GOKALDAS EXPORTS Geared TO DEFY TOUGH TIMES BY REDEFINING STRATEGIES
EXPANSION Of CAPACITIES & HIGHER OPERATIONAL EXCELLENCE CURRENT FOCUS
A TETE-E-TETE WITH
SIVA GANAPATHI, MANAGING DIRECTOR, GOKALDAS EXPORTS Gokaldas Exports, that has over 22 factories in and around
Bangalore and has a turnover close to Rs 1000 cr., is drafting plans to realize profitable growth.
Gokaldas Exports, India’s apparel major company is in the news once again. The group that was acquired by Blackstone in the year 2007 has been through a lot of ups and downs. The PE firm took a haircut to exit its decadelong investment as they could not bring the company to the trajectory of growth and development it was used to in previous years. The profits of the company were dwindling and there were many rumours going in the market regarding the future of company.
To get the insights, Team Perfect Sourcing recently got into a face2face conversation with
Siva Ganapathi, who joined the company as the Managing Director around a year back. Siva has led several high-growth businesses in diverse industries across several countries in Asia, North America and Europe. Coming with a background in finance, IT and telecom industries, Siva, who was last associated with the cellular business of the Aditya Birla
Group as COO, is quite confident about the turnaround of Gokaldas Exports.
He is now busy fine tuning the procedures, standards and strategies at Gokaldas to bring it back as a strong enterprise with stability on all fronts. “I see tremendous intrinsic capabilities in terms of design, manufacturing, supply chain and customer relationships, which augur well for Gokaldas to be a leader in the apparel industry and serve its clients well,” he shared.
On being asked how has been the transition from Telecom to apparel, he reverts with a smile and says, “I have had the fortune of working in several different industries, running businesses in different countries, seeing business cycles and turning around underperforming businesses. So a new industry is not daunting. My experience in other industries will definitely be an added advantage.”
He expressed that even though he does not have the domain knowledge of fabric and apparels, it can be acquired. However, what is critical is the ability to understand how you make money. “I hope to bring many of my insights and experience to GE and set it on an accelerated growth path,” Siva said.
When asked about the initial challenges that were faced after joining the company, Siva replied, “Of course there were many challenges, as I came at a time when drawback rates had just dropped, currency was fluctuating and there was a pressure on margins. GST blocked additional working capital. It was definitely a tough scenario.”
Gokaldas Exports, that has over 22 factories in and around Bangalore and has a turnover close to Rs 1000 cr., is drafting plans to realize profitable growth. Siva highlighted several focus areas, i.e operational excellency, higher productivity, reducing wastage, efficient supply chain and getting right quantity at right price and time. After following new methods the company saw an increase in incremental productivity that came at 10% and reduced wastage also. “Even if we reduce 1% wastage and 1% increase in productivity it means saving a lot which would eventually bring long term benefits,” he elaborated.
Gokaldas Exports has been working with top notch international brands and has a loyal base of customers. It was important to gain the confidence of buyers and thus a major thrust was on creating connect with customers and improving relations with those who have been associated with the company for many years. “The team did a good job, as we were fortunate to add some new clients while retaining existing ones,” he explained.
Siva also pointed out that one of areas of concerns is that most of the factories of GE are located in and around Bangalore, which is quite expensive due to which the company will look at adding capacity in low cost areas where the Government is offering land, labour and other facilities at subsidised rates. “We want to start building long term capacities which will stand for next 10-15 years,” said a confident Siva. He is clear of having not just world class factories for the company, but also units which are much ahead of time in terms of the way they function and perform. “It is important to work on systems so that the units work seamlessly,” he said.
“It is important to work on systems so that the units work more effortlessly and that is why we would like to work on infrastructural expansion of the company in terms of management,” he said. He explained the same and said,
“We need systems/ software that can handle order to cash, inventories, product management, so that everything is system driven and the same process can be followed at all units of GE.”
Training and HR are integral part of every organization and from hiring the best of the manpower to training its employees the company is working on all fronts. “Attrition is a big challenge today. We have
The company plans to invest around Rs.50 cr on modernisation in next three years and around Rs
150 to 200 cr for capacity expansion.
more than 20,000 people. We are working on team engagements, managerial training, skill training and many such areas,” he added.
GE while handling fashion and men’s wear has now enhanced its focus on products like work wear, uniform, technical garments and outerwear. In the coming year, the group plans to expand its capacities and modernize its units also. “We have raised funds for the same and will be investing in modernisation and capacity expansion through equity, debt and internal accruals,” he informed. The company plans to invest around Rs.50 cr on modernisation in next three years and around Rs 150 to 200 cr for capacity expansion. Furthermore, working on product categories that has higher value and can fetch better margins by adopting technology which is durable, can perform multitask and involves less manual approach is what the group intends to achieve.
An obvious question that comes to mind is that, what would Siva like to bring in from his past experience in telecom to apparel sector. He said, “Telecom was a more process and technology driven sector where all standards were pre- defined. I would like to bring the same standards here as well.”