What is the synergy that you have with cotton farmers? What process do you follow when you are sourcing cotton?
Most of our units consume farm-produced cotton as a major raw material, and the units are situated in places where you have many farmers directly interacting with our unit staff. Hence, we work very closely with each other, sharing crucial information with regard to increasing yield and quality of cotton. Shortly, with CITI CDRA, we will be working to enhance output of cotton fields by an innovative technique using high-density plantation for selection of cotton varieties, informing the farmers what cotton should fetch good prices in the coming season, and the best possible manner to grow and harvest such cotton.
The process followed in sourcing cotton is that wherever farmers innovate on cotton produce like BCI or Organic, we may give a lot more than the increase in cost encumbered by taking such a step. This way, farmers are becoming more interested in developing these niche varieties for us.
How has the growth story been at Gimatex for both exports and the domestic market? What is the targeted percentage growth for the next two years?
The growth story for Gimatex has been phenomenal owing to our integrated approach and insightful day-to-day management. Since our locations are more suitable for the domestic market, we remain more competitive in the domestic arena. Just to share some basic information, we have been able to double our sales in the last three years, and we expect to further double it in the coming two years. Recently, we have been allotted a textile park for future growth, which offers several benefits over any green-field expansion.
What are the key benefits offered in this new textile park? Can any new entrepreneur be a part of it?
With the intention to provide more jobs and a ready market for our farm products, both the Central and state governments have offered some exciting schemes for our new textile park situated in the heart of the country. I strongly believe this is the best possible place for anyone to make a new investment in textiles. Since it is a cluster approach, anyone, both domestic and foreign companies, are welcome. The benefits offered for new investment in the park include:
o Reasonable value of land, common infrastructure and common utilities for usage
o Reduced capital requirement ranging from 50 per cent to 75 per cent owing to availability of common facilities and infrastructure
o 10 per cent to 25 per cent capital subsidy on the investment depending on the project
o Interest on term loan in the range of 2 per cent or less for the full period of loan
o Power cost to be approximately Rs. 4.5 per unit
o All government compliances and liasioning in place including pollution, boilers, labour, factory inspector, electrical etc.
o Vat refund for minimum seven years from 60 per cent to 90 per cent of the Vat amount input/output depending on the investment involved.
o Assistance for banking facilities, recruitment, information technology networking, training and development, R&D, quality assurance, marketing.
o Situated right in the middle of the country, it offers comfortable access to all parts of the country through roads (1 km from National Highway 7), trains (3.5 km from railway siding) and airplane (68 km air cargo). With GST on the anvil, this will be a huge advantage.
o The area has ample availability of labour, power, water.