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SMEs but big achievements!
Jul '08
Indian textile industry, one of the highest foreign exchange earners experienced a tough time through out the year 2007 due to rupee appreciation. Even big players in the regime had struggled hard to avoid the burnt of rupee appreciation.

However, on the other hand, Small and Medium Enterprises (SMEs), which contribute a major share in India's growth, were left unaffected by the rupee appreciation last year. This is quite evident from the fact that even statistical data shows companies with earnings less than Rs10 billion grew the fastest during last year.

Shri Lakshmi Cotsyn Ltd, an integrated multi product and multi market player covering almost all the activities of textile value chain, is a true example of the above statement.

Fibre2fashion got in touch with Mr Rakesh Kumar Srivastava, Company Secretary cum Finance Controller, to know the secret behind such success when other textile players are reeling under the impact of strong rupee.

In this regard, Mr Srivastava disclosed, “Diversified product portfolio provided a better revenue mix to the company and derisk its business model; value added segments helped in boosting up margins of technical textiles and garment manufacturing. Further our foray into retail marketing segment and diverse and long standing customer relationship helped us to stand tall throughout this adverse time.”

“To maintain such success quotient, obviously we had to adopt some strong strategies”, says Mr Srivastava. “In addition to this, various other expansion and diversification projects are on the card to maintain the current pace of growth. We have plans to expand our Terry Towel Capacity by 12000 MT per annum, then foray into retailing will facelift the brand, venturing into smart textiles with the use of nano technology, will enhance our position further.”

Talking about the depreciating Dollar and its effects on the company, Mr Rakesh stated, “Our Company is not significantly affected by devaluated dollar because approximately 85 percent of sales are in domestic market.”

Stating about India's stand in the international market, the Company Secretary opined, “Because of the uniqueness of its positioning, India enjoys various advantages compared to other countries. Low labor cost, easy availability of raw material, extensive domestic demand due to high population and growing per capita income, and most importantly Government supports including subsidies to boost textile industry like TUFS, Capital Investment Subsidy and other Fiscal Benefits are few of them.

When asked about suggestions for those struggling hard to tide over rupee appreciation and rising cotton prices, Mr Rakesh Kumar Srivastava smiling said, “Well, I would rather advice, stress more on domestic market in place of exports, if possible billing in double currency viz. Dollar / INR if the buyer has Indian office; try to put a price escalation clause in agreement with buyers and not to forget, diversification or expansion should be done in accordance with the domestic or international demand.”

Even in the ongoing year, SMEs are expecting to paint a rosy picture. According to a survey, most of the SMEs anticipate a better performance to keep up with the positive economic outlook.

Fibre2fashion News Desk - India

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