new households into this sector as well as indulging the existing 1000
households who are already equipped with the Jacquard Machines and not using them

Value Chain of Handloom

Warp CAD

Yarn Dyed Yarn Processing Woven Product Packaging

Weft End Consumers Marketing

Objectives
The objectives of the project would focus on the following aspects:

• To promote development of handloom clusters in an inclusive and holistic manner through

capacity building in order to meet the challenges of the market and global competition in a
sustainable and self-reliant manner.
• To facilitate collectivization of handloom weavers and service providers to take up input
procurement, production, marketing and other support activities.
• To provide for common infrastructure and services in a viable format in the cluster.
• To provide an environment of empowered and participative decision making among
weavers.

Key Outputs
• Substantial increase in production.
• Increase the level of earnings of the handloom weavers;
• Encourage diversification in production to suit the changing market demand both at
domestic and international levels.

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 • Reduce the cost of production by way of improvement in infrastructure and augmenting
inputs supply.
• Sustenance of employment of weavers in the handloom sector thereby improving their
standard of living.

Intervention at various stages

In order to increase the income as well as providing more livelihood opportunities to the rural
masses, the interventions are required are various stages across the supply chain network. Some of
the important aspects will be discussed in this section.

Procurement of Raw Materials

The most important raw material that is used in the saree as handloom product is the silk and cotton
yarn. The current practice of Sonepur is that the threads are generally supplied to the weavers by
the traders only. In case of Silk yarn, they are supplied from Bangalore and Malda, cotton yarn
from South India’s Spinning mills. There is no other channel apart from this for procuring it. The
weavers are generally using two types of thread. One is the cotton thread and another in the silk
thread. There is absence of Common Procurement Centre from where the raw materials can be
procured. The reason behind establishment of Common Procurement Centre would ensure correct
price for the thread. The fine quality threads would be provided to all the weavers. The weavers
can procure the raw materials from the centre only at a fair price.

• Silk Yarn
Essential Raw Materials • Cotton Yarn
• Chemical Dyes

The raw material bank would be facilitated and managed by the District Coordinating Officers.
Necessary steps will be taken for the procurement of good quality raw materials at a fair &
competitive price directly from the reputed manufacturers avoiding the middlemen.

Training of trainers and rural people

The selected trainers who will be imparting training to the rural masses will first undergo training
first at some reputed institutes such as NIFT, Bhubaneswar, Hyderabad in order to start work at
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the grassroot level such that they can develop new strategy and procedure to create and implement
new designs. The training would focus on aspects such as quality control, use of eco-friendly and
azo free dyes, financial control and preparation of bar-coded swatches to enable systematic
marketing thereby increasing the efficiency of the rural masses. Training should be provided using
the safe eco-friendly dyes The training would be done on a batch of 10 people per loom machines
such that the rural people feel comfortable with learning.

Emphasis on introduction of new varieties and products

Currently the focus is only on making different varieties of saree. In order to provide more
opportunities to the rural households engaged in handloom business sector, they should be
provided with more opportunities from which they can earn income. For example, the training can
be provided in making shirts, trousers, door and window curtains, table clothes. The reasons behind
providing these training is that shirts, trousers can be stitched in a short span of time.

Apart from that the weavers can also be exposed to Computer Aided Design (CAD) to impress
upon them as how the very look of the design changes if the color changes. The exposition to the
Information Technology to the selected weavers will also go a long way in marketing them design,
colors and quality conscious.

Infrastructural Development
As discussed earlier in the CFC section, there is already a basic infrastructure which is providing
support to the weavers who are engaged in this sector. However, from the scale up point of view,
we have found that with little renovation of the building, this would provide a great support to the
new and existing weavers in the handloom sector. There are enough rooms where the training can
be provided in a batch of 10 weavers per products i.e. Shirts stitching, trousers stitching etc.

One very important aspect is that we need to establish a Godown where the final products can be
stored once they are completed.

Establishment of Design Cell

The design cell has to be established in consultation with some reputed institutes such as NIFT
which can continuously provide design and color combinations as per the fashion forecast. This
will help the rural masses to adopt the changes as per the demand. A weaving lab can also be

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established that will produce swatches of fabric as per design to facilitate the weavers to adopt the
same without much difficulty.

Features of Common Facility Center

Keeping in view coping with the competitions and having better quality of production and
management, it has been proposed to establish a Common Facility Center at a centralized &
weavers concentrated cluster area to provide services to artisans/weavers. In Bolangir, there is a
common facility centre. It should be further renovated taking into consideration the following
aspects. The CFC will have the following in house facilities.

