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<i>Perspectives</i> from our Social Enterprise Manufacturing Partner in Nepal
May 5
6 min read

Perspectives from our Social Enterprise Manufacturing Partner in Nepal

By Hannah Badminton
All photography provided by our partner

The global COVID-19 pandemic proves to be a challenging time for the fashion industry in many ways. We want to bring forth the voices of the manufacturing sector into the mainstream conversation, and in the Perspectives series, we speak to our partner factories on how they are coping with current circumstances, the need for digitalization, sustainability, and more.

About this partner

This partner is a multi-product factory and social enterprise specializing in sustainable materials. Their mission is to empower marginalized people in Nepal with fresh starts and fulfilled lives by providing a sustainable livelihood to their staff. Their product categories include activewear, toys, accessories, knitwear, and woven products. 

90% of Nepal’s total electricity generation capacity is generated by hydropower plants, which means the factory is almost completely powered by renewable energy. Almost all waste material from the factory is either re-used in production projects or collected by local scrap collectors to be re-used or used as stuffing for mattresses. Additionally, by partnering with a local waste management social enterprise, they are able to recycle 100% of their recyclable waste.

We spoke to Corban, Founder and Director of this manufacturing partner, on how they built their business on a specific purpose, their recent project involving making masks for the medical community and their experience with technology as a small business. Learn more about them on their manufacturing profile.

Could you give us a brief history of the business? Why did you start your business in Nepal?

We started in mid-2013 and initially came to Nepal because we had heard all the reports about human trafficking. My wife and I were working in India before that and we saw how that plays out across South Asia, with Nepalis going to India or being trafficked internationally to the Middle East or East Asia. We were initially encouraged to launch something in Nepal, to create jobs locally so people didn’t feel so desperate to leave. As we’ve been here we’ve realised that it’s such a broader problem. Human trafficking also involves transient labour, and people who don’t feel that they have economic hope in Nepal. 15% of Nepalese have already left the country to work overseas. What it became after the first few months of investigation here, was simply just good jobs for marginalized people. 

Was the garment industry a logical first choice or did you look into other industries first?

We looked at other options for several months to see what would be a good fit. The garment industry is where we landed because it requires a high labour input and people can be trained pretty quickly from lower education backgrounds. So we knew we needed something that was going to need a lot of manual labour, where people who maybe only got to the second grade could do. The garment industry in Nepal was not doing well at the time, and it collapsed in the early 2000s. It did not fare well through the 2006 Nepalese Revolution, but in the last five years or so it’s really picked up, especially for the domestic market.

Corban – Director, SupplyCompass Social Enterprise Manufacturing Partner

How has the industry changed since you started? From an international perspective, are more global brands interested in manufacturing in Nepal now?

There’s definitely a bigger interest in sustainability now and it is a key driver that has led us to have a lot more inquiries than we used to; 4-5 times more than they used to be 2 years ago. There seems to be a lot of interest locally as well; there are a lot of local entrepreneurs in Nepal who want to have their own brand and Nepalese startups contact us to make products for them now. That just tells me there is a better economy here than it used to be. But that’s all changed in the last month or so. I think we saw problems with global supply chains as well. In January when China shut down, we got a lot of local order inquiries, and people wanted to see if they could get items locally in Nepal when they hadn’t thought it was possible before.

How are you adapting your business in this uncertain time and what are your biggest challenges at the moment? You have been given permission from the government to produce masks but has other production completely stopped?

The west was slow to react and it was business as usual until late March. We import most of our materials from China and India, and by mid-February things were not getting delivered here. We had a lot of production downtime since we just didn’t have all the materials we needed. It’s going to be hard for us to import anything into Nepal for a while, apart from essential items. Once the lockdown opens up, we will have to see what we can do with local materials. 

Making masks has been a really good opportunity. That has kept about half of our production staff working this month. It’s been off and on as our lockdown is police-enforced and our workers are afraid of getting confronted by police on the streets. So a lot of our staff have been afraid to move around. We had to organize a van to pick up many of them. We lost most of our production this month, but a few who live nearby have been able to come to work. 

 

Kopila upcycles scrap fabric into facemasks

You have been making masks for local businesses and hospitals; how did this initiative come about? What steps are you taking to ensure worker safety?

