Interview with Mr. Riju Jhunjhunwala

Face2Face
Mr. Riju Jhunjhunwala
Mr. Riju Jhunjhunwala
Joint Managing Director
Rajasthan Spinning and Weaving Mills [LNG Bhilwara Group)
Rajasthan Spinning and Weaving Mills [LNG Bhilwara Group)

Born in 1979, Riju Jhunjhunwala graduated in Business Management Studies from University of Bradford, U.K. Immediately after graduation, Riju joined the family business formally. Being acquainted with smart business strategies in no time he acquired master hands on managing different business functions like Sales & Marketing, Production, finance, MIS, IT. Under his leadership in export marketing sector the company was poised towards building a strong customer base in the exports market. He focused on meeting customers and different members of the forward supply chain network of the Textiles business and reinforced the strong commitment of the group towards providing quality products coupled with timely deliveries. His efforts has been yielding results since then with exports showing continuous growth not only in terms of turnover (over 40% CAGR for the past 4 years), but also in terms of percentage share of total revenues of the Textiles Business (from 36.24% in 2003 to 45.3% in 2006). In the past some time, RSWM has been able to reinforce its strong branding in the exports market as one of the widest range of offerings in the textiles sector coupled with consistent quality, timely deliveries and value-for-money. Seeing his approach, keen interest in Textiles and fast grasping power, the family ensured a faster graduation of his role to Joint Managing Director. During his marketing stint and interactions with customers and textile industry people, Riju realized the potential of Textiles sector becoming a sunrise industry in India. Hence he had his first major task cutout for him in terms of developing a long term -business plan for the company. Let us share more from this young and dynamic business legend as he speaks to www.fibre2fashion.com

Please tell us how close or far is your company from its goal to be the most admired textile manufacturer in Asia?

"As a textile manufacturer, admiration is required from your different stakeholders like suppliers, customers (fabric manufacturers and garmenters), employees and shareholders. Suppliers/Vendors/Service Providers : Because of the geographical and distributed positioning of our manufacturing plants, we realized that to attract worlds’ best suppliers, we need to develop a system of globally available information of our needs and requirements. Hence we have done a tie-up with Freemarkets for enablement of eprocurement of our requirements. So now at a click of the button; suppliers, vendors and service providers located in any part of the world can get information related to our requirements wit detailed specifications and participate in the bidding process. A complete transparency and fairness have been introduced in the bidding system, enabling the suppliers to know of our consolidated requirements and thus offering their best services at competitive prices. Customers: Our direct customers like : agents/dealers, fabric manufacturers, garmenters, buying houses and trading agencies are now aware of details related to status of the production orders and shipments, helping them in their forward planning. Our integrated software systems has helped in achieving the same. Our consistent efforts on quality systems has yielded in improved quality of products. Also the flexibility in our production systems has helped the organization in moving towards its goal of becoming one-stop-shop for their entire product range requirement. Employees : We taken numerous initiatives towards becoming an employer-of-choice in the textiles industry. Our HR practices are being treated as benchmarks by competitive organizations in the industry. We conduct regular campus recruitments from some of the best educational institutions to fulfill our requirements of skilled manpower. We have a structured process to induct new recruits for smooth transformation. In the last financial year, we took up projects for employee satisfaction and role definitions with the help of Hewitt. In the current financial year, Hewitt is helping us to design roles and responsibilities and build up a performance management system. Some of these exercises are pioneering in the industry. Shareholders : We are continuing with the practice of enhancing shareholder’s value. Our dividend percentage has been consistently improving over the years. This year with the announcement of 30% dividend, our rewards is being considered amongst the best in the industry. The same has been demonstrated by the confidence and faith reposed by the capital markets in our share value. Our share values have risen over 100% in the last one year."

Please tell us how close or far is your company from its goal to be the most admired textile manufacturer in Asia?

