Sutlej Textiles and Industries is one of the largest integrated textile manufacturing companies and is strongly positioned in the production of value added synthetic, natural and blended yarns, spun yarns, processing of fabrics and home textile. SK Khandelia, president, Sutlej Textiles and Industries, exchanges his views on the growing opportunities for the Indian textile industry.
As a private enterprise, what is the kind of governmental help that will advance growth in your field?
The ministry of textiles is helping the Indian textile industry meet the emerging global challenges and opportunities and commit itself to meeting and exceeding the expectations of all its stakeholders by building on its previous efforts and by implementing this forward- leaning strategic plan. Recently, the union cabinet approved a set of reforms, including simplified labour laws and technology up gradation for the made-ups sector. "The interventions are expected to boost employment in the textiles sector and create jobs for up to 11 lakh persons, lead to increase in exports and enhance benefits to the workers in the textiles and apparel sector," said an official release. These incentives are part of the Rs. 6,006 crore packages announced for the apparel sector in June.
How big is the market for home textiles internationally? What percentage does India claim in it?
Home textiles segment has become one of the most attractive segments in the textiles industry in the recent past and has emerged as one of the most fashion sensitive segment in the textiles industry. After witnessing sluggish growth phase during financial crisis of 2008, home textiles segment has shown signs of recovery and registered considerable growth in past few years. Retail value of home textiles segment is estimated to be around $107,236.7 million in 2014 and is expected to reach $131,499.9 million by 2020 growing at a CAGR of 3.5 per cent. US and EU, which are the main consumption centres, are gradually but steadily coming out of a recessionary phase. Buyers are back in stores. Apparel and home textile consumption is picking up. Going forward India's share is expected to rise from 7 to 10 per cent and is expected to be biggest beneficiary as Chinese industry reaching its peak.
What percentage of yarn and home textiles manufactured at Sutlej are sold domestically and exported abroad?
The company has identified exports as its preferred area. It has been exporting to over 60 countries and has established relationship with overseas buyers. The company is having three star "Trading House" status granted by Directorate General of Foreign Trade. In order to remain competitive in the international market, management has taken special care to maintain quality of its products which has been well acknowledged by its customers. This is also evident from the substantial export performance of company. For fiscal 2016 and the half year ended September 30, 2016, our total export revenue as a percentage of total revenue was at about 26 per cent. In home textile segment, the contribution of exports in total revenues is exceeding 35 per cent.
Which are the major markets for Sutlej for the product categories - yarns and home textiles? Where is the market growing?
Sutlej has a strong global clientele and exports to more than 60 countries. It has presence across major developed and emerging economies like Australia, Argentina, Bangladesh, Bahrain, Belgium, Brazil, Canada, China, Chile, Cuba, Egypt, France, Germany, Hong Kong, Italy, Morocco, New Zealand, Peru, Philippines, Poland, Portugal, Russia, Saudi Arabia, Sri Lanka, Turkey, United States of America, the United Arab Emirates (UAE) and The United Kingdom, among others.
Sutlej has also been recipient of numerous prestigious awards like Niryat Shree - Gold trophy award for its export performance in spun yarn; Gold trophy by SRTEPC for best performance for export of fabrics to focused Latin American countries and Silver trophy by SRTEPC for Second best export performance in spun yarn category.
Indian yarn is widely accepted in International markets as the exporters here regularly meet the needs of importers with unmatched efficiency and economy in countries like USA, Italy, Spain, Japan, China, South Korea, Taiwan, Bangladesh, Vietnam etc.
Please give details of your last two fiscals and your expectations for the coming two fiscals.
Continuing the upward trend, last two fiscals have also shown improved performance wherein the company's revenues increased and profit after tax strengthened. Given the diverse challenges that the sectoral and the company encountered, this profitable growth represents a validation of our strategic direction. The management is committed for future growth of the company and evaluating various alternate projects focusing more on our core competencies and adjutancy for further growth.
Which three major aspects will influence the export of yarn and fabrics in times to come?
The Indian government has come up with a number of export promotion policies for the textiles sector. It has also allowed 100 per cent FDI in the Indian textiles sector under the automatic route. Government has extended the export entitlement quota for readymade garments and knitwear, yarn and fabrics and made-ups to the US, Canada and EU for one year with effect from 1 January, 2017.
What are the future investment plans at Sutlej Textiles?
We are pleased to state that during the recent past, the company has grown tremendously both organically and inorganically, providing us with the incentive to substantially scale up its capacity across the foreseeable future. As our investments translate into timely project commissioning across the foreseeable future, we expect to report higher revenues, superior margins and increased surpluses that graduate us into the next growth orbit. The company will continue to upgrade existing facilities by additions to modernise existing machineries and install additional latest technology machines across the segments. As stated earlier, the management is committed for future growth of the company and evaluating various alternate projects focusing more on our core competencies and adjutancy for further growth.
What are the issues plaguing this industry? What are your five-fold measures to resolve these issues?
Our capacity in spinning, looms and processing is mainly in unorganized sector in India. Absence of large scale garment units, poor infrastructure, high cost of finance and power in India are the major bottlenecks. Proactive steps from the government and industry will be needed to overcome these bottlenecks.