The slowdown in emerging economies is due to increase of labour cost in China and plummeting oil prices.
SVP Global Ventures is a diversified yarn manufacturing company focusing on quality and distinction with continuous customer-driven innovation. Chirag Pittie, managing director, SVP Group, discusses the company's recent expansion strategies.
Please share details about your new plant in Jhalawar. What is the production capacity?
SVP Global has successfully commissioned a fully automated plant of 1,00,000 spindles in Jhalawar district of Rajasthan. It has a manufacturing capacity of 22,000 tonnes per annum and is spread across 25 acres. This plant has been commissioned in record time and is one of the fastest completed textile plants, constructed in just nine months. The plant will consume almost 25,000 MT of cotton annually. After the completion of this project, SVP Global's capacity will increase to 1, 98,000 spindles. The plant will produce high quality compact yarn of count 2 to 60.
What is your business strategy? Who are your buyers?
The company has built reputed brands like DG TEX/SVP/SVRP in the yarn market. They enjoy a good standing. SVP has strong expertise in sourcing best quality raw materials leading to higher quality yarns. Our management team is run by several experienced professionals who have a good hold over both the domestic and export textile market. From our new plant, we will be manufacturing combed compact yarn, which sells at a premium in the market and commands higher margins. Our clients are weavers, traders and also the open market where there is healthy demand for the quality and count of yarn we will be manufacturing. We are confident of being able to sell all of what we make and our new project will run at maximum utilisation within a few months of commission.
What is new about your yarn? What are the latest innovations?
We will be manufacturing cotton combed compact yarn at our new plant in Jhalawar, which is a premium yarn. Compact yarn is a value added product with low hairiness, high strength and lustre and better elongation properties with significant advantages in downstream processing.
How much employment will be generated with this plant?
The project will employ over 500 people directly. Since the plant will consume almost 25,000 MT of cotton annually, it will provide a stable source of livelihood to more than 30,000 farmers.
How much have you invested? Is there any modern machinery you use?
The project cost for this plant was approximately ? 450 crore, which was funded in a 60:40 debt to equity ratio. The plant will be fully automated with the most modern technology from blow room to winding. The entire plant and machinery have been selected from state- of-the-art machineries from reputed global companies like Rieter (Switzerland), Electro-Jet (Spain), LMW (India) and Schlafhorst (Germany).
For every bale of cotton and at all stages of the production process, the yarn will be tested in the world class quality control lab equipped with latest technology and quality control practices using testing machines by Uster (Switzerland). We aim to achieve the highest quality standards. Consistency in yarn quality parameters like yarn evenness, hairiness, strength and classmate value will be tested and monitored by Loepfe (Switzerland). Finally, each cone passes through the ultra-violet room to detect shade variation. Other equipment like link coners, auto-doppers and bobbin transport system have been deployed to increase the efficiency and reduce the operational cost of the plant.
What is the budget allocated to R&D?
The company has infused approximately ?10 crore in setting up a world class laboratory at our new facility.
Which are your best markets? What is your revenue mix for other plants?
The domestic market in India is strong for the textiles industry and has been growing steadily. The export market has grown in the last few years and India has started to export yarn in quantity. We have a strong foothold in the domestic market, although we also plan to export what we make in Jhalawar.
Is this the second project under the Resurgent Rajasthan programme?
We are privileged and fortunate to be one of the first investments to fructify under the Resurgent Rajasthan programme, held on 19 November 2015. Projects like ours will help the Rajasthan government generate sustainable employment. As part of the package, we have significant advantages like interest subsidy, VAT benefit and electricity duty rebate. We were fortunate to get TUF window benefits, now closed, for spinning projects.
How can you claim this is the world's fastest constructed textile plant?
Typically, integrated spinning projects like this take around 1.5-2 years to complete. The company has set up this project in just nine months, making its construction one of the fastest.
What outlook do you see for the textile sector?
The textile industry is one of the high priority sectors of the Indian economy. It is the second-largest provider of employment after agriculture, directly employing over 35 million people. It has witnessed phenomenal growth in recent years and has attracted a fair amount of foreign direct investment (FDI). The Indian textile industry has an overwhelming presence in the economic life of the country. It is the second-largest textile industry in the world after China. Timely policy intervention by the government will boost competitiveness of this sector as the growth impetus is vibrant. The government's Make in India campaign will bolster domestic as well as export growth.
What macro environmental factors affected the global yarn industry and its growth last fiscal?
Some of the factors were the slowdown in emerging economies attributed to free falling of commodity prices, rebalancing in China, increase of labour cost in China, plummeting oil prices, and challenging macro-economic factors. With a push to the Make in India dream and rising global consumption including strong domestic demand, the yarn and textile industry has a bright future.
Please share some information about your textile plants in other parts of the country.
Our initial manufacturing facilities are located at Ramnad, Coimbatore and Palani in Tamil Nadu where we manufacture cotton yarn, compact yarn, citra yarn, poly-cotton blended yarn and open-end yarn. These facilities are located in close proximity to each other and near major raw material and textile hubs. The total installed capacity of these three units is 98,000 spindles. These manufacturing units make yarn of count ranges 6 to 70. The company employs over 700 people across these plants.