A friend in a local hospital asked us if we could make masks because they were facing shortages, and it was one of the biggest hospitals in Nepal. I thought medical masks were disposable, that they only cost a few cents and we couldn’t compete with that. But when we realized that there was a legitimate shortage and the bigger hospitals were considering using fabric-based masks, we started looking into it.

We found that the bigger, private hospitals were working their political connections to procure disposable, medical-grade masks. The hospitals that serve the poor and most of Nepal’s population have small budgets and little power, and may have already been using fabric masks. We wanted to provide better quality, and the doctors were excited about it and asked their administrators to buy from us. It was encouraging that we could provide something useful for people and so we started to offer it at cost price since we did not want to make a profit off it. We reached out to our network in North America and asked for donations to subsidize costs as well.

Most of the organizations that have purchased from us are mission hospitals who cater specifically to the poor or associated medical charity work. One works with handicapped people and another provides temporary housing for families who come to the city for medical help. We have already provided more than 12000 masks and the mask line makes 700-800 a day of triple-layer fabric masks with a nose wire. The doctors we have given them to, have said they prefer it to other options they have.

In our new building, we have handwashing sinks and wash-on-entry rules. The van we run carries hand sanitizer and they ensure everyone wears masks. We are ensuring distancing as much as we can and our admin staff and managers mostly work from home. 

We found that the bigger, private hospitals were working their political connections to procure disposable, medical-grade masks. The hospitals that serve the poor and most of Nepal’s population have small budgets and little power and may have already been using fabric masks. We wanted to provide better quality, and the doctors were excited about it and asked their administrators to buy from us—we have already provided more than 12000 masks.
Corban
Director, SupplyCompass Social Enterprise-Manufacturing Partner

What are some of the other benefits that you offer your employees?

We have a school benefit for children of staff that includes paying for daycare or up through secondary school, that we hope to continue. We also have a savings program for employees for their retirement fund, like the US’s 401-K. We also provide lunch at the office, that helps community building and also provides needed nutrition for new employees who come from marginalized backgrounds. We have an adult learning program including paying for opportunities outside work such as primary education for themselves, and driving and swimming lessons and we have also offered life skills training in the early stages of hiring new production staff. We continue to have a profit-sharing program, where at the end of the fiscal year a percentage gets distributed among staff, and we have monthly production bonuses as well. 

We have an adult learning program including paying for opportunities outside work such as primary education for themselves and driving and swimming lessons, and we have also offered life skills training in the early stages of hiring new production staff.
Corban
Director, SupplyCompass Social Enterprise-Manufacturing Partner

What support is the government in Nepal offering at the moment?

Nepal doesn’t have the financial resources for a large rescue or stimulus plan from the government. Any formal sector companies have had to pay full salaries for the month, even if they had no work. They turned to landlords and told them they could not charge rent if they rent out to the informal sector. The government has also waived payroll taxes and social security payments. Most of their programs are geared towards the informal, at-risk sector. The government does have food distribution points and financial relief for people who qualify, along with discounted electricity and telephone services.

What changes do you think you will be seeing in the apparel industry that will be brought about by the pandemic? What do you hope to see?

It would be interesting if this strengthens online shopping and makes it a more user-friendly experience. People are not going to be shopping in stores for a while. I would hope to see new technology that increases efficiency and reduces waste and helps new sustainable brands get in front of customers more since it’s cheaper online than brick and mortar. I’m hoping sustainability gets strengthened but I’m not sure it will, because of the global recession where people become more cost-conscious and choose what is affordable rather than what is sustainable. 

In the UK, we’ve seen how some of the large retailers who have dominated the market for so long and who have supply chains which are the most exploitative are going into administration. This is terrifying for people in the supply chain, but it is making room for SMEs in the market who are more sustainability-conscious, who pay more and have better relationships with their supply chain. I’m hoping they will be the new bigger players; we could go in the opposite direction but I’m hopeful that it won’t. 

What are some of the ways brands and businesses can support factories during this time?

