Providing cost-effective solutions to spinning industry all along
Lakshmi Machine Works Ltd. (LMW) has helped the Indian spinning industry a lot to remain competitive. LMW manufactures the entire range of spinning machinery, thereby creating value addition and cost competitiveness for its customers. Constant upgradation of technology and increased automation of spinning machinery have enabled the company’s customers to become more competitive in the market.
Despite growing competition, LMW continues to lead the market. The company has also established its strong presence in many global markets.
We spoke to Mr. Sanjay Jayavarthanavelu, LMW Chairman, on the challenges faced by the spinning industry and how the company is helping spinners remain competitive in such challenging times. In the exhaustive discussion, he explained in detail the company strategy to survive competition and the future plans for overall business expansion.
Excerpts:
It’s been a difficult first 6 months for the spinning industry. How has the year been for LMW?
The first half of 2016-17 was characterized by mixed trends in the spinning industry wherein certain segments of customers had undergone strain in their operations while certain others continued to invest on their planned projects. LMW has successfully executed many projects during this year. Even under the current subdued market conditions, it could well maintain its overall market share and also increased the same in certain products like combing system, speedframe and ringframe. We could also penetrate much into the established compact spinning segment and increased our share compared to last year in both OEM and retrofit supplies. With the presence of our sales and aftersales service network pan-India, we could establish excellent customer relationship and provide world-class technical and technological services to customers.
What are your expectations from the second half of this year? Do you expect the industry to recover?
The spinning industry performance has always been characterized by cyclical trends which could be inferred from the past records. With the arrival of new cotton crop into the market from November 2016, Government initiating all necessary steps to regularize the system to ensure the availability of cotton throughout the year, with the ongoing huge investments in weaving & processing segments triggering the need for quality yarn from upstream process and with the increase in export demand for yarn, there is always scope for the industry to recover. We are hopeful it will happen during the second half of this year.
Do you feel there is excess capacity in the Indian spinning industry which is affecting spinners?
Considering the overall situation, the subject of excess capacity in the spinning industry is only a virtual observation. The Indian spinning sector developments, investments and technology upgradation are taking place in view of the increase in domestic consumption year on year and more importantly considering the global requirements. The temporary phenomenon of decline in yarn exports is coupled with internal factors of raw material price fluctuations, and its impact on low margins of spinning should not be taken as excess capacity in the industry.
As huge investments are continuing in weaving, knitting and processing sectors and as the apparel industry is in the process of making a huge leap with the Government’s special package, demand for quality yarn will certainly grow, thus making it necessary to add capacities in spinning in the near future. The sector will need to grow to accommodate this demand.
We also see companies investing in large spinning capacities for their captive consumption, so that they have better control over the yarn quality. Do you see this as a trend going forward?
The answer to this question dovetails into the short brief on the situation of exports of Indian textile & apparel and the fast changing trend in the buying behavior of domestic consumers.
China, now enjoying a dominant share of more than 40 per cent in global trade in textiles and apparels, has slowed down, but it is expected to continue in the future also due to reasons like high wage cost, growing focus on value-added segments and relocation of manufacturing to neighboring countries. This trend is expected to continue despite the growing domestic demand of apparel in China. Though the Chinese slowdown and relocation of manufacturing activities will benefit countries like Vietnam, Ethiopia, Kenya, Myanmar, Bangladesh, etc., India is a larger and more resourceful country which has the capability to take maximum advantage because of its well-established textile base, skilled manpower and strong infrastructure. This factor is accelerating the growth of the apparel industry in India and which in turn encourages the existing players to expand their spinning operations, resulting in such huge investments. Such integration will always have a better control on supplies, quality and cost advantages. Hence this trend is expected to persist.
Today we have all global spinning machinery manufacturers setting up their plant and localizing their machinery to remain competitive in the market. Given this scenario, What is LMW’s strategy to stay competitive and ahead of competition?
