Interview with Mr Ved Prakash Chiripal

I made a humble beginning in Ahmedabad with few powerlooms in 1972. Today, Chiripal Group of Companies, with turnover of over US$ 325 million (Rs 1500 Crore) has acquired an eminent position in India as integrated textile house focused on delivering the best products by continuous R & D, defined processes, stringent quality policies and state-of-the-art technologies.

Thanks to my long time associates and colleagues and especially the successive governments and people of Gujarat, who gave me conducive environment and walked with me to buildup a world class business conglomerate.

The manufacturing facilities in my group are supported by dedicated, experienced and competent experts to ensure that the products or services delivered to the customers are the best. We are in diversified business in the fields of petrochemicals, spinning, weaving, knitting, processing, chemicals, infrastructure, realty and education which offer employment to more than 20000 people associated directly or indirectly with the Group.

The global textile industry, in fact has not yet come out of catastrophic recession that has majorly affected Europe and USA- the biggest consumption markets for textiles. Unless, these markets show some positive sign and come out of recession, the textile industries in several countries like India, Bangladesh, Pakistan, and Vietnam are sure to suffer. However much we say that we have alternative markets like Latin American and African countries, the fact is that USA and Europe have very large consumer base, who change their wardrobe with change of fashion and season. Consumers in other part of world use a pair of garment for many years. Indeed, we await turnaround in US and Europe to revive demand for clothing, textiles and other consumer goods. In actual sense we will see the dawn for global textile industry consequent to economic turnaround in USA and Europe.

Very recently we have seen that PIIGS countries viz Portugal, Italy, Ireland, Greece and Spain are in problem as their GDP is no match to their mounting debts and they are on the verge of Bankruptcy. Dubai, a major commercial hub has been saved for time being with the positive intervention and support of Abu Dhabi. I do not foresee the early recovery or revival in Europe. In US also the figures are not very positive to indicate the turn around to be in near future. Thus, I presume it will take at least a year to initiate recovery in economy.

Indian market has witnessed slow down, not recession. The growth rate which was 9 percent has slowed down to 6 percent. There was supposed to be liquidity crises due to global recession, but that has been overcome by the stimulus packages generously provided by the Government. However it seems that the liquidity created by the stimulus packages has largely gone into realty sector or stock market generating a sense of turnaround and resulting in high inflation.

The Indian textile sector is reeling with high prices of basic raw materials viz polyester and viscose due to almost monopolistic production base and effect of anti-dumping duties on imported raw materials. The problem compounded with setting of high MSP for cotton and inclusion of cotton in futures trading. The survival of Indian textile industry has a lot to do with substantial fiscal stimulus and generous monetary policy. Lower interest rates regime has supported domestic demand which has helped market to sustain till now. If some problem occurs in financial or realty sectors or the fiscal stimulus is withdrawn pre-maturely, the textile market may crash because high priced raw materials would not able to sustain the profitability of Indian textile companies.

To boost up the industry performance, the GST regime should be introduced from April 1 2010 as announced in last budget. Although difficult, the move will benefit the trade immensely. Looking at the energy crisis in India, the Government should allow duty free import of coal for all thermal plants, captive or grid suppliers. In export sector, the exemption in service tax should be extended to all services identified for the export sector to do away with the vexatious refund mechanism.

As far as infrastructure is concerned, India has developed the road network, ports, telecom etc significantly during last decade. Besides, the government has come out with SEZ and Textile Parks policies. Though, the long term effect of these developments has to be seen in years to come, but I am very positive about it, as the concept is very good and government is very earnest in its dealing in this concern. We have also set up a textile park - Vraj Integrated Textile Park in Ahmedabad which is expected to provide employment to almost 2000 people.

Beside that, the technical textile field is very lucrative as till now, India does not use technical textiles much. I see a lot of opportunities in this sector. We need to promote and have a legal frame work in place for mandatory use of technical textiles in several key segments. For example, the upholstery and furnishing fabrics used in malls, cinemas, transports and public places should be flame retardant and of such specialty performance fabrics. This all can give a boost to technical textiles. There has to be willingness on the part of Government and awareness on part of people. Safety awareness should be the prime concern now, and in that context we should start working in that arena. It is true that we cannot change things in one day but it has to be started gradually and Government support is very essential to bring up this sector

Keeping up the trend of broadening our avenues in value added segment, we have launched our lifestyle apparel brand 'ConneXions'. Though we have made a small beginning in Retail with 17 exclusive outlets as of now, but in future we wish to go aggressive as retail is very lucrative market. Moreover, being in the group where we have complete value chain, it makes sense to us to go for retail vertical too. Our garments are of high quality and we are able to offer the Indian consumers the value for money.

Our Group has sought ‘value for money’ as our main strategy for apparel retail under ConneXions brand. We have also launched organic and hi-end garments on offer under CXN brand. But then, these hi-end garments have market in A+ metro cities. We are also focusing on B, B2 category i.e. small town and small cities where consumers under influence of TV/media are getting brand conscious. And, there comes aspiration factor i.e. they aspire to look good or fashion updated. So we are targeting the segment in 17 – 35 years age group segment who have aspiration factor involved in spending behavior.

VITP basic infrastructure is ready and around 35 companies will be establishing their production units for different kind of textiles. Already one company has started its production of wrap knitted fabrics. 6 to 7 companies are building units and installing their machines. We expect total investment of over 1000 crore in VITP which will provide employment to more than 5000 people directly or indirectly. The project is shaping up very well and I am sure, in coming times, VITP is going to bag up lot of glory for Chiripal Group.