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The Textile Magazine
August 2012
final product users.
Similarly, the presence in cot-
ton and polyester, which are often
treated as substitutes in the market,
gives the company the scope to best
leverage market conditions. In fact,
today, polyester’s share in
the company’s total sales
has grown to 34 per cent
and the focus on value-
added polyester products
like Cationic yarn is pay-
ing dividend.
The major capex pro-
gramme for develop-
ing this large integrated
production capacity was
completed by March 2012.
Going forward, in the next
few years the focus is on
value-added and balancing
capex-related capital in-
vestments. The new capital
investment would, howev-
er, be limited to the extent
of the annual depreciation
so as to generate free cash flow.
Clearly, the company is moving
from a phase of large investments
to create global scale capacities to
a phase of consolidation when ef-
forts will focus on getting optimum
returns from these capacities. There
are three fundamental goals in this
phase – maximising ROCE (return
on capital employed), monetising
and exiting non-core businesses,
generating free cash flow and
deleveraging the company.
Maximising ROCE
Alok is implementing a change
management programme across
its facilities that is specifically
targeting for efficiencies in terms
of optimising cost of operations to
maximise ROCE. This programme
is progressing well, and one expects
to see substantial positive results
soon.
In addition, the company is pur-
suing a specific strategy to improve
asset turnover of the integrated
cotton business by increasing the
volume of value-added products
like yarn dyed (structured) fabrics,
technical textiles and institutional
workwear. The stress is also on
Mr. Dilip B. Jiwrajka, Managing Director
cover story