The Indian denim has been growing steadily at the rate of 10-12% every year.
Arvind Mafatlal Group is a family run business that traces its roots to 19th century when its founder Mr Mafatlal Gagalbhai -son of a weaver, learning trade at young age of 31 years jointly founded the Shorrock Mills in 1905 with his friends Chandulal Mahadevia and an English man Arthur Shorrock. Of the initial equity capital of Rs 3.25 lakhs, Mr Mafatlal picked up 30 shares of Rs 1,000 each while his father picked up another 30 shares. The first mill did extremely well, and soon in year 1912 another New Shorrock mill was established. Four years later, as the zest to do something of his own materialized in 1916, Mr Mafatlal bought Jaffer Ali Mill and started operations under renamed banner of Surat Cotton Spinning & Weaving Mills. Three years later, Mafatlal came to Mumbai taking over the China Mill. It is in the 1970's and 1980's that the existing business was consolidated. The Group also diversified into Information Technology, Chemicals & Engineering Industry. The late 1980's saw the Group further diversifying into the Financial Service Industry, Gas Distribution and later into Healthcare business. From 1995 onwards, the strategy has been to focus on the core competence viz. Textiles and Chemicals and divest from other businesses. Mr Hrishikesh Mafatlal who inherited enterpreneurship in blood being the great grandson of Mr Mafatlal Gagalbhai, is the Vice-Chairman and Chief Executive of the Arvind Mafatlal Group of Companies (AMG). Mr Mafatlal has an Honors Degree in Commerce (1975) from the Sydenham College, Mumbai. In 1993, he attended the Advanced Management Programme (AMP) at the Harvard Business School, USA. He is a past President and now a Managing Committee Member of The Mill owners’ Association, Mumbai (MOA). He is a Governing Council Member of the N. L. Dalmia Institute of Management Studies & Research. He was a Member on the Board of Governors of IIM Ahmedabad for 12 years (1995 – 2007), and was Vice Chairman of The Cotton Textiles Export Promotion Council (TEXPROCIL). He is a Trustee of Shri Sadguru Seva Sangh Trust as well as BAIF Development Research Foundation. Mr H Mafatlal, in a one to one with Ms Madhu Soni, Sr Editor & Correspondent- Face2Face, shares a deal of information on global denim and world market of Uniforms.
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.
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.