"As a textile manufacturer, admiration is required from your different stakeholders like suppliers, customers (fabric manufacturers and garmenters), employees and shareholders. Suppliers/Vendors/Service Providers : Because of the geographical and distributed positioning of our manufacturing plants, we realized that to attract worlds’ best suppliers, we need to develop a system of globally available information of our needs and requirements. Hence we have done a tie-up with Freemarkets for enablement of eprocurement of our requirements. So now at a click of the button; suppliers, vendors and service providers located in any part of the world can get information related to our requirements wit detailed specifications and participate in the bidding process. A complete transparency and fairness have been introduced in the bidding system, enabling the suppliers to know of our consolidated requirements and thus offering their best services at competitive prices. Customers: Our direct customers like : agents/dealers, fabric manufacturers, garmenters, buying houses and trading agencies are now aware of details related to status of the production orders and shipments, helping them in their forward planning. Our integrated software systems has helped in achieving the same. Our consistent efforts on quality systems has yielded in improved quality of products. Also the flexibility in our production systems has helped the organization in moving towards its goal of becoming one-stop-shop for their entire product range requirement. Employees : We taken numerous initiatives towards becoming an employer-of-choice in the textiles industry. Our HR practices are being treated as benchmarks by competitive organizations in the industry. We conduct regular campus recruitments from some of the best educational institutions to fulfill our requirements of skilled manpower. We have a structured process to induct new recruits for smooth transformation. In the last financial year, we took up projects for employee satisfaction and role definitions with the help of Hewitt. In the current financial year, Hewitt is helping us to design roles and responsibilities and build up a performance management system. Some of these exercises are pioneering in the industry. Shareholders : We are continuing with the practice of enhancing shareholder’s value. Our dividend percentage has been consistently improving over the years. This year with the announcement of 30% dividend, our rewards is being considered amongst the best in the industry. The same has been demonstrated by the confidence and faith reposed by the capital markets in our share value. Our share values have risen over 100% in the last one year."

What roles do the group companies play and which are the bouquet of products offered by them?

The group companies offer products diverse from textiles that is graphite electrodes (to used in steel furnaces), power and services (consultancy and Information technology). These companies have been doing pioneering work in their respective areas and growing worldwide to acquire leadership position in their chose areas.

What roles do the group companies play and which are the bouquet of products offered by them?

The group companies offer products diverse from textiles that is graphite electrodes (to used in steel furnaces), power and services (consultancy and Information technology). These companies have been doing pioneering work in their respective areas and growing worldwide to acquire leadership position in their chose areas.

What role has ERP software played in the overall earning of the top and bottom line of your company?

RSWM has been a pioneer in the implementation of ERP software for our textile units. The ERP has been running for some time and has become a way of life. It has helped in improving the tracking of goods across the entire manufacturing life cycle resulting in improvements in financial and inventory management over a period of time. There have been considerable improvements in efficiencies in the manufacturing and logistics. By improving the efficiencies in manufacturing, it has helped in improving our production, thus directly assisting the top line. There has been indirect affect on the top line with better customer satisfaction and timely information about deliveries to customers. With reduced costs and improved utilizations, impacts have also been felt on the bottom line.

What role has ERP software played in the overall earning of the top and bottom line of your company?

RSWM has been a pioneer in the implementation of ERP software for our textile units. The ERP has been running for some time and has become a way of life. It has helped in improving the tracking of goods across the entire manufacturing life cycle resulting in improvements in financial and inventory management over a period of time. There have been considerable improvements in efficiencies in the manufacturing and logistics. By improving the efficiencies in manufacturing, it has helped in improving our production, thus directly assisting the top line. There has been indirect affect on the top line with better customer satisfaction and timely information about deliveries to customers. With reduced costs and improved utilizations, impacts have also been felt on the bottom line.

Gone are the days of the ‘Inspector Raj’ in India. But, what according to you ails the Indian textile industry, currently?

"Though the Inspector Raj in India is supposedly gone, but still a lot of issues related to the Textile industry in India is under the control of the Government and its agencies, either directly or indirectly. Taxes and Duties : Direct and indirect taxes play a direct bearing on the investments and attractiveness of different sectors in the Textile industry. Because of complications in the taxation structures, manmade textiles have been underutilized, when compared to the natural fiber industry. There is a need for rationalization of taxation structures to enable equal opportunities to both natural and synthetic fiber industry. Labour Laws : With the growing business opportunities in textile and garmenting sector, the labour laws need to revisited to ensure a positive approach towards both the employers and employees. Statutory Authorities : The Government needs to minimize it’s touch points with the textile industry in order to ensure minimum bottlenecks in the approvals required for the running of business operations in textiles. Infrastructure : The industry is dependent on the Government for providing minimum infrastructure facilities like : power and transportation. Improved facilities can go a long way in improving the performances on some of the weaknesses like high lead time in the logistics, growing power costs, power fluctuations, etc."

Gone are the days of the ‘Inspector Raj’ in India. But, what according to you ails the Indian textile industry, currently?

"Though the Inspector Raj in India is supposedly gone, but still a lot of issues related to the Textile industry in India is under the control of the Government and its agencies, either directly or indirectly. Taxes and Duties : Direct and indirect taxes play a direct bearing on the investments and attractiveness of different sectors in the Textile industry. Because of complications in the taxation structures, manmade textiles have been underutilized, when compared to the natural fiber industry. There is a need for rationalization of taxation structures to enable equal opportunities to both natural and synthetic fiber industry. Labour Laws : With the growing business opportunities in textile and garmenting sector, the labour laws need to revisited to ensure a positive approach towards both the employers and employees. Statutory Authorities : The Government needs to minimize it’s touch points with the textile industry in order to ensure minimum bottlenecks in the approvals required for the running of business operations in textiles. Infrastructure : The industry is dependent on the Government for providing minimum infrastructure facilities like : power and transportation. Improved facilities can go a long way in improving the performances on some of the weaknesses like high lead time in the logistics, growing power costs, power fluctuations, etc."

