It is an immense pleasure to host this business talk in Face2Face with you Mr Mafatlal! Your Group has been a leader in Textiles for over a century now. Shall we begin our talk with a word from you on the sentiments that it bears as it enters a new decade of its long tradition in textiles?
The Arvind Mafatlal Group ( AMG ) has been in Textiles since 1905 and is amongst the oldest Textile Companies in India . Our century old history encompasses textile products made in India during the pre-independence period , as well as fabrics to replace “ imported fabrics “ during the British rule and now we have the vision to “ provide clothing for Indians from every walk and stage of life with a wide range of quality fabrics that makes them look and feel good. “. We are also reliable and innovative supply chain partners for brands in India , as well as globally.
I look the future and the coming decade with optimism for our Textile Business , as I feel the Indian markets will rapidly grow at over 10% per annum in India , and there is a huge opportunity for Indian Textile companies to export value-added Textile products to the Global markets.
As a pioneer player in conventional textile segment, how will you narrate its performance in India as well as off shores?
The AMG Textile Division has a wide range of products , including yarn dyed shirtings , suitings , poplins , prints , bottomwear fabrics , cambrics , school and corporate uniforms , prints , fine lawns , voiles , sleepwear , kidswear , denims and sarees.
We have a strong presence in the Indian markets, and a country-wide distribution network for fabrics and garments for our retail consumers. We are aggressively growing this network, specially in smaller towns, where we feel the growth will be very rapid.
Our fabric division ( which specializes in fine and super-fine fabrics ) is also a “complete fabric solution partner “ to nearly all domestic mid and top end brands like Park Avenue , Zodiac , Provogue etc. and form a part of their formal and casual collections for mens , ladies and children wear.
AMG have traditionally focusssed on the school and corporate uniform business , which we believe has a great growth potential in India and our product range and distribution reach is amongst the best in the country.
We also export our Textile products to USA , Canada , France , Italy , Switzerland , Malaysia , Bangladesh etc to prestigious customers like Marks and Spencer , Phillips Van Heusen , J.C. Penny , Ikea , Tommy Hilfiger and Ann Taylor.
In general, what are cotton market movements and your remarks on it?
The Cotton prices , which had been in the 45-70 cents per pound range for the last decade , has shown a very sharp increase during the last year and peaked at over 210 cents per pound last quarter ( which is a 140 year high on the NY exchange ) . This was due to lower availability due to floods in Pakistan etc, a higher global consumption- specially from China , and a global speculative fervour due to lower global cotton stocks.
With Cotton prices having more than doubled over the last year , the entire Textile chain has seen prices increasing, right from yarn , fabrics , garments and retail . Most brands in India , as well as globally , have had to increase shelf prices anywhere between 5 and 20 % . The consumer will have to pay higher prices and this will impact inflation, as well.
I feel that cotton prices over the coming years should soften, as production and consumption balance out and global cotton stocks increase. However, the low cotton price era seems to be over , and we will have to live with higher cotton and retail garment prices.
Movements in textile industry also mark the re-introduction of TUFs with outlay of Rs 74billion. What does this mean to textile industry, and to Mafatlal Group as it strategizes a come back in industry in a big way?
The re-introduction of TUFS by the Govt. is indeed a welcome step for the Textile Industry in India , as the scheme encourages upgradation of technology , equipment and processes for becoming competitive and produce quality products . The AMG will definitely use the TUFS for new investments as well as for upgrading its equipment.
Since some past years, your group is observed taking big interest in Denim fabrics. How do you see the segment faring in the country? As your Group is gearing up on this segment too, is it likely to add Jeans segment in product portfolio?
The Indian denim industry started only in 1986 in India and has since been growing steadily at the rate of 10-12 % every year. Currently the total capacity for denim fabric is around 650 Million meters per year, of which about 400 Million meters is used for domestic consumption ( fabrics and garment exports ) and the balance exported.
We expect the denim market to continue to grow at 10% compounded every year till 2020 , by which time , the capacity would be well over 1.2 Billion meters per year.
Mafatlal Denim Ltd. ( which was earlier a JV called Mafatlal Burlington Industries Ltd ) had increased its capacity from 10 MMA to 20 MMA in 2008 and is currently supplying denim fabrics to all the large brands in India , like Levis , Mufti , Spykar , Madura etc. Besides, it also exports over 30% of its capacity to its global customers .
We are carefully evaluating the options available for the denim garmenting business and will finalize our strategy shortly.
Mafatlal Group is king of Uniform-wear segment. What are prospects of Uniform-wear industry? Where do you see the growth most- in Corporate sector or Education sector? Can you support your views with a brief market dynamics-
Uniform-wear segment can be divided into 4 major market categories, viz.
1. School and College Uniforms of Rs.10,000 crores 2. Corporate Uniforms of Rs. 2,000 crores 3. Defence, Postal and Military purchases of Rs.500 crores 4.Statement Government requirements like Police, Transport, Municipal Corporations, Public Works Department, Electricity Boards, Forest Department, Water Supply Departments etc., worth Rs. 200 crores.
These segments consist of various product mixes and are governed by specific technical requirements. Most of the Corporate Uniform and marginal share of School Uniform segments have brand requirements. The balance market is highly competitive in terms of prices and services. The unorganized market has a great presence due to their focus on this specific business and price competitiveness.
Among the organized branded players, Arvind Mafatlal Group has a major presence in all the segments across the country. AMG have around Rs. 150 crores business in uniform supplies and it is expected to grow at 20% per annum. The growth in school uniform business is more than the corporate sector. Uniforms have become mandatory till 12th standard and student enrolments are growing across the country. We need to do more and more branding exercises at user end to achieve desired growth. Dealers and converters involvement in the business of School Uniform and Corporate Uniforms are very high. Hence strengthening this network is mandatory.
Many large business houses in the industry are seriously looking at technical textiles as next lucrative business. Any plans on card in the group’s corporate diary too.
I agree that there is great potential in India for Technical Textiles and we are looking at possibilities in all the sectors for a suitable opportunity and we are also open for an International collaboration in this area.
Please describe Mafatlal Group’s walk on sustainability course-
The Arvind Mafatlal Group is a responsible Textile producer and we are of the view that consumers will buy products in the future, which are Ecologically friendly. We are Oko Tex certified and are constantly working towards reducing our carbon and water footprints.
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DISCLAIMER: All views and opinions expressed in this column are solely of the interviewee, and they do not reflect in any way the opinion of Fibre2Fashion.com.
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