1. Training center for weavers in modern techniques: Training section of the center will have
a minimum of 10 number of looms. Semiautomatic looms with sufficient number of Jacquard and
Dobby machines. The artisans skilled &semi-skilled will be trained in weaving with this improved
weaving equipment’s including their maintenance aspects. This section will also develop samples
etc. as required and will function as a small production unit and provide jobs to the loom less
weavers.

2. Modern dyeing & chemical processing facility: The dyeing & chemical processing unit at
one of the CFC for yarn & fabric will be eco-friendly one with a mini steam non IBR Boiler with
50 - 100 Kgs capacity with necessary dyeing, bleaching, scouring vats/equipment’s for cotton, silk
&man-made fibers. It will have other fastness-testing, color matching tools to ensure the dyeing
quality & ultrasonic energy system for reactive silk dyeing.

3. CAD Centre (Technological Aspects): The present scenario of the CAD Centre at Sonepur is
that there is just 1 Computer and 1 punching machine which is handled by the design expert. The
single machine is not enough to punch the card in case there is huge demand for the punching card.
On discussion with the design expert, in order to further scale up this business, there is requirement
of 1 additional computer and a punching machine. There is also a software which is being used in
designing the handloom product. The software itself costs 10 Lakh. So, with 2 computer and a
punching machine the work would become more easier for the designer and would save the time
also.

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 Items Present Status Proposed Status
Computer 1 2
Punching Machine 1 2
Staffs Requirement 1 3
Automatic Lacing Machine 0 1
Software Outdated Version (1) New Version (2)

The reasons behind renovating BOLANGIR as training and common facility centre is that there
are already some of the machines which are existing plus the basic infrastructure is there. So, with
a little investment on infrastructure and upgrading and bringing the new machines and technology,
this place can serve as a great place in enhancing their livelihood for the households engaged in
handloom business.

Role of Technical Support Person

The technical support persons play a very important role in providing support to the handloom
sector. In Sonepur, there are currently 3 technical support persons. One of them is involved in the
designing field like he will do the designing part as per the demand given by the traders, the next
person is involved in the use of dyes and coloring aspects like in what proportion the colors and
dyes must be added. The third technical person is involved in marketing of the products like where
the handloom products must be sold. Apart from these 3 persons, there are 7 additional persons
which are there in each Producer Group which are providing support to each of the weavers at the
time they require it. The technical support persons are taught with skills which are specific for
providing support to the households in dealing with the problems that occurs while weaving the
handloom products.

In order to further scale up this handloom business, we need additional 5 technical support person.
The reason behind selecting these 5 persons is that they would provide handholding support to
those households where the TSP are not available. Apart from that they would also facilitate in
movement of the punching card to each of the households depending upon the design which are
given to them. Another aspect was like if some problem arises in the Jacquard machine, the

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technical support person would go to that particular household and resolve the problem as he would
be taught with those skills like how to deal with such situation

Proposed marketing channels of Handloom products

Weavers Producer Group (PG) Producer Company Market

(PC)

Producer company will procure raw materials in bulk and will provide to prouder groups via
Common Procurement Centre. The producer groups will hand over the raw materials to weavers
and won completion will take the final products from them. The final product would than move to
the Producer Company where the PC will create its own brand and will market it to national and
international level.

Marketing Strategy
Generally, handlooms produced by wavers in the rural areas have a spectacular and profitable
market in urban areas. But unfortunately, the artisans have limited scope and capability to access
the market. The support provided for marketing has to be strengthened to have a greater share of
the market. Some of the common places where the handloom products can be sold will be
described in this section.

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 Exhibitions

Marketing
Buyers
through
Sellers Meet
ORMAS
Marketing of
Handoom
Produce
Tie ups with
mega
Urban haat
players such
as Reliance
Online
Marketing
via Flipkart,
Amazon

Monitoring & Evaluation

Monitoring and evaluation are an integral part of any project implementation. Besides monitoring
physical achievements other socio-economic, employment generation and environment impact
shall be taken into consideration.

A Local Advisory Committee (LAC) constituted at the district level. Its members will be
D.M./Collector Sonepur, PD, DRDA Sonepur, Deputy CEO/Jt. CEO DSMS Sonepur & one
nominated professional (Industry Expert) at a regional location.

Product certification

Handloom Mark

Handloom mark provides a collective identity to handloom products in India. The basic
objective of the Scheme is to brand our handloom products and secure a premium position
for them in Domestic as well as International market. The Scheme is promoted by

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Development Commissioner (Handlooms), Government of India and Textiles Committee
is nominated as the Implementation Agency.