How do you foresee prospects of Indian textile exports to reach US $80 billion mark by 2010?

"We feel that the target of US$80 billion in very ambitious, with exports aspect of US$ 50 billion being impractical. There are already news of the downward revision of the textile exports from India to US$ 40 billion. With the growing economy and growing living standards, target of US$ 30 billion for the domestic market is achievable. The same is also true, with the way key large textile manufacturers are lining up for having production bases in India. But to sustain such an ambitious target for textile sector, it should commensurate with production capacities, which should be able to handle such high volumes as required for such a high turnover. The high production capacities will mean requirements of massive infrastructure like logistics (transportation and ports), power requirements and skilled labour. The current textile manufacturing locations are already overloaded and have reached the peak in terms of their capabilities. Improving efficiencies will help, but till achieving high volumes will require identification of new sites and development off these sites in terms of infrastructure. Though there are small signs of the same being created through large textile complexes, but still it requires focused effort on the part of the Government and Government bodies towards ensuring that these become a success. Also the labour laws need to be relaxed to ensure the agility and the flexibility of the organizations in the textile sector."

How do you foresee prospects of Indian textile exports to reach US $80 billion mark by 2010?

"We feel that the target of US$80 billion in very ambitious, with exports aspect of US$ 50 billion being impractical. There are already news of the downward revision of the textile exports from India to US$ 40 billion. With the growing economy and growing living standards, target of US$ 30 billion for the domestic market is achievable. The same is also true, with the way key large textile manufacturers are lining up for having production bases in India. But to sustain such an ambitious target for textile sector, it should commensurate with production capacities, which should be able to handle such high volumes as required for such a high turnover. The high production capacities will mean requirements of massive infrastructure like logistics (transportation and ports), power requirements and skilled labour. The current textile manufacturing locations are already overloaded and have reached the peak in terms of their capabilities. Improving efficiencies will help, but till achieving high volumes will require identification of new sites and development off these sites in terms of infrastructure. Though there are small signs of the same being created through large textile complexes, but still it requires focused effort on the part of the Government and Government bodies towards ensuring that these become a success. Also the labour laws need to be relaxed to ensure the agility and the flexibility of the organizations in the textile sector."

Indian man made fibre industry is beset with major problems. Could you enlist them and suggest remedies for their survival and further progress?

"There are advantages and both disadvantages in the Indian man-made fiber industry. The production capacity in Polyester, viscose and acrylic fibers is growing, but is limited to a few players. Also the production units are more focused towards production of standard products without any emphasis on research & development and preparation of new fiber varieties for targeting niche customers and addressal of their requirements. Also inspite of the population size and low levels of average income, our product mix in textiles show more orientation towards natural fiber as compared to synthetic fibers, which is vice versa in case of other developed and developing countries. It is high time that the textile industry, specifically focusing on manmade fibres (MMF), is given its due recognition. The same could happen if : • Duties on the fibers are altogether reduced to 0% giving it the same playing field as natural fibers. • Manufacturing units in the fiber sector, spend more on research and development by creating new fibers for specific requirements. • Manufacturing units in the fiber sector participate in the marketing and branding exercise along with textile manufacturers, as being done internationally by manufacturers. Also there is a need to create positive vibes amongst the consumers about the advantages of usage of textiles made from synthetic fibers."

Indian man made fibre industry is beset with major problems. Could you enlist them and suggest remedies for their survival and further progress?

"There are advantages and both disadvantages in the Indian man-made fiber industry. The production capacity in Polyester, viscose and acrylic fibers is growing, but is limited to a few players. Also the production units are more focused towards production of standard products without any emphasis on research & development and preparation of new fiber varieties for targeting niche customers and addressal of their requirements. Also inspite of the population size and low levels of average income, our product mix in textiles show more orientation towards natural fiber as compared to synthetic fibers, which is vice versa in case of other developed and developing countries. It is high time that the textile industry, specifically focusing on manmade fibres (MMF), is given its due recognition. The same could happen if : • Duties on the fibers are altogether reduced to 0% giving it the same playing field as natural fibers. • Manufacturing units in the fiber sector, spend more on research and development by creating new fibers for specific requirements. • Manufacturing units in the fiber sector participate in the marketing and branding exercise along with textile manufacturers, as being done internationally by manufacturers. Also there is a need to create positive vibes amongst the consumers about the advantages of usage of textiles made from synthetic fibers."

