GST might help in future, but it's eroding capital
PG Silk Mills Private Limited had a humble start with a hand-dyeing unit. Today the company manufactures and exports nylon, georgette, chiffon and cotton fabrics. Next gen owner Gagan Gulati gets candid about Surat's textile industry post-GST and discusses the expansion of their product portfolio.
Tell us about the journey of your company. How did you come to start your company, who are the founders, the initial seed money, and the milestones achieved?
Our director, Pammy Gulati, started his humble journey at a very young age. He used to deliver goods on a cart, but his passion for researching fabrics was ingrained into his system. Slowly with the money that he had saved, he started a small hand-dyeing unit. After much hard work and networking, he became an export agent. He was known for developing new products for exporters. After gaining immense knowledge of the trade, he ventured into manufacturing. He always took risks beyond his means, but he proved successful time and again. That is how PG Silk Mills came into existence. With expansion, he needed a helping hand; that's when I came in. Our team had produced fruitful results, and we have taken PG Silk Mills to soaring heights.
What is the global market size for woven fabrics? What is the expected growth by 2020?
The global textiles market is expected to reach approximately $1,237.1 billion by 2025, according to a new report by Grand View Research, Inc. Rising disposable incomes, urbanisation and growing population in emerging economies including China, India and Mexico are expected to play an important role in improving the lifestyle of consumers which in turn will drive the demand for textile products. Product innovation is expected to have a positive impact on the industry; for instance, the Runway of Dreams brand launched by Tommy Hilfiger in February 2016. With government support coming in to promote investments, the demand for textiles is expected to increase in the near future, what with the growing number of fashion retail outlets and supermarkets in developing economies, including China and India.
Is Surat still reeling under GST or has the industry recovered? Which section is the most affected?
Hit by recession, textile businessmen in Surat have urged the Union textiles minister to review the situation in the aftermath of demonetisation and the roll out of goods and services tax (GST) and intervene to turn around the situation. They claim that the production of fabrics has dropped from about 4 crore metres per day (before demonetisation) to about 2.5 crore metres per day; the number of working embroidery machines has fallen; and the demand for new shops has also dropped. FOSTTA claimed that the sales of local textile traders have dropped by about 30-40 per cent and payments have been delayed. Falling earnings have resulted in traders shifting to low rent shops and the demand for new shops have dropped. Those who had availed of loans are finding it difficult to honour their EMIs. In one of the notes, FOSTTA said that post-demonetisation, the number of embroidery machines had dropped by 1.25 lakh, 89,000-odd powerlooms have been sold at the price of scrap; exports are on a continuous decline; and women working in embroidery units have become jobless. It's not a particular section that we can say that has been affected; it's the whole vertical chain of textiles that has experienced the brunt of GST. Maybe, GST might help in the future; but it's making a big impact on our present by eroding our capital, which will affect our future.
What is the annual production of fabrics at your units? What percentage of the production is for domestic and what per cent is exported abroad?
The annual production at our unit is 1,00,000 metres per month. We supply 30 per cent of our production domestically, and the rest is exported.
Which are your top-selling products?
Our best-selling product is Nazneen Dupatta, which is used by manufacturers of indutvas or salwarchuridar suits for women. We also sell large volumes of inner fabrics- used again in indutvas-which is well known in Punjab.
Where do you source raw materials from?
We source our raw materials from yarn companies; we make fabrics out of yarn at our factory.
Which are your major markets for nylon, georgette, chiffon and cotton fabrics?
Our major markets are North India and Bangladesh.
How sustainable are your manufacturing units?
A large and growing number of manufacturers are realising substantial financial and environmental benefits from sustainable business practices. Sustainable manufacturing is the creation of manufactured products through economically sound processes that minimise negative environmental impacts while conserving energy and natural resources. Sustainable manufacturing also enhances employee, community and product safety. That said, our products require lot of chemicals to process, and our fabrics are not bio-degradable; but the manufacturing cost is cheap. We do follow one of the sustainability processes, which is reducing wastage. We also respond to or reach new customers and increase competitive advantage, besides protecting and strengthening the brand and reputation, and building public trust.
What are the top HR practices followed at PG Silk Mills?
No micro-management: Right from the interview till the time a candidate joins us, it is made clear to him or her that they have to take complete ownership of what they do. And we keep our promise by giving them complete ownership; which means no micromanagement. They can complete the task in any way that they are comfortable, as long as the tasks are completed on schedule and in an ethical way, it works for us.
Flexible timings: This is something that has been gaining a lot of momentum in many companies. We too are big fans of flexi-timings as we believe that employees do more work when they are not busy looking at the clock. We have a 12-hour window during which an employee can come in and work for a 9-hour period. As long as the work is getting done and it does not affect coordination among teams.
Dress code: We don't have a dress code policy. We believe that people should be judged by the work they do, how they do it, and the value they bring to all the stakeholders of the company, i.e. the other employees and the clients. Our employees are free to wear whatever they want when they come to the office. The only rider is that we do tell them to use their good judgment when dressing for meeting any external entities like clients or vendors.
Glass door policy: Actually, the correct term would be No Door Policy. We follow a flat-structure and we don't really have any "boss" system. That's why the only cabins in the offices are either conference rooms or bathrooms! We trust our employees to be responsible for what they do, and as mentioned earlier they are complete owners of their work.
Fun at work: Well, this is more of a group of policies rather than a policy itself. Nevertheless, we thought that it was worth a mention. We realise that all work and no play makes Jack a dull boy, and that's why we have a host of fun programmes, ranging from lunches to dinners. These are the major steps we take at PG Silk Mills to ensure that our employees are happy and so that they do things to make sure our clients are happy. (HO)
Published on: 23/07/2018
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