Interview with Sudha Anand

Sudha Anand
Director of Marketing
BKS Textiles

Perennial problem of manpower has led manufacturers to invest in automation

BKS Textiles Private Limited is a government-recognised star export house manufacturing high-quality woven fabrics, institutional bed linens, table linens, and coated fabrics. Sudha Anand, director, marketing at BKS Textiles, gets candid about the opportunities and challenges for Indian manufacturers globally.

Please tell us about the inception of BKS Textiles.

My father M Senthilkumar founded BKS in 1985. In 2004, it was reconstituted as a private limited company. We are into manufacturing and export of woven fabrics, home textiles, institutional textiles i.e. linen for hotels, tables linens, napkins and beddings for hotels. We are also into coated technical textiles. We have our own weaving, preparatory weaving, sewing, processing and sewing and also a laboratory. We have long-standing customers who have been with us for the last 25-30 years for woven fabrics. Our quality is our USP, and we are well known for that. Our main market is the UK.

Which products are in demand in the UK? Which major brands do you supply to?

We are doing a lot of woven fabrics for the UK market as of now. Fifty years back there was a lot of manufacturing being done in the UK, but now products are being imported there. We have buyers of woven fabrics in loom state or in processed form. It goes for various end uses for the industrial, and technical end use for both coating and garment purposes. We do not supply to brands directly in the UK. We supply substrates in the form of base fabric. In Australia, we supply bed linens. We are indirectly supplying to brands in the UK. We do have some big customers for table linen too. So, we work with a lot of brands indirectly.

What kind of fabric requirements are they looking at?

Hundred per cent cotton is much asked for in the UK. If there is any requirement wherein the strength is important, poly-cotton is used. In our total trade, poly-cottons comprise 20 per cent, and rest is 100 per cent cotton. We also have a good number of customers who source organic cotton fabrics. Such specific customers constitute around 5-10 per cent of the turnover.

What kind of fabric requirements are they looking at?

What kind of standards do they look at when they import fabrics from India?

When it comes to Indian cotton, they always compare our products with China. They always say that Indian cotton is clean; the cotton is better-no contamination is what they mean. China of course doesn't have much sources for their own cotton. China is better for polyester and poly-cotton; so, for synthetics they prefer China because India is expensive. Indian cotton products are preferred because of less contamination. Actually, in cost counts till 30s Pakistan is preferred, and for counts more than 30 customers prefer to buy from us.

Who are your major competitors?

Pakistan is our major competitor. We have a lot of competition in bed linens in the home textiles industry.

How is the demand for technical textiles nowadays?

It's a very wide area. There are a lot of technical textiles, and we are specifically into coated textiles. Coating like GSM of the finish would be much clear; so it's a separate process by itself. The coating and processing is done at the fabric level. The market for such products is actually picking up. We have been into coated textiles since 2010-2011, and it took some time for us to set up. But slowly it is being preferred, and its scope is new for us. Coated textiles are not used so much in home textiles products. However, we do have customers-the premium ones, for whom we make tablecloths with acrylic coating and water repellency. This market is growing. We normally manufacture coated textiles for the export market. But we also do contract coating for other exporters. We do direct exports along with contract coating.

Where is the demand for coated textiles growing?

The demand for coated textiles is high in Scandinavian countries and rest of Europe, especially for outdoor tablecloth. Besides that, coated textiles with water repellency and fire redundancy are also used in tents and outdoor sports items. One of our customers makes backpacks using polyester coated textiles for water repellency.

What would be your annual export of woven fabrics?

For woven fabrics, our total turnover is $15 million, out of which 30 per cent is woven fabrics, 50 per cent is institutional textiles (i.e. bed linens for hotel and other home textiles), 10 per cent would be organic, and rest 10 per cent technical textiles.

Out of all the product categories that you cater to, where do you see growth?

Actually, we have a vertically integrated setup to support our woven fabric business. So, we want to concentrate our efforts in that business because lot of Asian markets such as Vietnam and Bangladesh are emerging as garment manufacturers. We are intending to export fabric to such countries that make apparels for big brands. Our intention is to become a nominated supplier by big brands like Marks & Spencer and H&M, so that we can supply fabrics to garment manufacturers to the Asian countries and they in turn will be supplying to the retailers, which is our focus area. Moreover, technical textiles is a wide area, and we are looking for opportunities in that field as well.

Which three factors do you think influence your industry the most?

Textile exports are influenced by, of course, raw material and production cost. Because every year we have this wage solution by the central government, it's actually happening at a faster pace. That is something which might increase the cost of the product (the wages) and also the manpower availability. In terms of skilled manpower, the availability is less and there is also a lot of attrition. In a place like Tiruppur, where there are a lot of options, retaining talent becomes difficult.

Are you planning to move towards automation and implementing robotics owing to labour issues?

That is our future plan, but we have already adopted certain machines. We want to reduce manpower and dependency on labour. Hence, all machinery purchases are based on that. Manufacturers are slowly moving towards automation. A lot of people face this perennial problem of manpower and won't hesitate to invest in automation, which is the trend now.

How can India compete with China, Bangladesh, Vietnam?

