GHCL Ltd. is a diversified company with an established footprint in chemical, textiles and FMCG segments. It plays a prominent role as a major B2B company within the domain of the soda ash industry in the country, wherein it produces several variants of soda ash.
GHCL is in the field for more than three decades and has, over the years, grown to be a leader in its areas of operations, adhering to global standards and international best practices. In the textiles segment, the company, on the one hand, manufactures home textile products which are primarily exported worldwide and, on the other hand, it is a leading producer of yarn in the country. Its core competency lies in B2B deliveries, the company holds its sway as a leading B2B player both in home textiles and yarn business. It has been recognized as a ‘Great Place to Work – Certified Company’ by the Great Place to Work Institute and has received ‘The Golden Peacock Award’ for excellence in Corporate Governance.
GHCL Ltd. has integrated textile manufacturing facilities with an installed spinning capacity of around 1.76 lakh spindles and 3320 rotors (Open End), manufacturing 100% cotton, polyester cotton & other blended yarns, 162 air jet looms, 36 million meters of wide width processing capacity, 12 million meters of weaving capacity and 30 million meters of cut & sew facility for manufacturing world-class quality merchandise.
The company has its state-of-art plant at Vapi in Gujarat that integrates weaving, processing and cut & sew facilities. The Home Textiles division is investing to increase the weaving capacity by 18% and the processing capacity by 25%. GHCL’s spinning units in Tamil Nadu are considered to be one of the most efficient and modern yarn manufacturing facilities in India. Such excellent product development capabilities have put GHCL in the forefront of major global markets like North America, Australia, the Middle East, the UK and Europe.
The significant improvement in the margins has been possible due to higher capacity utilisation and GHCL’s relentless customer focus. This has enabled it to successfully strengthen its export markets resulting in its securing large replenishment orders from big global retailers and importers. Some of its valued customers in the US, Europe and Australia include Bed Bath & Beyond, Target, HBC Canada, Sears Canada, K-Mart, Revman International, TJX Group, QVC, House of Fraser, The White Company, Miles Home Fashions, Myer, and Pillow Talk.
The market sentiment in the US looks better and the company is focusing on that market for large volume programs. GHCL strongly believes that focus on customer realignment along with innovative products & its designs and enhanced product basket with tie-ups with private labels will provide further impetus to both top line and margins.
In an interview to The Textile Magazine, Mr. R.S. Jalan, Managing Director, GHCL spoke at length on the company’s textile business
How has the year 2017-18 been for GHCL, particularly the textile business?
Ever since we started with our textile business in 2001, apart from the initial 2-3 years when we were establishing ourselves, we have had an excellent experience. Our existing capital investment in textile business is Rs. 1,350 crores and we plan to invest another Rs. 350 crores in the next 2 years.
How has been the growth in the textile business over the last few years?
At GHCL we have achieved a CAGR of 14% in the top line of our textile business for the last 8 years. On the national front, the Indian textile business is expected to grow at a CAGR of 8.7% during 2009-2023. In short, the future of the textile business looks very bright buoyed as it is by both strong domestic consumption and export demand. With consumerism and disposable income on the rise, home textiles has a very bright future with the upward trend in the Indian standard of living and a new generation of home owners who are socially aware and are not shy of investing in the upkeep of their homes.
Can you look back on GHCL’s acquisition of textile business?
Way back in 2001 when I came to Madurai to assess the Meenakshi Mills which we had then recently taken over, I was pleasantly surprised to see the passion in the team. The team I met was exceptionally good with great potential. Moreover, the timing was just right; the quota regime on textile industry was on its way out. I could sense phenomenal growth opportunity in the business. In a nutshell, we had the essential prerequisites for success – a potential and passion in the team and the right business opportunity.
What were the key milestones in GHCL’s successful journey in the textile business?
We diversified into textiles in 2001 and these 17 years have been completely action oriented and eventful. We achieved our first milestone when we were able to turn around the fate of our Madurai Mills. As we started achieving results the team was motivated to put in their best with a renewed enthusiasm. As a result, very soon we moved into the home textile business, our next milestone. Barring a few short periods of headwind, our experience in spinning as well as textiles has been good. Our entry into the textiles segment helped us grow our top line. I say with pride that we dared to dream at a time when we were struggling with funds, but the GHCL team made it happen.
How did you manage to create an employee-friendly culture within the organization?
The culture of an organization is based on the action and beliefs of the people who work there. At GHCL we believe that people are our most important stakeholders and they can turn all failure into success. “Respect” has its important relevance at GHCL and is exhibited by one and all, and no human relations issue is disregarded or slighted away. We lay great emphasis on trust and respect irrespective of the gender or the level within the organization.
What is the current manufacturing capacity?
Our current capacity for spinning – 1.76 L spindles along with 3200 rotors; weaving – 12 million meters per annum; and processing – 36 million meters per annum.
Have you planned any fresh investments in further expanding your capacity?
Yes, we are continuously upgrading the technology and modernizing our plants. We are in the process of expanding our processing capacity by 25% by the end of Q4 FY 18, the benefit of which will be seen next year. We have also added airjet spinning as a new product to be offered to our customers.
What is the current turnover of your textile business?
The turnover for our textile business was Rs. 1229 crores in FY 17. Our target is to achieve a CAGR of 20% for textile business. Our vision in the years to come is to become the one-stop shop for any type of textile product.
What are your plans for the home textile segment?
We are constantly upgrading our technology and expanding capacity. We have recently expanded our weaving and processing capacity to 12 million meters and 37.5 million meters per annum respectively and plan to further increase it to 45 million meters by the end of this fiscal. In the spinning business, an airjet spinning project with 480 spindles is planned at Madurai. We also intend to set up three more windmills of 2.1 MW each, thus increasing the existing capacity of 25.2 MW of captive wind energy to 31.5 MW. Our aim is to continuously expand and be one among the top three players.
Can you elaborate on GHCL’s new initiative with Reliance and Applied DNA Sciences?
We at GHCL are always very conscious of the impact of our business on the society and environment. Plastic pollution is a major cause of concern all across the world. A million plastic bottles are bought around the world every minute and the number will increase by another 20% by 2021, leading to an environmental crisis. By collaborating with RIL and ADNAS we are taking a small step towards reducing plastic pollution. About 360,000 PET bottles will be used for every 10K sheet sets of 200 TC (60% cotton 40% recycled PET). This will reduce carbon emission by 35 tons, crude oil consumption by 25 barrels and land fill by 40 cubic yards. This is our contribution towards creating a sustainable future. Our collaboration with ADNAS will help in verifying the authenticity of these CertainT products.
The customer today is increasingly becoming conscious of the environment and is shifting to environmentally friendly products. We anticipate a huge demand for 200 TC (60% cotton 40% recycled PET), especially by the ecologically conscious buyer.
What are your expectations in terms of the future growth of the textile industry in India?
The Indian textile sector is the highest employment generator and one of the largest contributors to India’s exports with approximately 13 per cent of total exports. The Indian textile industry contributes approximately 2 per cent to India’s GDP, 10 per cent of manufacturing production and 14 per cent to overall Index of Industrial Production (IIP). Currently estimated at around $120 billion is expected to reach $230 billion by 2020 fuelled by strong domestic consumption as well as exports.