The ‘Handloom Mark’ is a symbol of rich legacy and tradition of Indian Handloom
textiles. The Mark is aimed to promote the brand of handlooms and develop a niche
market for the handloom textiles with distinct identity. The Mark is also a symbol of
social cause to promote the livelihood, welfare and growth of more than 6.5 million
weavers.

Handloom Mark is the Government of India's initiative to provide a collective identity to

the handloom products in India and can be used not only for popularizing the hand-woven
products but can also serve as a guarantee for the buyer that the product being purchased
is genuinely hand woven from India. The Handloom Mark would, therefore be a hallmark
of passionate creative work that defines the product with clarity, distinguishes it from
competition and connecting it with customers.

IHB (Indian Handloom Brand)

The Handloom Mark Scheme was launched by the Government of India on June 28, 2006
to provide assurance to the consumers about authenticity of handloom products. However,
it did not cover the aspect of product quality assurance. Therefore, the India Handloom
brand is an initiative for branding of high-quality handloom products with zero defects
and zero effect on the environment. It would differentiate high quality handloom products
and help in earning trust

of customers by endorsing their quality in terms of raw materials, processing,

embellishments, weaving design and other quality parameters and by ensuring social and
environmental compliances in their production. The registration for India Handloom will

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be granted to certain specified eligible entities in respect of identified product categories
which meet prescribed quality parameters.

GI Tag (Geographical indication)

GI is a sign used on products that have a specific geographical origin & possess qualities
or reputation due to origin of its place. GI tag enables who have the rights to use the
indication to prevent its use by a third party whose product does not confirm to applicable
standard of that regional product.

Available GI tags for handloom/handicraft for Sonepur district are as follows:

• Orissa Ikat
• Bomkai saree & fabrics
• Sambalpuri bandha saree & fabrics.

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 Budget
Amounts in
Lakhs
Sr. No. Budget Head Units Y1 Y2 Y3 Total
1 IB & CB
Incorporation of PC 1.00 1.00
IB & CB 6 PGs 3.00 3.00 3.00 9.00
Profiling 0.50 0.50 0.50 1.50
Sub total 4.50 3.50 3.50 11.50

Infrastructure Development &

2
Machinery
Looms (3) 3 1.20 1.20
Automatic lacing machines 2.00 2.00
Punching machines 3.45 3.45
CAD software 1 10.00 10.00
Computer 1 0.50 0.50
Infrastructure for Yarn Bank & godown 20.00 20.00
Stitching unit 15.00 15.00
Sub-total 52.15 52.15

3 Monitoring & Evaluation

Documentation 0.15 0.15 0.15 0.45
Monitoring & Evaluation of project 2.00 2.00 2.00 6.00
Sub-total 2.15 2.15 2.15 6.45

4 Administration Expenditure
Staff salaries 9.84 10.82 11.91 32.57
Staff allowances 1.20 1.20 1.20 3.60
Furniture's 0.50 0.50
Stationary 0.02 0.02 0.02 0.06
Communication 4.00 2.00 2.00 8.00
Sub-total 15.56 14.04 15.13 44.73

5 Handloom mark & GI tag 3.00 3.00

Sub-total 3.00 3.00

6 Miscellaneous expense 5.00 5.00 5.00 15.00

7 Total 82.36 24.69 25.78 132.83

8 Cost to TSA
Training & Workshops, Market research,
8.00 4.00 4.00 16.00
Value Chain studies
Sub-total 8.00 4.00 4.00 16.00

9 Grand Total 90.36 28.69 29.78 148.83

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Annexure
Additional notes/Project Assumptions:

• There are 6 producers currently who required the IB & CB which includes incorporation
of producer company also.
• Some infrastructure is available currently to the CFC cum CAD center but still there is
need to upgrade the machinery, update the CAD software and install lacing machines
which are not available there.
• To receive more economic benefits to weavers yarn bank & stitching unit proposed in
budget.
• In administration expense the cost includes the following items:
Staff salary:

Salary per Total (per

Staff Unit month annum salary)
Procurement & Marketing manager 1 30,000 3,60,000
Accountant 1 12,000 1,44,000
Security 1 5,000 60,000
Designer (CAD- Centre) 2 15,000 1,80,000
Operator (CAD Centre) 1 5,000 60,000
Field Exe. 5 3,000 1,80,000
Total 9,84,000

• In the budget there is mention of miscellaneous expense of 5 lakhs per annum for
expense such as annual maintenance cost of software i.e. 80,000 per annum, legal cost,
repairing cost & other cost associated with the projects.

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