Cook and Duke, a successful garment exporter

Cook and Duke Company is one of the successful producers of the country’s textile industry, which has been working in the field of design, production, sale and export of women’s clothing for more than 10 years. This company opened its first factory more than 10 years ago in Sefidrud industrial town of Rasht and about 2 years ago, it established its second production phase in Anzali free zone. To learn more about Cook and Duke, we spoke with Mr. Salehi, the factory manager and deputy CEO of the company:

What motivated you to start your own home-based business?

One of the biggest attractions Free ZonesThe issue is the lack of customs formalities so that the company can compete with foreign countries in terms of price by reducing the cost price. Also, the manufacturer is free to use any kind of raw materials, not to have to use only the raw materials provided by the merchants and cloth sellers in Tehran.

What has helped your exports in the region?

Of course, the existing infrastructure in the free zone is not much different from the mainland infrastructure, but certainly the presence of a series of very good and strong companies in the field. Export, Has led to the presence of good foreign traders with high purchasing capacity in the region, which in turn increases the sales market and facilitates exports to other companies in the region. So certainly the accumulation of more competitors and similar companies in the region (of which free zones are one of the suitable platforms) and the production of a wide variety of goods, will increase both the sales market and customers of all companies, as well as investment. Will facilitate direct and indirect external.

What are the products of Cook and Duke?

Our company has been working in the field of women’s clothing production in Sefidrud Rasht industrial town for many years, and of course, the factory is still active, and about two years ago, our new factory was opened in the Anzali Free Zone, which It is also active in the field of women’s clothing production. Of course, at the very beginning of the factory opening, we encountered coronary heart disease, which caused us to produce masks at full capacity in both factories from the very beginning of the first phase of Corona, and until November 1999, we produced 60,000 masks a day. Of course, in the production of masks, as before, a series of information was given, but then the market was saturated, we suffered a lot, but in the meantime, the Free Zones Organization helped us a lot and the existing problems were related to the food and medicine sector in Rasht. They acted. For example, during the production of masks, because we did not have a quota fabric, the cost of each mask was 900 tomans for us, but according to the Food and Drug Administration, they bought each mask from us for 500 tomans, ie one million and four hundred thousand masks. Each of us bought 400 tomans cheaper than the cost price, which definitely discourages the producer.

Can you compete with foreign products?

Our products include coats that are not very similar to foreign ones, but the winter work section, coats and raincoats have foreign examples. So far in these two years, due to the prevalence of the corona and the impossibility of importing raw materials as well as exchange rate fluctuations, all our raw materials were imported from inside the country and on the other hand due to poor infrastructure inside and much more expensive raw materials Domestic compared to, for example, Chinese samples, as well as lack of sufficient variety, the manufacturer’s hand is tied in terms of variety, quality and price; Therefore, if you compare our product with its foreign counterpart in a price level, we can say that the quality of our product is not lower if it is not higher. Also, another reason for the lower relative quality of our goods compared to its foreign counterparts, is that due to the high cost of production in our country compared to abroad, the manufacturer has to increase the speed of work and inevitably from many Reduce production process options. Therefore, a series of companies offer low quality goods at low prices, which makes it very difficult for the customer to differentiate.

What are the most important costs for your business?

The biggest cost of our workshop is the running costs of the workshop and the staff. For example, in the last winter, we had 90 workers and the electricity in the workshop was constantly cut off, and about 5 hours a day, the work was closed, but the labor force was still in force, so we finally had to buy a 350 million Toman generator for the factory.

How are your raw materials supplied?

Our production capacity is high and, consequently, we have a high capacity to use raw materials, and everyone primarily wants to source their raw materials from within their own country – provided there is a similar domestic one – and spend money inside, but The fact is that in the textile industry, apart from the discussion of currency fluctuations, in raw materials, design systems and production devices, etc., we are far behind the world, and therefore, for example, the fabric that must be supplied from inside 100 thousand tomans per meter Similarly, its foreign counterpart can be procured from China at one third of the price. Our plan was to supply part of the raw materials from inside and part from outside, but in the last two years that we have been working in the new factory, due to exchange rate fluctuations and the corona pandemic, we have supplied all the raw materials. We supplied from inside, but of course I mentioned at the beginning that again due to the same issues as the corona and the currency, we did not have any exports in two years and we imported all the products to the mainland. But certainly, if trade routes are opened, we will have to import cheap foreign raw materials to compete with foreign competitors. Of course, at some point in these two years, the conditions for the export of masks were created for us, which was also stopped and they said that it should be stored inside the country.

What can help your exports?

Today, the discussion of sales, both inside and outside the country, depends on an important factor, and that is knowing the culture of the audience and the customer. For example, a dress with a specific design and color combination is sold in the country, but in another country, there is no market and vice versa. The biggest factor that contributes to the above problem is that the relevant institutions and organizations link foreign traders and traders with domestic producers so that their needs are clearly identified for the producer.

We sample the best brands in the world in the factory and we have no shortage in terms of production power, but we need to know what product our target market wants with what characteristics so that we do not suffer much losses by producing low-selling or non-market products.

In this regard, our proposal is to establish a clothing department in the free zone to introduce us and foreign businessmen, especially neighboring countries. Even the costs of this private department should be taken from the companies, but its structure should be correct and efficient.

Exhibitions are now held, but because their credibility and value and how powerful they are in the field of clothing are not very clear, companies usually do not take the risk of attending them due to the high cost of participating in them. In my opinion, if this institutional problem – the formation of a platform for understanding the target market and marketing – is not solved, our exports will never develop, but the share of exports of the country’s producers in the target countries will decrease day by day. Recently, for example, Turkey is replacing Iran in the Iraqi clothing market due to good export planning.

Therefore, if the capacities of the opposite country are clear, we are ready for any kind of production in terms of volume and quality. And companies can not afford it without incurring exorbitant costs!

What factors affect clothing exports?

In my opinion, 3 items are effective in exporting clothes: price, quality, time. In terms of time, we have the problem in the country that the process of sending cargo for various reasons, takes time and goods arrive late to the customer. In terms of price, as mentioned before, it is more a matter of very cheap Chinese products, which makes our competitiveness in the global market difficult. Regarding quality, I mentioned before that mainly the exorbitant costs of production in Iran and inevitably the high speed of production and also the low quality of raw materials due to the old infrastructure, reduces the quality to some extent and another factor is the same Uncertainty is the target market, which is an institutional problem and has an institutional solution. Also in this context, it is possible to establish communication between companies located in different free zones and create a complete and good database, which can sometimes be the production proposals from the manufacturers themselves due to the recognition of different production capacities in Create all free zones of the country. For example, from the use of these institutional databases, during the production of the mask, we had a problem preparing the fabric at a time when the problem was solved through the secretary of the textile trade union, who had a good database of manufacturers.

What is the difference between working in free zones and the mainland?

There is no difference between a free zone and a mainland in terms of government costs, such as taxes and licenses, such as operating licenses, and so on, and only customs fees are lower. There have been a number of tax benefits that have been ordered to be lifted this year. Just because we are smaller than the mainland in terms of the number of companies and the desire of the Free Zones Organization to be present and maintained investor That is, administrative work such as obtaining licenses and permits is done more quickly.