The Power of I 2014

Carving a niche

Bhandari Exports makes handcrafted furniture that has customers the world over

Your warehouse can beat the one in Pawn Stars any day,” we say admiringly. But the implied compliment is lost on Nirmal Bhandari and his nephew, Mrigesh. They haven’t heard of the Las Vegas-based hit reality show that features a family of pawnbrokers and their store. Bhandari asks about the show and then promptly asks Mrigesh to make a note of the show and its timing, so they can watch it that night. 

The Gold and Silver Pawn Shop’s inventory could include just about anything under the sun, from antique cars and hot air balloons, to jewellery, sneakers and watches. Bhandari Exports’ warehouse is no less interesting — for all that it is not attached to a pawn store but to a furniture and home décor exporter, and this is only one of five warehouses the company has across Jodhpur, Rajasthan. Painted wooden cupboards, trunks, Colonial-style dressing tables, rocking horses, velvet-upholstered sofas, idols of various deities, carved wooden cot legs, lanterns, mirrors with ornate frames, hookahs, urns, figurines...

If you’re a fan of ethnic Indian decor, walking around this huge, packed warehouse is almost guaranteed to have you gasping in envy. But don’t bother reaching for your wallet — almost none of this is meant for the Indian market. Every month, about 40 to 50 containers, each with 200 to 300 pieces of furniture and handicrafts, make their way from Bhandari Exports to warehouses across Europe, the US, West Asia and South Africa, from where they find their way into stores such as Marshalls, HomeGoods and TJ Maxx in the US. Clients in India are rare and more unusual — rather than displayed in large home stores, Bhandari Exports’ products can be seen on the small screen, as part of the sets of popular TV serials such as Balika Vadhu. Last year, the family-run company earned ₹38 crore from its furniture and handicrafts business, having grown at nearly 30% over the previous year. Its target for FY14: well over ₹40 crore. 

The tourist trail

Even a couple of decades ago, Jodhpur wasn’t on the world furniture map. It was a tourist destination, and what sold here were the usual Rajasthani puppets, embroidery patches and other handicrafts. But Bhandari saw early on the potential in selling Indian handicrafts abroad. In 1982, when he was just 20, he went to Nepal to open a store in Kathmandu. He returned to India nearly eight years later and started his own business here with an investment of ₹25,000, in partnership with his three brothers. The first Bhandari Exports store opened in Jodhpur in 1990, but it took a while for business to pick up. “There were very few international buyers then. In the early days, we would literally chase tourists from hotels, buses and the railway station,” he recalls. 

In 1994, the government opened the first dry container port in Jodhpur and that, says Bhandari, “changed it all”. It became easier to send shipments to customers, prompting buying agents, who would earlier not venture outside Mumbai and Delhi for Indian furniture, to travel to Jodhpur to see what was available. The Bhandaris set up their first factory that year, investing ₹30 lakh from bank loans and savings. Now, they have three factories, five warehouses and 14 showrooms across Jodhpur. Export business in the city has exploded — from ₹2 crore at the end of the 1980s (of which the Bhandaris accounted for ₹12 lakh), furniture and handicraft exports from here brought in over ₹1,500 crore in FY13. It is this potential that prompted 32-year-old Mrigesh to join the family business in 2002. “I studied in the UK and could have stayed back there. But this business has a bright future,” he explains his decision. “Given the way the focus on quality has sharpened, in the next five years, Jodhpur will be a huge furniture hub globally.” In keeping with that prediction, in the past five years, the Bhandaris, too, have shifted focus from handicrafts to handmade furniture.

By design

Wood carving from Jodhpur has a long and rich history, and is known for its intricacy and craftsmanship, which explains its popularity with a global audience. “Our furniture is handcrafted and has an old-world charm that is very different from the artificial looks of Chinese factory-made furniture,” boasts Bhandari in agreement. That is not to say buyers will settle for just about anything churned out from Jodhpur’s many factories — some estimates place the number of furniture export houses in the city at close to 1,000. Bhandari has seen the growth in discerning customers over the years. “Even till the late 1990s, we could make one table design and it would sell for five years. Now, customers are much more demanding and want to see new designs constantly,” he says.

Mrigesh couldn’t agree more. At Basani, 20 km from Jodhpur city, he gives us a tour of one of the company’s factories, explaining the multiple processes involved in creating each individual piece of furniture. Pointing to a distress-finish cupboard, he says, “We first painted it pink, then washed it with chemicals so the paint wears off partially, giving it an old, vintage look.” Buyers visit the factories every six months, so the company needs to have new designs, finishes and looks ready twice a year. Even the office cabins in the factory are prototypes of cabanas popular in holiday resorts in Maldives. “We made such cabins for a resort near Mumbai some time ago,” says he.

