India should focus on providing more value to customers
Lectra is a leading integrated technology solutions provider of software, CAD/CAM equipment, and associated services specifically designed for industries using fabric, leather, technical textile and composite materials to manufacture products. Daniel Harari, CEO, Lectra, discusses the growth story and achievements of the company.
What has been the growth percentage during the last few years and for 2015?
The growth percentage of Lectra revenues during the last five years is 11 per cent. For the last fiscal year, the growth percentage of Lectra revenues corresponds to 4 per cent.
Which are the main areas pushing Lectra's growth?
Five accelerators will drive Lectra's growth. These include emerging countries, with the industrial revival in the United States of America and other developed countries; the automotive market, an industry currently experiencing far-reaching technological and geographical change; the leather market, thanks to the revolutionary new range of Versalis automated cutters; PLM for fashion and apparel offering collaborative solutions facilitating collection management; and, finally, 3D technology for fashion and apparel, the new universal product development solution.
Of the eight economies forecast to account for half of global growth in the current decade, China alone is expected to represent a third of potential growth in Lectra's activity over the next two years and into the medium term, followed by South Korea. Looking further ahead, Brazil, Mexico and Turkey-where Lectra already holds a strong position, but where the current economic situation is difficult-are expected to increase their contribution.
The main contribution from developed countries will come from the United States of America, Germany, Italy and France, gradually picking up momentum in the medium term.
The automotive market's share is expected to increase further, under the combined impact of expanding markets in emerging countries, the rising proportion of leather-upholstered car interiors, and the growing use of airbags in 2015-2016 as well as in the medium term. Growth in the leather market will be essentially concentrated in the automotive sector, with slower uptake of new technologies in the furniture and fashion markets.
In the fashion and apparel markets, market globalisation, the rise in consumption in emerging countries and in internet sales are all expected to boost sales of PLM software in coming years. On the other hand, adoption of 3D technology could proceed more slowly than forecast, but will pick up in the medium term. This technology represents an unavoidable revolution for businesses, which will prompt a radical rethink of their development methods so that they can take full advantage of the benefits it brings.
What can be done to boost development within the apparel and fashion industry?
Innovative cutting room, PLM and 3D technology are three keys assets to support fashion and apparel manufacturers' growth.
What critical steps need to be taken to ensure India does not miss the bus to become the next textile giant?
We would like our Indian customers to focus on providing more value to their customers and developing a long-term strategic plan, rather than reducing costs. To achieve these goals, they should rely on innovation and technology. In India, Lectra has created interest among premium customers who can see the benefits of using technology and can take the market to the next level. Lectra provides the best value for money, quality and productivity. We believe in the Indian market but compared to other countries like China, there is still a gap. This gap will only be bridged if Indian manufacturers understand the value of innovated technology. Basic technology with lower investments are cheaper, but very often, at the end what first appeared to be cheaper becomes more expensive.
What challenges has the company come across in the past five years?
Accentuating Lectra's technological leadership and the high value of its product and service offer; strengthening its competitive position and its long-term relationships with customers; accelerating organic growth; boosting profitability by regularly increasing the operating margin; and generating free cash flow in excess of net income thus self financing its future growth were Lectra's main challenges during the last years.
What have been the major achievements at Lectra in the last five years?
During the last five years, Lectra has renewed its offer, bolstered its premium positioning, increased its lead over competitors and won market share. Last but not least, the acceleration of the company's transformation plan has enabled it to prepare for new challenges in the post-crisis economy and seize resulting opportunities.
What has been the biggest highlight in the last year at Lectra?
During 2015, Lectra continued to invest strongly in technology. Thanks to its strong investments, Lectra has been able to go a step further in terms of innovation by launching, for example, new versions of its Lectra Fashion PLM solution and Diamino Fashion, its marker-making solution, both dedicated to the needs of the fashion and apparel companies. Combined with reinforced business expertise and change methods based on Lectra's 40 years' experience in the fashion and apparel industry, Lectra was, in 2015, the perfect partner of fashion brands and retailers who wanted to meet the challenges of today's fashion market and remain competitive.
What targets have you set?
Our target is to increase our leadership, become a two-digit growth company and develop a SaaS offer.
20230103183907.png)