It's about the industrial economies of scale; in China everything is on a mass basis. For example, if a factory is manufacturing T-shirts, they do it on a big scale and the factory does only that. That is the skill that they have developed as an expert. They will know where to cut the cost, how to improve productivity. In India, firstly there is this mindset that we want to do everything. It is true with every company. At a given point they are doing 100 different products. The moment you see an opportunity, you just want to grab it and make the most of it. So we are into so many things, and unable to specialise in just one thing. That has an impact on our efficiency, output and production.

Besides, specialising in just on-field like China has a lot of risks if the business is not doing too well. For example, what if the garment sale, because of the global slowdown, scarce purchasing power and changing consumer behaviour, dips? The factory will be in trouble. But that may not be the case with an Indian company. In a way it is good, but it requires multitasking and losing focus, losing efficiency.

Currently in Tamil Nadu, local workers get a lot of freebies from the state government, because of which they do not want to work hard. Today, Tiruppur is more dependent on workers from North India. They are more efficient and give more output.

If you have to, on an average, give a percentage of local workers vs workers from outside, what would it be?

In Tamil Nadu, it should be 50-50. If we need to be competitive with other countries, then we need to have efficient manpower. Besides that, we need a lot of policies from the government to facilitate subsidies. Also, synthetic yarn prices have to be really looked into in India; the import duty is really high. We can never beat China's price in polyester. The whole world is slowly moving towards polyester because even in polyester there is lot of innovation. Polyester is a steady source compared to cotton. Even considering raw material prices on that front, India as a country needs to be very proactive and robust with whatever is the world's preference. If the world prefers manmade, we have to move towards it. Similarly, viscose is happening in ladies' garments. In India, we have lot of brands who sell viscose rayon, but the prices are not competitive. All these aspects need to be looked into. Foreign exchange is not in our hands but raw material and availability of the manpower are, which are lacking by and large, and need to be addressed.

What kind of policies would really help boost this industry?

Indian textiles have an anti-dumping duty into Europe. We are 10 per cent expensive straight away in comparison to Pakistan. I think free trade agreement discussions with the European Union (EU) have been taking place for a while. So, if that comes into being, we will be at least parallel to China and can compete with Pakistan. Again, the raw material prices (cotton prices) are fluctuating, which no one can predict. Even, we being a textile exporter or manufacturer are not able to predict. So if there is a regulation that is more organised, then that would be helpful. Some relaxation in synthetic fabric in reference to coating or structured pricing which is equivalent to the global prices would be of help.

Any major supply chain issues that you face?

Processing of woven fabric, as the demand is very high.

What would you say is the USP of the products being manufactured in Tiruppur?

Since we supply to international brands, the quality is of international standard. The industry that is set here, everything is available in terms of raw material, processing, and also the climate here is good. For knitted garments, everything is available from accessories to modern machinery. In fact knitting machines are displayed in Tiruppur soon after they are launched; so, that is an advantage. We find this place to be good, we have the location advantage being based in Tiruppur.

Where do you source your raw materials, yarn, and machinery from?

We mainly source from Tamil Nadu. We buy sewing machines from Juki. We recently bought weaving machines from Italy, and we earlier had Sulzer. For processing, we use Chinese machines, which we bought recently.

Do you think, Donald Trump's presidency will affect exports?

Actually, we were expecting the forex (w.r.t US dollars) to get affected, but on the contrary it started moving up slightly. I think he wants to create employment within the US, so the import of finished goods might get reduced to a certain extent. Other Asian countries will be substrates of layers because establishing garmenting facilities is easy and less investment-intensive than weaving, processing and others. We could become major substrate suppliers to the US, and finished garments might decrease.

What about the recent demonetisation? How will that affect the industry?

Demonetisation, of course everyone knows is very good for the country in the long run. But it is the most important thing that India had to deal with and now it's been dealt with, so we are very happy. As far as the domestic market is concerned, we have a domestic brand for home linen under a brand name called Swaas, which was actually affected very adversely.

Please tell us about Swaas.

Swaas is our home linen brand with three retail shops, out of which two are in Tiruppur and one in Palladum. We sell online through our website swaashome.com, and also we sell through Flipkart and Snapdeal. The online sales have been decent, but we get lost in the crowd. There are a lot of brands competing out there. So, we don't know how to make ourselves a preferred brand and visible brand.

But nevertheless, we do get some sales. Online is not reliable. We can't plan our business based on online sales because there are still a lot of customers who want to touch and feel the product. So, a retail shop works well for us. Actually, we have been receiving inquiries for franchisee. It's a small format store to find all bed lines-quilts, towels, bedsheets, mats, curtains, aprons and table lines-under one roof. The products are of export quality. We manufacture them exclusively for the Indian market, but the quality standards are higher compared to what is available online.

Do you plan to expand Swaas?

Yes, we are slowly doing it. Maybe, we will venture into the franchisee-store format route. We also plan to expand with standalone stores or shop-in-shops. I want to concentrate only on stores. For being online, we have to spend a lot to make ourselves visible. It has to be done on a day-to-day basis, and you need new collections. The manufacturing for Swaas is exclusive. I work with freelance designers and in-house designers. I buy designs and we make prints, decide on the products, and then we produce. Bedlinens and towels are our fast-moving products.

What is the production capacity at BKS for all your product offerings?

Our annual capacity for coated fabrics per day is 25,000 metres, woven fabrics is 75,000 metres in dyed, bleached, and printed forms. We make 10,000 pieces of napkins and 5000 table linens per day.

Published on: 12/04/2017

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.