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Interview with Bhavin Parikh

Bhavin Parikh
Bhavin Parikh
CEO
Globe Textiles (India) Ltd
Globe Textiles (India) Ltd

All efforts must be directed to ease Indian manufacturing
Globe Textiles India Ltd (GTIL) is a leading Indian manufacturer and exporter of textiles, fabrics and garments. The company started operations in 2008, and the key differentiator that marked its entry into the international denim market was that it chose to go against the tide. It began exporting denim fabrics to China and Hong Kong at a time when Chinese imports into India dominated. Bhavin Parikh, CEO, discusses the post-GST impact and the latest developments at the company. 

Sarongs are one your top-selling products. Which are your major markets for sarongs?

Southeast Asia and the Gulf are our topmost markets for sarongs. Unfortunately, there is no composite data compiled that defines the overall market size of sarongs in India. Sarongs are one your top-selling products. Which are your major markets for sarongs?
 

What is size of the textile market? At what rate is it growing?

The current size of the textiles market in India is estimated to be US$ 120 billion. The market is seeing a compounded annual growth rate (CAGR) of 25 per cent year-on-year. Going by the current trend, the India Brand Equity Foundation expects the total market size to touch USD 220 billion in 3-4 years. 
What is size of the textile market? At what rate is it growing?

What are your thoughts on GST?

The implementation of the goods and services tax was needed to cover the country under the "one country, one tax" regime. July 1, 2017 can indeed go down as a landmark development in tax reforms after a long wait.

Which are your major markets for the rest of the products? What markets do you plan to penetrate into in the near future?

We have penetrated Europe well as far as the rest of the products in our portfolio are concerned. We have set our eyes on the US next as we feel there is a huge potential there which we are suitably geared to cater to. We have also received a positive feedback from our clients there, and they have connected well to our value proposition.

What are the latest trends and innovations dominating your industry?

The trend is more in favour of developing fabrics that are comforting, functional and breathable. We have put a lot of our resources to research on dailywear. The emphasis is on creating something that is strong and stretchable without compromising on classy designs. At Globe Textiles, our focus will be on the fashion-conscious crowd and we want to be relatable to them. On the manufacturing side, the tilt is towards precision-driven systems, technology and automation to leave no room for errors and meet the steady rise in demand effectively. The delicate balance between quality and quantity will be crucial to maintain.

What kind of impact will it have on the textiles industry?

In the short term, the impact of GST implementation is disturbing. But I am sure prospects will unfold positively in the long run. There are multiple facets to this conversation that needs to be factored in. 

For one, the textiles industry comprises organised and unorganised players and a large number of small and medium-level entrepreneurs are involved in the trade. Not every process follows standard measured norms in the business of textiles, right from cotton sowing to retail. The general perception about the implementation of GST was that it would bring down prices. On the contrary, we see prices shooting up. Second, differential GST rates apply on multiple inputs that go into making of the final product. Textile had been outside the purview of VAT after the yarn stage.

Third, the whole industry is yet to come on board and is not GST-ready. Only 15-20 per cent of the organised textiles trade has made a successful transition to the new GST regime. Till all are on the same platform, processes will not be seamless and will disturb routine affairs. Smaller players due to the lack of expertise, knowledge and costs find it difficult to do business. Getting those who have never been part of any structured operations, to undergo transition to a new book of account and improvising is time consuming and a mammoth task. There is no assured timeline defined on when short-term deficits conclude and long-term gains trickle in. The GDP numbers for the last quarter have not fared well.    

What are your expectations from the National Textiles Policy that is expected to be announced soon?

The National Textiles Policy is much awaited and I really hope it comes with clauses that raise import duties to protect domestic players. I do wish it makes ample provisions to focus on skill development to generate employable labour. India competes with Asian peers in textiles / garments and the latter are already at an advantageous position, with preferential duties eradicated. Income tax rates in Bangladesh have already been reduced from nearly 22 per cent to 12 per cent. It is due to such conducive conditions that we now see most big brands purchasing from Bangladesh. All efforts must be directed to ease Indian manufacturing. Our exports must augur well in comparison to our neighbours too.

What are the issues plaguing this industry?

The textiles industry has historically had no entry barriers in place that allows one to sieve the best quality. To make matters worse, missing skillsets reflect on the dipping quality in most cases. The ineptness looms large and for them, it is hard to compete, especially when rules are fast changing and the industry faces reduced margins. Expertise is not established by spreading oneself too thin.

What are your five-fold measures to resolve these issues?

Our team at Globe Textiles has trained its attention on continual research to develop innovative value products. The designs we create are exquisite and stand apart. Our market reach is wide and well penetrated. Our clients and vendors have stuck with us given our efforts to deliver the best. We love to enhance the overall experience of our customers, allowing them room to differentiate between us and other industry peers. To complement our objectives, automation is the key and we have the best infrastructure in place to take care of evolving realities. There is no room for complacency, errors and stagnation.

What are the sustainable policies followed at Globe?

Globe Textiles India Ltd, an ISO 9001:2008 company, is a human-centric organisation and every process here sees voluntary intervention by the founders. The team undergoes extensive skill training through in-house and out-bound training programmes. They also participate in exhibitions in India and abroad for greater exposure to global trends. We keep improvising in tandem with our pace of growth. Internally, we have undergone a cultural change keeping market dynamics in mind. The shift is gradual to brace for future phases of exponential growth that we foresee. We take on board experts in the field when needed, especially to assist us in reducing environmental impact, minimising use of water, electricity and fuel consumption. We strive to push our own efforts to keep the customer satisfied.

What budget have you allocated towards R&D?

Research and development at Globe is a regular exercise. We spend not less than Rs25 lakh to Rs30 lakh per annum on this and this is slated to rise to Rs50 lakh a year as our new washing unit becomes operational. Technology upgradation will be of prime importance.   
What budget have you allocated towards R&D?

Any near-future investment plans?

We will start our own state-of-the-art washing unit with the aim to revamp the entire garmenting section and take it to the next level. The unit will be one of its kind, specialised and capable enough to serve the biggest brands of the fashion industry. The unit will be modelled on fashion centricity and the philosophy will be to not just wash but churn out newer fashion trends every day. The company is also inching its way closer to attaining a Worldwide Responsible Accredited Production (WRAP) certification or an equivalent certification for its units, which is a benchmark to promote safe, lawful, humane and ethical manufacturing around the world through education. (HO)
Published on: 07/10/2017

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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