Bhandari Exports doesn’t just make new furniture and reproductions of antique pieces. It also refurbishes old pieces, makes items from reclaimed and recycled wood and industrial parts, and home furnishings such as cushions and curtains from jute, recycled materials and traditional Indian fabrics. It employs over 200 workers, of whom nearly 100 are craftsmen; almost all the work is done by hand. “Our tables especially are in demand in European and American eateries and cafés. You can see them at the Bean Café in London,” Mrigesh says, flicking a hand at the huge wooden dining tables. He climbs on to an old snake boat, which has just arrived from Kerala. It will be refurbished and sold, most probably to a collector. “Such items sell about once in two months in international markets,” he says. For the rest, quality managers representing global buyers make regular visits to the factories, inspecting the goods and prescribing requirements from cutting of wood to finishing and packaging. After bagging the order, wood is procured or used from stock, cut, glued, nailed, sanded down and then the painting, finishing and polishing takes place. The entire process till shipping takes somewhere between 45 and 60 days. 

Mrigesh and a team of two conceive the designs in-house. He visits international furniture fairs, such as the ones at Frankfurt and Hong Kong, pores through interiors magazines and spends long hours browsing the internet for inspiration. “The Jodhpur furniture industry is undergoing a professionalising revolution. People are even hiring international designers. Cataloguing is being taken very seriously, with people spending up to ₹5 lakh on making videos of their products. This wasn’t the case a few years ago,” he says. Bhandari Exports, too, has an extensive catalogue and is in the process of making a video to showcase its portfolio to international customers. “International customers don’t find designs such as ours anywhere in the market. That is why they prefer us,” says Bhandari. Still, the competition is clearly heating up.

Staying ahead

Getting customers is the first big hurdle. The visits to furniture fairs help, but the typical fee for a stall is ₹5-7 lakh a day and the conversion time is too long, says Bhandari. “Now, we try to bring the customer to Jodhpur and see what we have to offer. All the big players have buying agents in India and we have started showcasing our products to them directly,” adds Mrigesh. Word of mouth has also helped the company immensely, feel its owners. 

“Our real competitors are companies in Vietnam and Indonesia, which are wood-rich countries and have an artistic tradition. The Chinese are losing their cost advantage since they import wood. What we make for $30, they will do for $50,” says Bhandari. But he agrees that even here, as customers become more demanding, and furniture businesses pop up all the time in Jodhpur as well as other parts of the country, margins are being squeezed. “Earlier, margins were very high, almost in the 40-50% range. Now, they are down to 10-15%,” he says, adding that is making the company pay more attention to streamlining processes and keep a closer watch on costs. 

The current slowdown hasn’t affected Bhandari Exports, although like almost every business, sales dropped in 2009 — by 25%. It recovered quickly, though, and has been growing at over 15% every year for the past four years. “By January 2014, we would have crossed last year’s sales,” says Bhandari. And this despite not adding any new buyers in FY14. “Orders from existing buyers have increased,” explains Mrigesh. And the pace is likely to stay up for the next five years, which is why the family is setting up one more factory, adjacent to the one at Basani. 

But the road ahead has its shares of bumps: raw material prices and shortages, for one. Wood is sourced from Ganganagar in Rajasthan, and Punjab and rising prices here is a constant worry. That is one reason the company has ventured into making items with old wood such as railway sleepers and reclaimed wood. It helps, of course, that the current craze for recycling means there are ready takers for such products. Also, it has become a little too easy to enter this business; theoretically, at least, anyone with about ₹50 lakh to spare can rent some land and a few buildings, get some craftsmen and kick off operations. But Bhandari points to hidden conditions. “Getting clients is all about trust. And it can take you a decade to gain that,” he says. “You also have to be unique all the time, be innovative and make sure the price is right. That is the only strategy to survive in this business.”

Then, the severe shortage of skilled and unskilled labour is pinching not just Bhandari Exports but the entire Jodhpur furniture market. Where the younger generation isn’t willing to learn the old crafts of wood-carving and making traditional furniture and artefacts, MGNREGA is taking a toll on unskilled and migrant labour. “Our labour costs are rising sharply. We already pay between ₹500 and ₹800 a day to skilled labour and half that to unskilled, which is 40% higher than the rates two years ago,” he adds.

While Bhandari believes there is no way out of this problem, one solution could be selective automation. Machines could be brought in for the big, routine work such as cutting wood. Bhandari is open to the idea, but with reservations. “The handmade character of the products can’t be compromised,” he says. That makes sense. After all, that’s what has Western customers queuing up at the company with their letters of credit ready.