Interview with Mr Shreyaskar Chaudhary

For us the being behind Pratibha goes beyond the literal, it embodies a constant endeavor to push the boundaries, surpass expectations & innovate outside the envelope to realize the larger goal of social well being, growth & development.

To sum it up I `ld just like to add a few lines by a great English novelist Benjamin Disraeli : “the greatest good you can do for another is not just share your riches but to reveal to him his own.”

Having started our operations with just spinning in 1997 we upstreamed our processes to integrate organic cotton fiber cultivation , fabric knitting , dyeing , printing & garmenting to complete our textile value chain sustaining 7000 employees at the manufacturing level & 28000 members at farm level in a way that is ecologically & socially relevant.

Personally I feel the Key global trends to have shaped the industry in the past decade are:

End of quotas regime in 2005 that created huge opportunities for some developing economies marking a shift of business from South American to Asian countries, with specific benefits in Africa establishing of large capacities across entire value chain.

Secondly the biggest economic recession of all times experienced over the past two years caused huge volatilities in the market, the companies which were experiencing growth in the pre- recession era went into the mode of slump during recession causing huge volatilities in commodity prices in crude and cotton prices shooting the yarn prices to an all time high in the post recession era.

Another trend evolving in the past decade is the coming of age of fast fashion as a central pivot of successful business models like Zara, H & M, and a host of other UK retailers like The Primark, the Primark effect in UK led to a surge in throwaway cheap fashion even in the wake of rising costs of raw material forcing other global retailers in the fray to cut down their lead times and inventory levels.

Another manifestation of the Primark effect (which has seen the amount of unwanted clothes being dumped in landfill soar from 7% to 30 per cent in UK in the last five year and similar phenomenon across the world) would be the emerging class of eco-conscious consumers inclined to make a difference through their purchase of longer lasting/better quality /environmentally sustainable clothing. Consumers are shifting their focus away from disposability of goods to durability of textiles.

Global retailers like M & S, WALMART, Patagonia, and Tesco are increasingly innovating offering, exceeding their product basket of sustainable apparel products. Eco-Giants such as Shell and Toyota are also committed to do their bit in addressing energy security and Climate Change issues.

Indian Textile Industry in the post quota regime was more affected than China : in the sense that Chinese manufacturers focused on serving major retailers through large scale production and speed-to-market through an emphasis on logistics .With China’s dominance in the sector low-income countries became most vulnerable in the post-quota era. China continues to be an undisputed leader in world Textile sector making a quarter of apparel sold worldwide.

But I feel, India also enjoys a few key benefits like self sufficiency in Cotton whereas China imports a fifth of its cotton requirements.

We have higher export realization i.e. while china caters to the mass segment; India has the ability to service high value niche orders and has better design resources. This is reflected in the higher average export realization of India as compared to China. Design and fashion capabilities are key strengths that will enable Indian players to strengthen their relationships with global retailers and score over their Chinese competitors.

Moreover, as our Union Minister for Textiles has the recently quoted during International Apparel Federation, another advantage for India is that the Production facilities are available across the textile value chain, from spinning to garments manufacturing. The industry is investing in technology and increasing its capacities, which should prove to be a major asset in the years to come .The Indian textiles and apparel market is currently valued at $40 billion and is growing at 14 per cent. Indian textiles and apparel exports, which is worth $22 billion, is expected to register a four-fold increase to touch $90-100 billion in the next 25 years.

The Indian retail market, which is the fifth largest retail destination globally, has been ranked as the most attractive emerging market for investment in the retail sector. The GRDI report states that apparel is the "largest organized retail category", accounting for 39 per cent of the organized market. It is growing at the rate of 12 to 15 per cent annually which is good news for apparel retail and advantage for the organized Retail sector.

The TUF which was initially launched in 1999 was later extended by the Ministry of Textiles for the 11th Five Year Plan to boost the industry .With TUF many entrepreneurs saw the option for cheap availability of finance but they tend to forget the vagaries of the market, and tinge of cotton purchasing. Revival of the global economy from the financial crisis, alternatives for crippling power cuts and an improvement in the yarn and cotton prices will bring about a positive change in the performance of the industry. TUF policy towards Indian textiles needs to be strengthened to reap its positive results.