On global level, how do you read India’s chances against China and what can probably bridge the rising divide in market share within the textile industry?

"China has taken major advantage of the post quota regime because of the control that it has been allowed to exercise over the key parameters of production. The Government has also supported by ensuring the availability of required infrastructure. Chinese manufacturing model has been more oriented towards bulk manufacturing at lower cost and consistent quality. They have built up huge manufacturing capacities in textiles anticipating the boom. Because of the implementation of quotas by US and EU and the possible steps by other countries like : South Africa, towards implementation of quotas of specific product categories on Chinese Textile, there has been a capacity restriction on the Chinese manufacturing. Internally Chinese government is distribution quotas to different manufacturers for a premium, resulting in reduction of margins. There have also been talks of appreciation of Chinese currency with respect to the basket of foreign currencies because of the huge trade and current account surplus. All the above factors have resulted in the Indian textile industry acquiring shine and tremendous interest. Indian textile Industry is addressing specialized markets with smaller lot runs and better quality. Also there is an increased interest among Western textile companies to develop manufacturing capacities in India."

On global level, how do you read India’s chances against China and what can probably bridge the rising divide in market share within the textile industry?

"China has taken major advantage of the post quota regime because of the control that it has been allowed to exercise over the key parameters of production. The Government has also supported by ensuring the availability of required infrastructure. Chinese manufacturing model has been more oriented towards bulk manufacturing at lower cost and consistent quality. They have built up huge manufacturing capacities in textiles anticipating the boom. Because of the implementation of quotas by US and EU and the possible steps by other countries like : South Africa, towards implementation of quotas of specific product categories on Chinese Textile, there has been a capacity restriction on the Chinese manufacturing. Internally Chinese government is distribution quotas to different manufacturers for a premium, resulting in reduction of margins. There have also been talks of appreciation of Chinese currency with respect to the basket of foreign currencies because of the huge trade and current account surplus. All the above factors have resulted in the Indian textile industry acquiring shine and tremendous interest. Indian textile Industry is addressing specialized markets with smaller lot runs and better quality. Also there is an increased interest among Western textile companies to develop manufacturing capacities in India."

Could you throw some light on VAT implementation and its implication on the Indian textile industry?

VAT would have different implications for different stakeholders in the entire textile value chain. The large manufacturers will have very little direct impact, as they were already in line with the statutory taxes. The small manufacturers will get affected, as their coverage in the statutory tax collections was minimal and restricted. The prices of the products manufactured by small manufacturers will get affected, resulting in their competitiveness with the products of the large mills. Initially the consumer may have to pay slightly higher, but the same is expected to be compensated by better quality and lower rates in the long run (through focused and sustained efforts towards improved efficiency and productivity)

Could you throw some light on VAT implementation and its implication on the Indian textile industry?

VAT would have different implications for different stakeholders in the entire textile value chain. The large manufacturers will have very little direct impact, as they were already in line with the statutory taxes. The small manufacturers will get affected, as their coverage in the statutory tax collections was minimal and restricted. The prices of the products manufactured by small manufacturers will get affected, resulting in their competitiveness with the products of the large mills. Initially the consumer may have to pay slightly higher, but the same is expected to be compensated by better quality and lower rates in the long run (through focused and sustained efforts towards improved efficiency and productivity)

Indian Budget is round the corner. What are your expectations there from, particularly in the context of the Indian textile industry?

Indian Budget presented in the first quarter of 2007, has been favourable and has nearly met all the requirements of the Indian Man-made Textile Industry.

Indian Budget is round the corner. What are your expectations there from, particularly in the context of the Indian textile industry?

Indian Budget presented in the first quarter of 2007, has been favourable and has nearly met all the requirements of the Indian Man-made Textile Industry.

What does the future hold in store for RSW Mills?

We have realized that post MFA, India is going to become a major textile hub and there is a possibility of Indian players achieving global scales. To become one, we are focusing on consolidation of our existing capacities, identifying areas of weaknesses as an organization (like power, etc.) and also identifying opportunity areas for growth like denim, etc. We are always on the lookout for new areas, where Textiles industry can add vale to the economy. To ensure this, we are building up research and development activities to bring out focused applications of textiles to specific needs of selected customer segments.

What does the future hold in store for RSW Mills?

We have realized that post MFA, India is going to become a major textile hub and there is a possibility of Indian players achieving global scales. To become one, we are focusing on consolidation of our existing capacities, identifying areas of weaknesses as an organization (like power, etc.) and also identifying opportunity areas for growth like denim, etc. We are always on the lookout for new areas, where Textiles industry can add vale to the economy. To ensure this, we are building up research and development activities to bring out focused applications of textiles to specific needs of selected customer segments.
Published on: 24/07/2006

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.

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