Plan to achieve ₹3000 cr revenue in next 5 years
BRFL Textiles Pvt Ltd (BTPL) was set up as a new entity in Aug’20 as part of a restructuring process undertaken by Bombay Rayon Fashions Limited in which it hived-off its yarn dyeing & fabric processing units located in Tarapur. Prashant Agarwal, Managing Director of BTPL, speaks to Paulami Chatterjee about how the company has grown in the last one year, its ramping up of production to take advantage of the “China Plus One” strategy, and major goals for the next 5 years.
What led to restructuring of Bombay Rayon Fashions and formation of BTPL?
BRFL Textiles Pvt Ltd (BTPL) was set up as a new entity in Aug’20. The entity was formed as part of a restructuring process undertaken by Bombay Rayon Fashions Limited in which it hived off its yarn dyeing & fabric processing units located in Tarapur into BTPL by way of a slump sale on a going concern basis, along with all associated brands, employees, assets, etc.
The restructuring was undertaken as BTPL had huge growth potential and was poised to grow into one of the leading fabric processing houses in India. This was followed by a private equity infusion funding of about 240 crores from a consortium of marquee financial investors.
Since the funding, the company has ramped up its production significantly and brought in new talent across departments and initiated various measures to be prepared for the next stage of growth. While BTPL has stemmed from Bombay Rayon Fashion, currently, the company is run as a separate entity from Bombay Rayon Fashion.
How have consumer preferences changed in the current scenario?
Over the years, the fabrics from our Tarapur plant have earned the trust of our customers for its superior quality, design innovation and uniqueness. Our growth is essentially coming from the same set of customers with increasing wallet share as well as winning back old customers. We are looking at expanding to reach full capacity over the next 2 years. We don’t see much change in our mix of fabric or target markets going forward except that our B2C share will increase from here on. We believe that we are the supplier of choice for our clients due to our design capabilities, market intelligence, innovation, cost effectiveness and efficient lead times.
Where are your manufacturing units based at? What kind of state-of the-art facilities do you have?
Our manufacturing units are based out of our plant in Tarapur.
BTPL is engaged in the processing of fabrics using world’s best state-of-the-art European technology, right from pre-treatment to finished fabrics. We have the capacity to produce 4,00,000 metres per day.
- Prints Capacity – 1,25,000 metres/day. 11 rotary machines of make “MHM” and 16 digital printers of make “Mona Lisa” for printing
- Solids – 1,50,000 metres/day. 4 CDRs of make “Manforts”, 13 exhaust dyeing of make “Theis soft flow” and 10 jigger dyeing machines of make “Theis”.
- Yarn Dyed – 1,25,000 metres/day. 65 yarn dyeing machines of make “Loris Bellini” ranging from 1.6 kgs to 1056 kgs.
Which original brands of Bombay Rayon Fashions does BTPL retain?
The brands retained include Bombay Rayon, BRFL, Linen Vogue La Classe’, Giza Classe’, and Dickens & Browne.
Where is BTPL headquartered at present and what is the staff strength?
BTPL is headquartered at Tarapur, Palghar. Recently, we have added several senior managements to our team and grown our workforce from 1300 to over 2300 employees in the past 4 to 6 months.
Fashion executives/brands are increasingly being urged to place sustainability at the core of their business models post Covid-19. How does BTPL fit into the plan?
We, as an organisation are fully committed to sustainability and are continuously working towards it. Recently, BTPL set a new benchmark in sustainability by introducing a new sulphur dyeing process – it’s a continuous dyeing method that does not require water. BTPL is the first company in the textile sector to implement this new process of dyeing, making them the pioneers of this innovative sustainable process.
As a sustainable manufacturing unit, BTPL, since inception, has taken efforts to limit carbon emission and recycling of water through multiple ways. The current efficiency of the reverse osmosis unit at BTPL’s Tarapur plant facilitates the unit to reuse 50 per cent of the effluent water, enabling the plant to recycle upto 4 million litres of water per day. The company is looking to further strengthen this efficiency and aims to increase the recycling level to 90 per cent in the next 3 months, enabling the plant to recycle upto 7.2 million litres of water per day.
Additionally, most of the reactive dyeing processed in the plant is undertaken with e-control process, thereby avoiding salt which in turn avoids increasing the TDS content of water. BTPL also uses its energy co-generation design at its Tarapur plant, which enables it to reuse 48 tonnes of steam per hour, and save 250 tonnes of coal per day, leading to a significant reduction in carbon emissions that exceed even the sustainability benchmarks of global textile companies.
BTPL implements its sustainability measures across its products as well. A majority of the fabrics produced by BTPL, such as linen and cotton, are sold in its natural form, making it a part of the sustainability chain. Likewise, a large part of the linen and linen blended collection is produced by maintaining a natural fibre colour without adding any dye or colour to the fabric. In addition to this, the polyester blended fabric produced by the plant is made using recycled polyester.
How do you plan to take advantage of the “China Plus One” strategy? What steps are required to fulfil it?
India has already started to benefit from the ‘China Pus One” strategy, and we anticipate a surge in demand from the Indian textile industry from international markets due to this strategy. China exports 5 to 6 million metric tonnes (MMT) of Xinjiang cotton to the US markets. However, post the ban on Xinjiang cotton in the US, the Indian cotton industry, which is the largest producer of cotton should be able to make the most out of the opportunity.
The Government of India is also swiftly working on all these fronts to grab this opportunity created by “China Plus One”. We believe that the next decade for the Indian textile manufacturer is going to be huge as exponential growth is expected as a result of this strategy.