The Indian textile Industry had been plagued by obsolescence, labor problems, raw material vagaries and lack of modernization, Infrastructural bottlenecks in terms of power, utility & road transport. Infrastructure development is the need of the hour as Power and water contribute to nearly 37 per cent of total production costs in the textile industry .The Dearth of this has led to companies investing considerably in their own power supply & water treatment facilities causing substantial cost disadvantage. Infact we have invested substantially in our own Natural gas based power plant and over 20 crores in Effluent treatment plant.

Besides Indian textile Industry does not measure up appropriately to the global competitiveness factors such as cost, quality, and timely deliveries. To enhance competitiveness both categories of factors Internal -like productivity and technology adoption by individual units, and External –like fiscal policy measures, labor policies and infrastructure are important factors to improve in.

Supply Chain Management issues (speed to market) are also prevalent in our industry. Indian textile and clothing industry has one of most complex, fragmented and long supply chain in the world right from raw material procurement to shipping port handling facilities. The average manufacturing and delivery lead time from fabric buying to shipment of apparels comes to 45-60 days and in most cases can extend to 80 days. The mean delay in procurement of raw materials for garments and then exporting finished garments from India is estimated to be 15 -16 days. Since shelf life of fashion driven products is hardly 45 days, such delays are untenable.

Our Industry is affected by the vagaries of demand, supply, climatic conditions, cotton prices, area under plantation and so on. All these factors cripple the process of Long term planning and dynamic decision making based on current realities. Long term strategy making is sometime in alignment with market realities and sometimes not.

Besides another important factor influencing the cotton plantation industry is the availability of subsidy on fertilizers for conventional farming and zero support to organic. Also the support and acceptance given to GM (Bt cotton seeds) has led to more than 80% of cotton farming with GM seeds .Organic farming on the other hand is against the usage of GM because of far reaching environmental implications.

The need of the hour is to extend enough support, resources, and intensive research to develop Organic farming holistically keeping in mind the view of economic and ecological sustenance of our nation.

Marketing for organic cotton-mades been tough during crisis time because most of the larger retailers are reluctant to spend extra for organic cotton products and want them at similar price points as conventional, thus as a result we are challenged to grow organic cotton competitively in the wake of zero support at the grass root level, contamination problems and imminent dangers of GM make organic cotton farming more and more vulnerable.

In a post recession economy the world consumers would have altered their lifestyles and buying preferences in many ways. At macroeconomic level however consumers are expected to continue to save more .They’ll also be looking for deeper meaning to justify purchases so that they’re not consuming just for the sake of it.

Spurred by household de-leveraging, higher savings and a low motivation for spending, consumers are generally inclined to go back to basics, with a penchant for practical, durable and value-for-money products, although quality and product ethics remains critical in the buying process.

I personally feel two polarized consumption classes would prevail and exist simultaneously in the post recession economy. Socially, environmentally conscious ethical and responsible consumption running alongside conspicuous consumption by the Ultra affluent. The financial crisis is said to have widened the gap between the affluent and the “real” rich, haves and haves- mores.

Biggest challenges here would be faced by mid-tier brands and retailers. In this changing consumption landscape retailers that are able to differentiate themselves on the high ethical worth of their environment friendly products would be the ones at a strategic advantage.

Long term vision, commitment towards excellence in product value, manufacturing leadership and innovation, environmental performance and ethical citizenship: the fundamental cornerstones of sustainability are what guide the leadership at Pratibha.

Over last 11 years Pratibha has invested considerably towards Organic farming initiative, Vortex spinning, fiber recycling, water treatment, eco-efficient processing equipments that consume less energy and resources, building and expanding infrastructure centered on sustainable textile production of quality yarns, fabrics and garments- is what help us sustain in the business.

Project Vasudha is a self sustainable initiative founded by Pratibha in 1999, with an aim to expand organic cotton farming culture in India leading the wave of sustainable change through the SEED initiative. Vasudha covers 125,000 acres of organic and transitional cultivation and 28,000 farmers across 250 villages in four states of India certified under the Contol Union, USDA NOP standards as well as the FLO Trade standard. Vasudha is supported by technical supervisors and agronomists who closely work with farmers to improve farming practices by natural means for increased yields with minimum agricultural inputs. Vasudha has been an instrument of holistic change in the words of those living it for a simple reason that it reintroduced social & environmental ethics to an otherwise disconnected, disillusioned & economically impoverished farming population which today enjoys a sustained economic growth .