In­dian Tex­tile In­dus­try; Points That Need Im­me­di­ate At­ten­tion

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As far as op­ti­mistic views are con­cerned, not ev­ery­one sees the re­cent de­vel­op­ments in the same way like the per­cep­tion that China is va­cat­ing the tex­tile in­dus­try. Many in the in­dus­try feel that in the shadow of trade war be­tween China and the US (though now 90-day trade tar­iff cease­fire is in place), the US and Canada are look­ing at In­dia as an op­tion very se­ri­ously and they are com­ing here to in­crease their sourc­ing right from yarn to gar­ment, and hence there is an op­por­tu­nity to grow tremen­dously. Strongly agree­ing with this point, Shekhar Agar­wal, Vice Chair­man, RSWM Ltd. says, “Be­cause of this and few other rea­sons, I must say that we have a very bright fu­ture and we should be very op­ti­mistic.” How­ever, Rakesh Mehra, Vice Chair­man, Ban­swara Syn­tex Ltd. strongly coun­ters the per­cep­tion of Chi­nese’s share com­ing to In­dia. “From last two decades, I am hear­ing about China va­cat­ing the tex­tile in­dus­try, but we have not yet been able to cap­i­talise on this, in fact, we have not taken any por­tion of China’s busi­ness so far.” Rakesh strength­ens his view with data as he adds that China is still pre­dom­i­nantly ex­port­ing value-added tex­tiles, be it fab­ric, gar­ment or made-ups, while In­dia is pri­mar­ily into yarn and fab­ric. “In the case of In­dia, and es­pe­cially MMF, to­day 42 per cent of raw ma­te­rial is be­ing ex­ported while if one looks at China, it is less than 7 or 8 per cent. This is where all stake­hold­ers need to sit to­gether and see how we can in­crease this share,” he ar­gues.

Many CxOs ad­mit that for In­dia, syn­thetic fi­bre base is the sin­gle big­gest op­por­tu­nity which is not fully tapped by In­dia in the global arena. The over­all syn­thetic base is still some­where around 30 per cent of In­dia’s to­tal tex­tile busi­ness while for the rest of the world, it is 65 to 70 per cent. “On an av­er­age, 90 per cent of In­dian ap­parel ex­port is of cot­ton base, so the in­dus­try can­not grow fur­ther with­out in­creas­ing its fo­cus on polyester. The key growth ar­eas like tech­ni­cal tex­tiles, in­dus­trial tex­tiles etc. are mainly pos­si­ble only be­cause of the use of syn­thetic… There is no choice left other than syn­thetic and In­dia should align it­self with the world to fo­cus more on syn­thetic,” in­sists SK Khan­delia, Pres­i­dent & CEO, Sut­lej Tex­tiles & In­dus­tries Ltd. The in­dus­try is de­mand­ing that poli­cies, es­pe­cially duty struc­ture should be fi­bre-neu­tral.

Fo­cus­ing on MMF or syn­thetic base pro­duc­tion doesn’t mean ig­nor­ing the cot­ton seg­ment as it is a com­mon and

In­dia still ex­ports 27 to 28 per cent Polyester Sta­ple Fi­bre (PSF) and at least 40 per cent of Vis­cose Sta­ple Fi­bre (VSF) is be­ing ex­ported. Why this can’t be con­verted into yarn, fab­ric, and gar­ment within In­dia, is a ma­jor is­sue. One of the most im­por­tant points in this re­gard is to make sure the avail­abil­ity of this raw ma­te­rial at a com­pet­i­tive price.

The in­dus­try is not adopt­ing tech­nol­ogy, es­pe­cially ad­vanced tech­nolo­gies like IoT and those re­lated to R&D.

strong per­cep­tion that one should play on the strength. Suresh Ko­tak, Chair­man, Ko­tak & Co. claims, “The R&D, with re­gard to cot­ton pro­duc­tion, is go­ing in a good di­rec­tion and as far as the prospects of In­dian cot­ton are con­cerned, I must say that the best days of In­dian cot­ton have come as the sus­tain­able as­pect of polyester is a grow­ing con­cern for global cus­tomers. But In­dia needs to work on the back­ward and for­ward value chain of cot­ton to get great re­turns from the cot­ton seg­ment.” Re­act­ing to the sus­tain­abil­ity call, the lead­ing play­ers of MMF say that sus­tain­abil­ity in this re­gard is largely to use best pro­cesses and con­trol wastage. Even in case of cot­ton, use of pes­ti­cide or con­sump­tion of water is an is­sue, so sus­tain­able as­pect is to look from a dif­fer­ent per­spec­tive and it does not nec­es­sar­ily mean ‘nat­u­ral’.

