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Welspun India Limited Seizing The Emerging Global Textiles Opportunity

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Presentation on theme: "Welspun India Limited Seizing The Emerging Global Textiles Opportunity"— Presentation transcript:

1 Welspun India Limited Seizing The Emerging Global Textiles Opportunity
Presentation on Welspun India Limited Seizing The Emerging Global Textiles Opportunity CONFIDENTIAL DRAFT

2 Welspun Group Profile US$ 400 million, engaged in Terry Towels
Largest Terry Towel producer in Asia Polyester Filament Yarn One of the largest Specialty Polyester Filament Yarn producer In India Polyester Buttons and Resins Largest producer of Polyester Buttons in Asia Cotton Yarn One of the prominent players in India Saw Pipes One of the largest capacities of Saw Pipes in Asia, outside Japan. PAGE 2

Asia’s largest and world’s 4th largest Terry towel producer Current Terry towel capacity :10,800 Tons being expanded to tons Becoming a complete home textile player by addition of bed linen Plant at Vapi Gujarat and Anjar, coastal Gujarat, India Distribution network in 32 countries Exports revenue- 94% of total revenue ( 68% to the US market) Certification: ISO 9002/14001 and SA 8000:2001 by M/S BVQI Only Indian company to license life-style brand in Home Textiles Nautica for towels in US and Canada Tommy Hilfiger for Home Textiles in India PAGE 3

4 Welspun – Journey to become a Global Home textile Player

5 CIRCA 1994 Polyester yarn manufacturer
Turnover was Rs 90 Crs, Net Profit of Rs 4 Crs Started Towel Business Challenges: To produce Towel – New Business Line To produce Quality Towel To Export Quality Towel – EOU status To Export Quality Towel to Knowledgeable Matured Market PAGE 5

6 CIRCA 1994 – Cont….. Emphasis on Maximum Production
Quality improvement at each stage of production Product Analysis based on Customer feed-back Emphasis on Volume Growth Focus on Sales from the maximum Outlets Started Business through Intermediaries – Exporters, Buying Houses. PAGE 6

7 CIRCA 1999 Produced Quality Towels Exported Quality Towels
Expanded Capacities from 2500 Tons to 7800 Tons Grew in Volume and Value Terms Emerged as largest Exporter of Towels from India Turnover – Rs 325 Crs – significant for Towel Co Profit after Tax of Rs (31.5 Crs) PAGE 7

8 CIRCA Cont….. External Dependence- All Business through Intermediaries Presence in Generic Products – Yarn and Plain Dyed Towels Focus on Sales rather than Marketing Limited Designing Efforts Limited Processing capabilities – right color/right shade/right mix was a challenge Financial Crunch In nut shell Innovation was a missing Link PAGE 8

9 CIRCA 2000 - Putting heads together for a New Beginning

10 Strategy Adopted Vision to become a Truly Global Player and communicate to all our employees Breaking the midriff - middle-men/agents from the business cycle – Jettisoning Extra Baggage Direct Relationships even at the cost of dip in sales Decided to invest in Product Developments and Design Capabilities In Essence Adopted Innovation in entire Business Operation - Product, Processes, Practices and People PAGE 10

11 Innovation In Products
Paradigm shift from USE to COLLECTION range of products New Value added product lines – Egyptian Cotton, Embroidery, Supima (American Cotton), Kid Centric Towels. Experimented with different inputs like PVA fibers New Product development Hygro Cotton Zero-twist Subslistatic Printed Blister Pile Towels Developed new shades and floral prints that are trendy and inline with the Fashion Industry PAGE 11

12 Innovation In Processes
Process House: Fully Atomized color mixing Design Innovation Developed new Designs by creating one of the best Home textile designing team Design Studios Design house in India - 5 people 2 designers each in US and UK Appointed World class Designer from the Industry PAGE 12

13 Innovation In Processes
Innovation in Sales and Marketing Processes Selection of Right Business Partners Created Marketing Infrastructure Sales team in US 6000 sq. ft. exclusive showroom in New York Distribution alliance in the US for distribution and warehousing Created Welspun USA - 100% subsidiary to handle customers directly Product Development skills complimented by Global Sales Network PAGE 13

