China is no more the cheapest sourcing destination, so as India.
With Fibre2Fashion Correspondent Cindrella Thawani, Manish Mandhana opines about the global volatility of weather, which is adding woes to retailers. Further, he says that inflation is the biggest challenge for Indian economy.
Synopsis:
Mandhana Industries Ltd is a major textile entity in the country’s western region, since three generations. Today, it has 12 manufacturing facilities - five factories at Tarapur, five at Bangalore and two upcoming units at Baramati.
Manish Mandhana serves as the Jt. Managing Director of Mandhana Industries Ltd. Besides, he has been awarded by CNBC TV 18, for outstanding exporter of the year 2008-2009, at international trade awards.
Further, achieved ‘Niryat Shree’ by Federation of Indian Exporters Organization (FIEO) in 2004-2005 and 2008-2009 for stellar performance in exports as well as achieved Gold Trophy by FIEO for remarkable growth in exports for the year 2003-2004.
Moreover, he has taken initiative of venturing into the retail foray by signing an exclusive agreement with ‘Being Human – The Salman Khan Foundation’.
Excerpts:
Recently, you have entered into a commercial pact with Dubai based retail giant Landmark Group and being an exclusive global licensee for ‘Being Human’ Salman Khan owned apparel brand. How do you see its growth opportunities, globally (in terms of retail market) and how do you see its response in middle-east?
The growth opportunities that we foresee for Being Human are bullish. Moreover, response that we have received from all the markets where we have entered include France, Belgium, Spain in EU as well as 10 Gulf Cooperation Council (GCC) countries in the Middle East, have been encouraging.
Apart from the obvious association with Salman Khan and his star power, the product that we are offering is being widely accepted and appreciated for its design, quality and price. In fact the response that we have received at the launch in Dubai surpassed our expectations and was overwhelming.
Within 25 days of its launch, the brand registered 85 percent sell-out, that itself says a lot. Now, there is an immense pressure and anticipation from us to launch the women’s and the kids wear lines in succession and make Being Human a complete wardrobe solution brand.
How do you see the export scenario, globally and where do you see the potential market for it? Moreover, presently you are catering to which international brands?
Europe, which is our main market, is cautious and even struggling at the moment. We see this sluggishness to continue for a while.
Today, we are competing not only with China but also with Bangladesh, which owing to various favorable reasons has become the world’s factory. China is no more the cheapest sourcing destination, so as India.
In the past few years, China, owing to its surging economy has become expensive sourcing destination as us.
The silver lining in cloud is that in India, textile is a sunrise industry, whereas in China it is the sunset point. Even in this current scenario, with our activeness in service, and aggression in marketing as well as innovation in product, we are hoping to stay on track on the export front.
How do you see recent depreciation of INR against dollar as a challenging or an opportunistic aspect for the Indian textile industry?
Depreciation that we have been seeing in the INR against the US dollar is a challenge that we are facing. The rising import costs of oil and other commodities will definitely add up to our already steadily increasing input costs at all levels. However, this does give us an opportunity to be more competitive in the global markets.
How do you see the purchasing sense in overseas market? Accordingly, in which regions you will be catering as well as which regions you believe can give well-built consumer connection?
As I mentioned earlier, the mood overseas is somber and cautious. The unpredictability of weather around the world has added woes to retailers and consumers alike. At the moment we intend to keep the focus on the European Union, which has been our market for exports.
The domestic market is where we will concentrate on with our retail venture. We intend to start with the Metros i.e. Mumbai, New Delhi, Bangalore, Chennai and Calcutta.
Further, we will then move inwards by taking it in the mini metros like Ahmedabad and Pune and then the Tier-1 and Tier-2 cities.
What is your outlook for the green foot-print? What are those measures that you are undertaking for it?
We are aware of the environment, today we live in and making our footprint green, which is our conscious and consistent endeavor.
We promote organic textiles and products among our clients, and also through our brand Being Human, a part of which is also in organic cotton. Besides, we are using recycled and recyclable material for packaging.
Our plants engaged in wet process of textiles that comes with individual effluent treatment plants. Apart from this, we choose most energy efficient machinery, technology and process available in the market today. In fact, our new garment manufacturing unit in Tarapur, is designed and constructed as a green building and is up for LEED certification.
Besides, which age-group T-shirts are you targeting and how do you see its market in semi-rural and urban regions? As it is a charitable foundation, consequently what should be the entry price of its T-shirt?
At the moment, Being Human target consumer is aged between 20 to 40 years for the Men's line. Aiming at complete wardrobe solution, we are offering denims, chinos, shorts, shirts, t-shirts, knitwear, outerwear, belts, caps and innerwear.
We look at the semi-rural market with a lot of interest, owing to the tremendous following that Salman Khan has, which is arguably more loyal compared to the urban regions.
We will take the brand to these semi-rural regions in due course through the franchise model.
Charity is an intrinsic part of any Being Human product; hence every piece of merchandise is contributing to the cause. We have kept the entry price of a T-shirt at INR 699.
Furthermore, what challenges do you foresee in the current scenario?
Inflation, by far, is the biggest challenge that I see in Indian economy is struggling with. We have not been able to bring it under control to a manageable level.
The India shining figures of 8.5 to 9 percent year on year annual growth in GDP are set to dip to the levels of 6 to 6.5 percent. And, this with the bad monsoons is surely going to dampen the mood. However, consumer spending will reduce.
Please apprise us further expansion plans of Mandhana Industries.
We have two more capacities coming up in garment manufacturing, one each in Tarapur and Baramati that should be operational by this year-end and mid- next year, respectively.
The major expansion, however will be seen in our retail venture. Here, we plan to open 10 exclusive Being Human stores by FY 12-13. Apart from this, we will also start trading from 30 shop-in-shop formats from the likes of Shoppers Stop, Lifestyle, Splash and Jade Blue stores. This will be notched up to about a 130 selling points within a year. We will also get into online sales with Being Human.
What is your overview for the revenue of FY 2012-13?
With the launch of Being human as well as our new capacities starting commercial operations, we are targeting a total top line of about 13 billion INR, with a bottom line of about 900-950 million INR.
Your current plants are running with peak capacity. How are you amplifying your position? Besides, how much you have outsourced?
We have just finished expanding our capacities in the weaving and textile processing sectors and that seems adequate for the moment. In the garment manufacturing sector, however we are outsourcing about 20 percent capacity.