Apart from the is­sues of cot­ton and syn­thetic, one of the big­gest is­sues in In­dia is with re­gard to Gov­ern­ment. sup­port and sub­si­dies. There is al­ways a hue and cry on the same by all stake­hold­ers of the in­dus­try, but now for sure, there is an ur­gent need to change the mind­set as well as the busi­ness model. “Those days are over... we can’t ex­pect the Gov­ern­ment to give us any­thing,” ar­gues Rahul Me­hta, Pres­i­dent, CMAI, ad­ding, “In ex­port, since too long, we have been de­pen­dent on the Gov­ern­ment sub­si­dies and have even made busi­ness mod­els ac­cord­ingly. It is there­fore very dif­fi­cult for us to move out of this cy­cle and stand on our own feet. But one has to do this, other­wise there is prac­ti­cally no pos­si­bil­ity of growth.” On sim­i­lar lines, Prem Ma­lik, Vice Chair­man, NSL Tex­tiles is of the view that the in­dus­try, as well as Gov­ern­ment poli­cies, need to rein­vent them­selves and then only In­dia can have a good chance to be very close to China. In­dus­try also says that the Gov­ern­ment should at least main­tain con­sis­tency at pol­icy level. They have quoted the ex­am­ple of fre­quent changes in tax struc­ture un­der GST which should have been bet­ter planned and fixed at the ini­tial stage rather than af­ter in­dus­try’s suf­fer­ing and strug­gle.

Im­prov­ing Com­pet­i­tive­ness, Profitabil­ity…

In­ter­na­tional strate­gic man­age­ment con­sul­tant, Navdeep Sodhi, Part­ner, Gherzi sees com­pet­i­tive­ness at three lay­ers which are global, in­dus­try and at com­pany level. He says that clear vi­sion is of­ten claimed with moth­er­hood state­ments but they are not ac­com­pa­nied by strate­gic in­tent and strate­gic im­ple­men­ta­tion. Tex­tile echo sys­tem; in­te­gra­tion of the coun­try and global sup­ply chain; re­sources in terms of cap­i­tal and HR; in­no­va­tion quo­tient; and agility of the com­pa­nies to re­spond to the mar­ket are some of the other ar­eas where In­dian com­pa­nies need to fo­cus.

The con­tin­u­ously grow­ing In­dian con­glom­er­ate Vardhman Tex­tiles is one of the best ex­am­ples as far as growth, com­pet­i­tive­ness and profitabil­ity are con­cerned. Neeraj Jain, JMD, Vardhman Tex­tiles shares the se­cret about the same: “We con­tin­u­ously ex­pand and take at least two to three years for con­sol­i­da­tion be­cause we be­lieve that it makes one fi­nan­cially bet­ter… and get sup­port ca­pac­ity to ex­pand fur­ther. Along with the ex­pan­sion, ex­ist­ing ca­pac­i­ties do re­quire the same kind of at­ten­tion to re­main com­pet­i­tive. When­ever we ex­pand, it is equally im­por­tant to give the same at­ten­tion to the al­ready ex­ist­ing in­fra­struc­ture.” He fur­ther adds that de­spite be­ing more than 50 years old and a big or­gan­i­sa­tion, they are young at heart and have a higher level of en­ergy… Re­gard­ing in­no­va­tion and var­i­ous im­prove­ments, Vardhman con­tin­u­ously fo­cuses on im­prove­ment on a day-to-day ba­sis. The ad­van­tage that it has gained from these im­prove­ments, are passed on to its cus­tomers also.

• The in­dus­try needs to de­velop lead­ers, and for­ward-look­ing lead­ers who can in­vent new tech­nol­ogy, modern man­age­ment tools and look at new ar­eas for growth.

• Ex­pan­sions and con­sol­i­da­tion need to have proper bal­ance.

SK Khan­delia, Pres­i­dent & CEO, Sut­lej Tex­tiles & In­dus­tries Ltd.

Shekhar Agar­wal, Vice Chair­man, RSWM Ltd.

Rakesh Mehra, Vice Chair­man, Ban­swara Syn­tex Ltd.

Prem Ma­lik, Vice Chair­man, NSL Tex­tiles

Suresh Ko­tak, Chair­man, Ko­tak & Co.

Navdeep Sodhi, Part­ner, Gherzi

Neeraj Jain, JMD, Vardhman Tex­tiles

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