14 Innovation In Practices
Utilizing IT as Integrator EDI & RFID in Welspun USA Integration with Customers Electronic Coloring and Design Matching which integrates Product Design & Development SAP R/3 - Integrates Operations, Marketing and Supply Chain Reverse Auction PAGE 14

15 Innovation In Practices
Market Intelligence : Conducted Grid analysis of top retailers with respect to: Product range, Fast Moving Items best selling SKUs Profit margin expectation Collection of Samples to understand global developments PAGE 15

16 People Paradigm shift in Mindset from Manufacturer to Marketer.
Adequate Training in SAP enabled Production and Operations Appointed International Textile consultant to improve skill sets of employees Appointed Experienced and result oriented people from the Industry . Performance based Reward system PAGE 16

17 YEAR Revisited PAGE 17

18 Product wise sales – in terms of % (based on ex-mill values)
The proportion of the value added products has increased PAGE 18

19 Progress in Value Chain
Value Creation Marketing & Outsourcing Choose & Pick amongst Retailers High end products Branding Direct Export Indirect Export 2000 2003 2004 2005 Time ‘95 PAGE 19

20 Customer Relationship
Long standing relationship with 12 out of 20 top retailers in the world Customer centric Planning and Production mechanism BETTERNWELT MITSUKOSH PAGE 20

21 Value Chain contribution
Tommy Hilfiger, Nautica, Polo Ralph Lauren, DKNY, Calvin Klein Retail Price Expansion 2005 2004 2003 Designer Brands 15% 12% 8% 10% 4% 3% May&Co, Federated, Dillard’s 2x Department Stores % Specialty Stores BB&B, LNT, Kohl’s 10% 5% 1% 15% 12% 22% + 5-7% Fashion Stores J C Penny, Target, Shopko x Mass Merchants Wal-Mart, K Mart, Costco 15% 33% 32% Indirect Business 0% 2% 8% PAGE 21

22 Venture Capital & Mutual Funds
Comparison FY 1999 (Rs. Crs) Particulars FY 2005 (Rs. Crs) 325 Turnover 374 (35) Net Profit 295 41 Market Cap. 800 - FII Holdings 24% 2.66% Venture Capital & Mutual Funds 32.19% PAGE 22

23 Global Opportunities PAGE 23

24 Today’s Global market place
Quota phase out – An additional market of $ 1.25 bn in Towel and $ 1.75 bn in bed linen Segment alone Shrinking supplier base released Pillowtex - bankruptcy - $ 450 mn of towel and $ 220mn of bed linen supply. WPS - Chapter 11 – $ 455 mn of towels and $ 580 mn of bed linen supply. Lucrative European market of $ 600 mn with shrinkage of supplier base. Australian and New Zealand market of $ 50 mn – Dropping duties – 25 to 17.5%, rendering there capacities idle Increased domestic demand – Few organized player in the home arena to cater to the market Low interest rates and higher disposable income PAGE 24

25 Key Differentiators PAGE 25

26 Success Algorithm Textiles has been forecasted as another BPO success story, what Y2K did for IT , Y2K5 could do for Textile Industry Mantra For Success as followed by Infoys - P: Profitability S: Scalability P: Predictability D: Dependability PAGE 26

27 Vision 2005 and Beyond PAGE 27

28 Innovation in 2005 and beyond
Products: Continuous Innovations in Products- Bamboo Filaments, Hollow Yarn, Natural Towels New Business Lines like Bed Linen Processes: Automatic Recipe matching – Orgatex, Automated Operations like Cut and Sew. Practices: Patenting of New products to Create differentiators. People: Knowledge Management, Six Sigma and ESOPs PAGE 28

29 Vision – This is what we are aiming at…………….
Fully integrated textile company 4 Fs - from farming to factory to fashion to foreign retailing Organic and inorganic initiatives to target Growth Preferred partner in Home Textiles for any global initiative. Leader in embracing new technologies, product innovation, market intelligence - to offer competitive end-to-end solutions to our customers. Among top three home textile companies in the world. Market leader in Indian home textile market. PAGE 29

30 RECOGNITIONS National Export Award for outstanding performance from Government of India, for the year Texprocil* gold trophy for outstanding export performance for successive three years ( , & ) Best Global Vendor by Wal-Mart in for Terry towel Vendor of the year , FY 2002 by Shopko Stores Inc., USA for all its product categories Operational Excellence Award by JC Penney Stores, USA for Year 2003 PAGE 30


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