We’ve really appreciated our customers who are sticking with us through this. We’ve seen in the news too, of companies saying that they will see through purchase orders that they are committed to, even if it’s painful on the brand side. We have a handful who are good in that regard and are looking for new opportunities to pivot in the midst of COVID-19 and sell new products, actually ordering more for when they open. And there’s some who went in the opposite direction and found ways to cancel orders at the last minute while we are holding materials, which is pretty painful. 

Inside the Factory

In our history, there have been a few times where customers have given advance payments for materials, but by the time production got underway they have had financial difficulties and have had to delay. We’ve always appreciated those who say that they can’t buy it at the moment but are going to, and then work out a payment plan on a longer schedule. We’ve been flexible to work that out with people. Sometimes it’s 6 months later that they pick up production again. Asking for an advance to cover materials is normal before we start production and that is the most practical solution going forward. 

Other things brands can do is to give as much advance notice as possible. Communication and honesty are great; some people simply look for the technicalities to cancel. 

We’ve really appreciated our customers who are sticking with us through this. We have a handful who are good in that regard and are looking for new opportunities to pivot in the midst of COVID-19 and sell new products, actually ordering more for when they open. And there’s some who went in the opposite direction and found ways to cancel orders at the last minute while we are holding materials, which is pretty painful. 
Corban
Director, SupplyCompass Social Enterprise-Manufacturing Partner

What tools and technology do you use at the moment to manage the sampling and production processes? Have you come across any technology that has impressed you? 

Right now, we are pretty low-tech. The software we use is around project management of production. There’s a free software called Ganttic that helps with scheduling different steps in production from sourcing, to cutting and shipping. Most of the other information is on Google sheets. We are not digitizing patterns or samples—our problem lies in the material sourcing and less in the patternmaking. We often hustle to solve our clients’ problems, about where to find materials and the quality and price. If it’s a western client, we need to import the materials unless it’s a traditional Nepali fabric. Finding the right suppliers is still a manual process. Common Objective is great for finding sustainable suppliers but you still need to have manual conversations with these suppliers about MOQs, pricing, etc. 

The sustainable suppliers are not necessarily great at being professional about it. We find that China is easier to work with because they give you a detailed list, while in India you need to ask 20 questions, while they give one-sentence responses. Being in Nepal, you can notice that it is cast-off as being ‘just a Nepalese order’. Business in India is relational and you need to know someone to get good answers. 
Corban
Director, Social Enterprise-Manufacturing Partner

What sort of technology would you like to see being developed that will make your operations easier?

We would like to see something for a beginner customer that gives them the information needed for a tech pack without making one themselves. Most customers in the sustainability space are smaller and newer and are not experienced or staffed well enough to make their own tech pack. It becomes a long conversation about all the details. If customers could play with these details in a cool, virtual environment, that would be amazing.

Anything that would streamline communication with customers for the questions that arise in development, would be great. Some of that is available in project management software, but we don’t run that right now as most of it is too expensive or not flexible enough. 

Technology like CLO3D and Browzwear are bringing in ways to digitally make samples, doing away with waste. How open are you to integrating such kinds of tech into your business and how soon would you like to see it happen?

I wish we could incorporate them but more importantly for us, is the execution of other areas such as material sourcing and focusing our product offering. Sometimes we go down rabbit trails of products that force us to get out of our comfort zone and learn, but it’s a one-off and we don’t get to use it again. If we became a specialist in a category, we could put these softwares to use really well.  

How do you think converting to digital ways of working can be more beneficial to your business?

It’s mostly in the task workflow that we would see the benefit. If we could have something that spans customer resource management to fulfillment, and accounting or tracking, it becomes simpler for product managers or salespeople to move to the next stage. If I had to choose between 3D design tools and project management/ERP tools for a small factory right now, I would choose the latter. 

Perspectives is a SupplyCompass series that focuses on our supply chain partners operating at the intersection between innovation, efficiency and sustainability, to help shape more inclusive conversations in the fashion industry. Read the full series.
Want to learn more?

View our manufacturing profile for this supply chain partner.

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Hannah Badminton
Project Manager at SupplyCompass
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With a background in sustainability and responsible production, Hannah has two years of project management experience in factories in Nepal and Cambodia, where she specialized in ethical production and sustainable fabric sourcing. She has managed 20+ brands with SupplyCompass and is focused on continually discovering materials and processes less harmful to producers and the planet.

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