While the policy has been beneficial there is a long way to go. Though in ease of doing business, India has quickly moved up to 63rd position but still it is far below China. India needs to adopt a multi-pronged approach to scale up the manufacturing sector including labour reforms, improving logistics infrastructure (domestic level as well as international connectivity), free trade agreements, technological upgradation and production linked incentive schemes, land reforms, improving contract enforcements, etc.
For BTPL to capture this opportunity, we are continuously ramping up the production to meet the global scale requirements under the “Make In India” plans.
How does the company operate in the domestic market?
BTPL has a strong presence in the B2B and B2C space along with long-standing relations with leading brands across the globe and sells through large garments across India who also sell to domestic brands. On the domestic branded sales front, the distribution network of BTPL is spread across its own EBOs, over 100 retailers, and over 8000 distributors.
How has the company grown in the last 1 year after its hive off?
Since the hive off, the equity infusion was utilised primarily towards upgrading current technology and supporting the working capital requirement. We are now a debt free company which gives us enough flexibility and liquidity to service our clients.
Since the funding, the company has ramped up its production significantly at the Tarapur plant from 100,000 metres per day to now 150,000 metres per day as a consequence of improved capacity utilisation. We aim to reach our annual processing capacity of 144 million metres (400,000 metres per day) over the course of time. We have brought in new talent across departments, initiated various measures to be prepared for our next stage of growth and have far exceeded our internally set financial budgets for this period.
We are continually enhancing our production and are looking to scale it up based on expected growth in demand from export as well as in the domestic markets. We will continue to invest in people and maintenance Capex to ensure that our state-of-the-art equipment at our plant is well oiled, efficiently run and complies with all regulatory standards.
With our renewed focus and financial profile combined with our state-of-the-art production facility, BRFL Textiles is poised to be the leader in fabric processing in India catering to domestic and international fashion trends.
What kind of capacity expansion is planned for the future?
Since the funding, the company has ramped up its production significantly at the Tarapur plant from 100,000 metres per day to now 150,000 metres per day as a consequence of improved capacity utilisation. We aim to reach our annual processing capacity of 144 million metres (400,000 metres per day) over the course of time. We are continually enhancing our production and are looking to scale it up based on expected growth in demand from export as well as in the domestic markets. We will continue to invest in people and maintenance Capex to ensure that our state-of-the-art equipment at our plant is well oiled, efficiently run and complies with all regulatory standards.
What are your major goals for the next 5 years? What kind of revenue you are looking at the current fiscal?
With our renewed focus and financial profile combined with our state-of-the-art production facility, BRFL Textiles is poised to be the leader in fabric processing in India catering to domestic and international fashion trends. Our immediate plan is to utilise the installed capacity of 4,00,000 metres/day, and we are looking at expanding to reach full capacity over the next 2 years.
In the next 5 years, we plan to achieve revenues of ₹3000 crore, and we will also look to dominate the domestic market through robust distribution networks, drive innovative products across linen, cotton and viscose fabrics and strengthen our brands, viz Bombay Rayon, Linen Vogue La Classe’, Giza Classe’ and Dickens & Browne.
Which are your major markets in India and abroad?
BTPL supplies fabrics to both the Indian and international markets including to US, Mexico, Japan, Germany, Netherlands, UAE, Saudi Arabia, South Africa, Indonesia, Hong Kong, Vietnam, Malaysia, Cambodia, Sri Lanka, Bangladesh, Thailand, Myanmar and others.
Domestics Brands: Allen Solly, AND, Arrow, Benetton, Blackberry, Fab India, Indian Terrain, Jack & Jones, Levis, Numero Uno, Pantaloons, Reliance Trends, Only, Shopper Stops, US Polo, Vero Moda, and Westside.
International Brands: A&F, American Eagle, Ann Taylor, Belk, Carrefour, Cecil, George, JC Penny, K-Mart, M&S, Macy, TJ Maxx & Tom Taylor.
Besides these we have over 100 EBOs and 8000 distributors across the country.
How has the pandemic impacted BTPL? What hardships did you face during the second wave and how were they different from the first wave?
The pandemic has not only affected the business, but the overall sector. Domestic business went on pause mode and export orders from Europe and US market dried down. However, post pandemic waves, orders from western countries started flowing in, which kept us afloat. Since September, we have been continuing our production and now we are looking to scale it up based on growth in demand as well as domestic markets.
We have the largest production capacity in the country at present and have the capability to utilise them and deliver any large-scale order before the deadline. We also believe that with no debts in our books, we have the flexibility and liquidity to overcome the disruptions and reach our annual processing capacity of 144 million metres.
How did you tide over the hardships--in terms of business, orders received, staff etc?
Given the fresh equity capital raised and with almost no debt on our books, we are relatively in a very stable state to compete in the market vis-à-vis our peers.
We have a strong presence in the B2B and B2C space along with long-standing relations with leading brands across the globe and sell through large garmenters in India who also sell to domestic brands.
We also always focus on high value-added design centric products and, hence, in this tough market of rising prices of various raw materials, we are able to still absorb these costs by bringing in more value additive products to compensate for lower volumes. One of our biggest advantages is that we provide greater flexibility in terms of product offerings at various price points and rapid responsiveness.
Most importantly, we are a customer centric company. Hence, rather than chasing growth, we advise our customers to play safely in this volatile market. The idea of standing by the customer in these difficult times has in turn helped us get more business due to the customer’s increasing confidence in us meeting their expectations and commitments. Our growth has been primarily attributed to the increasing wallet share of our current and past customers.
How much time will BTPL require to bounce back to pre-pandemic levels?
We hope to spring back to pre-pandemic level by next year.
