Interview with Hrishikesh Mafatlal

Hrishikesh Mafatlal
Chairman and Chief Executive
Arvind Mafatlal Group

The US and EU markets are still difficult, as consumer spending is still being constrained by limited disposal incomes.

With Fibre2Fashion Correspondent Cindrella Thawani, Hrishikesh Mafatlal shares us the glance of US and EU markets and to explore opportunities in other overseas markets such as South America, Vietnam and Africa. Synopsis: In textiles Arvind Mafatlal Group has sprouted in, Denims (Mafatlal Denim Ltd.), Rubber Chemicals (NOCIL Ltd.), (Mafatlal Industries Ltd.) and Fluorochemicals (Navin Fluorine International Ltd.). The AMG group has been in Textiles from 1905 and is one of the oldest Textile Companies in India. Hrishikesh Mafatlal is the Chairman and Chief Executive of AMG. He is a Governing Council Member of N. L. Dalmia Institute of Management Studies & Research. He was a Member on the Board of Governors at IIM Ahmedabad for 12 years from 1995 to 2007. He is a graduate in Commerce (Honors) from Sydenham College, Mumbai in 1975. Further, he attended Advanced Management Programme at the Harvard Business School, USA, in 1993. Excerpts:

What kind of development and state-of-affairs you appraise for textile and apparel industry in Indian markets?

Due to country’s economic growth as well as surplus disposable incomes and with the rapid growth of retail; I believe that the textile and apparel industry of India will have a sustained growth in the coming decade. The current market size of the textile and apparel industry is estimated to be 89 billion USD (4, 40,000 cr) of which 31 billion USD is exports and 58 billion USD the Indian domestic market. The average expected growth rate for the textile industry in India is 9-10 percent over the coming decade (till 2022), by that time, market size will be at over 230 Billion USD. This growth will present an opportunity for textile across the value chain such as fiber, yarns, fabrics, branding, designing and retailing. Besides, we expect to see new universities in design, fashion and technology in India.

How do you see that fabric manufacturing and retailing hand-on-hand could be a challenging task for the long run or cannot go together?

In my view, fabric manufacturing and retailing, need necessary moves hand-in-hand, as they form a supply chain for the end brand and consumer. The success lies again in understanding consumer preferences and responding to that requirement by developing fabrics, creating attractive garments and then showcasing them on the retail shelves, hand-in-hand.

What is the road-map of your company to boost its denim segment? Additionally, how do you see denim market globally and rural as well as semi-urban areas?

Even in these tough times, the denim market globally is about five billion meters, annually and growing at about two-three percent per annum. The US and EU markets are flat, but the emerging markets are growing at between five and 15 percent per annum, with China and India are being the aggressive growth leaders. The Indian denim markets have been growing at a compounded rate of around 10 percent over the last decade and are expected to continue growing at 10 percent per annum over the next five years. The reasons for this rapid growth include a rapidly growing economy, which results in surplus disposal incomes. Interestingly, this growth is probably higher in the rural and Tier 2-3 cities! Besides, India has an excellent demographic profile, with over 40 percent of consumers being in the age group of 15 and 45 years, who typically would buy denim jeans and other products. Mafatlal Denim Ltd. is a reliable supply chain partner for many global and Indian brands since 1997 and it specializes in fashion and value added denims like slubby ring, coated and coloured denims. Our strategy is to understand consumer requirements and fashion trends and to develop “fashion – forward” collections. For example, we are now showcasing our Fall-Winter 2013 collection. Going forward, we plan to increase our denim capacity from 20 to 30 million meters per year in a phased manner.

How do you see the market globally as well as its export scenario? Further, where do you envision the market stability in its demand?

The US and EU markets are still difficult, as consumer spending is still being constrained by limited disposal incomes. However, we expect demand to start improving in 2013. Furthermore, there is an opportunity for Indian textile and apparel exporters to explore other markets like Africa, Vietnam and South America. Besides, China is becoming expensive for textile products, due to a strong currency and increasing costs. This also opens a window for Indian exports. I expect global demand to improve and stabilize from 2013-14.

Which essential measures are required to increase the value chain productivity of your textile segment? Please share your outlook.

AMG group’s textile operations spread across the value chain viz. spinning of yarn, weaving and processing of fabrics, branding and retailing. The group is investing in new efficient machinery in the fabric manufacturing segment to become cost effective and make value added products . We are also working with our customers, brands and retailers to offer a wide range of products like (denims, shirtings, school uniforms, voiles, bleached white fabrics, suitings, etc).

Please tell us, how R&D plays a decisive role in maintaining your heritage into the textile sphere?

As I mentioned, the AMG group has been in the textile business since 1905 (over 107 years). We believe that product understanding and developing suitable products for our consumers Indian and overseas are our key growth zones and for that our R&D department plays a crucial role. They work relentlessly in developing new processes, new finishes , innovative designs , using new equipment and creating products to ensure that our range of textiles continue to be liked by the consumers and brands .

Besides also interpret, Mafatlal’s involvement with sustainability?

The AMG is a responsible producer and marketer of textiles in India and globally. We continuously work towards reducing our carbon and water footprints and being ecologically friendly.

Please apprise us about your further moves that you could materialize into this segment.

The AMG is looking at persistent growth in the textile business over the next five years. We are investing for increasing our denim capacity from 20 MMA to 30 MMA and our other textile capacities from 20 MMA to 30 MMA in a phased manner. We are also evaluating opportunities in branding and retailing in India.

Published on: 10/10/2012

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.