GHCL’s strengths revolve around its penchant for innovation and consistent product development with its aim of becoming highly competitive, backed as it is with its strong passion for sustainability, thought leadership in creating intellectual property and its ability to partner with multiple agencies to make its popular strategy a success. The key weakness at this point of time is the limited breadth of its product basket and lack of diversification within the realm of Home Textiles.
The company is of course actively evaluating the possibility of moving into the manufacture of related product categories and hence meaning more to the end-customers by offering a ‘one-stop shop’ opportunity. The opportunity of a shift in the country of origin strategy is something that could benefit it substantially, as retailers explore business migration from countries like China and Pakistan to India. The risk of foreign exchange fluctuations is a reality in this business, but with the robust mechanics of its treasury department, the company is able to take proactive steps to mitigate potential risks.
GHCL has integrated textile manufacturing facilities centring around spinning on the one hand with 1.85 lakh spindles and 3,320 rotors and Home Textiles (Weaving, Processing and Cut & Sew of Bed Textiles) on the other. Its state-of-the-art home textiles facility in Vapi, Gujarat, has 190 air jet looms, 45 million meters of wide width processing capacity, 12 million meters of weaving capacity and 30 million meters of cut & sew.
GHCL’s Home Textile business is well integrated with spinning business. Its spinning units in Tamil Nadu are considered the most efficient and modern yarn manufacturing facilities in India. In 2018-19, the Yarn division did very well as compared with 2017-18.
The capacity was expanded during the year by 8,400 ring spindles which took the overall capacity to a level of 1,85,000 spindles. The new spinning technology, i.e., air jet spinning, was introduced during the year with an installed capacity of 480 vortex positions with a production volume of 180 tons per month.
Home Textiles
In the Home Textile segment, GHCL keeps on strengthening its marketing, product development and operating teams. The strategic focus is on sustainability, traceability and innovation. These areas are clearly becoming the company’s competitive advantage and are likely to see a huge improvement in the proliferation of business across geographies, with better margins in the coming years.
GHCL has taken a very clear leadership position on sustainability across global home furnishing manufacturers. In the previous year, the company launched two unique bedding brands for sustainability – REKOOP by using recycled polyester from post-consumer PET bottles, with forensic tagging by Applied DNA Sciences to secure traceability across the supply chain, and CIRKULARITY, a brand that supports the Circular Economy and focusses on the 3 Rs – Reduce, Reuse and Recycle.
The eight collections under this brand use sustainable fibres such as Lenzing’s TENCEL and REFIBRA, recycled polyester and more sustainable cotton – BCI, Organic and Cotton Leads.
In March last, GHCL launched a unique brand of bedding that promotes “health and wellness”, called MEDITASI. This brand has nine ranges that centre around thermal regulation, moisture management, radiation control, athletic recovery and aromatic infusions.
Another major initiative by the company which was also launched in March 2019 is 100% traceable Egyptian Cotton called NILE HARVEST. This unique initiative is a result of the proven IntegriTEX technology of Tailorlux GmbH in Germany where machine readable optical fibers are injected in the cotton at the ginning stage that stay on till the final product is in stores overseas. The traceability management is done through a cloud-based IoT mechanism.
The company has also stepped up its focus on the Dot Com business in the US and is working with major sites retailers like Amazon, Walmart, J C Penney, etc. The company has launched its own Dot Com brand called AURAA, which sells primarily on Amazon and is getting good reviews and ratings.
GHCL is repeatedly getting accolades for its consistent work on innovation, sustainability and traceability. This competitive edge and the plethora of new products will beyond doubt help the company step up its revenue and profitability. The revenue of the textiles division is at Rs. 1,202 crores in 2018-19 as against Rs. 1,046 crores in 2017-18.