Yes, the spinning industry is undoubtedly the most competitive with most advanced technology and high-tech machines in the entire textile value chain. As we all aware, competition in any business will bring in more and more creativity and innovations, which ultimately will benefit the industry. LMW has strategized its activities to face this challenge which includes agility in manufacturing, intensifying the product innovations, making quality a way of life in all our business processes, best value proposition in the product and more focused aftersales service.
Given the fact that a customer has many options today when he decides to set up a spinning plant…why should he opt for an LMW machine?
The purchasing decision of a customer is associated with various aspects, starting from the guidance on product selection to care on providing effective aftersales service. LMW seamlessly takes care of this cycle through well-spread and closely built network of sales and service centres. A best value for money products, latest technology with cost-effective solutions and a host of internet of things puts LMW in a most advantageous position compared with global competitors.
Apart from fluctuating raw material costs, the other challenges facing a spinning mill owner are lack of skilled manpower and high energy cost. Customers are increasingly looking at automation to reduce dependency on labor and more energy-efficient machines to reduce the energy cost. How is LMW addressing the issues of automation and energy efficiency through its new range of machines?
Availability of skilled manpower and high energy cost are proving a big challenge for spinners and putting the operating margins of spinning mills under tremendous pressure. LMW is always at the forefront in providing solutions for such challenges through its innovative concepts and cost-effective solutions. To name a few, our range of products includes an automatic bale plucker, continuous automatic control of feed to carding machines, simple and reliable can-changing systems, machines with change gearless drives, automatic comber lap transport systems, longer spindle machines of Speedframe and Ringframe, roving transport systems, basket type tube loaders, Ringframe machines linked with winders, etc. Similarly on the energy efficiency front, our machines are equipped with high energy-efficient motors, PLCs and servo drive controls, inverters, efficient suction systems, etc.
How are LMW’s operations in China shaping up? How has been the overall experience of working in the Chinese market?
LMW’s subsidiary, LMW Textile Machinery (Suzhou) Co. Ltd. (LMWTMSCL) commenced operations in 2008. Since then, it has been able to establish its presence in the Chinese market with over 1.5 million spindles in operation at various Chinese mills as of now.
With the past experiences, LMWTMSCL is adding its product portfolio with Speed frame and Autoleveller Draw frames in this current year to cater to the premium segment of the market. The experiences have been very positive with the acquisition of customers of the high & medium segment with varied fiber applications and processes. LMW has been able to gain wide knowledge in different processes and its products have been well accepted across the customer segment. LMW is well known among the Chinese investors as the most cost-efficient multinational brand with state-of-art technology. With this we were able to expand the customer base amidst competition from multinational and local manufacturers.
As of today LMWTMSCL concentrates on catering to Chinese mills and Chinese investments in overseas countries such as Vietnam.
How is LMW’s presence in other global markets? What percentage of business currently comes from exports?
LMW has already had its strong presence in major textile markets such as Turkey, Indonesia, Bangladesh and Vietnam. Our exports have grown rapidly over the years, and now 25 per cent of our revenue comes from exports. We have made a significant success in Indonesia where we are the market leader with 1.3 million spindles and with a marketshare of 25 per cent.
In markets outside of India, how is LMW perceived as a brand? Is it considered a low-cost alternative to the other European brands? What is the USP for LMW when you compete in other global markets?
Outside India, the LMW brand has been perceived by investors as a best value provider and a trusted partner for their long-term growth. Also LMW has been considered as appropriate technology provider at an affordable rate. LMW has already bridged the technology gap and has come out with new technologies which are on par or better than the European brands. It has its own team of sales and service executives in every country of its operation, for faster response and sustained support to customers.
Talking about innovation and technology in your machines, there are some technologies which are just to showcase the capabilities, but may not be very relevant for the customer from a financial investment perspective…and there are other technologies which improve the productivity of the machines and quality of the final output. What is LMW’s mantra for innovation and technology? Can you name some of the key innovations and technologies introduced by LMW in your machines?
Technology advances at an ever-increasing pace and customer / market needs are constantly changing. This always gives us an opportunity to continuously innovate and bring new technologies into our products, ultimately aiming at giving cost-effective technical spinning solutions to the industry. There are many key innovations and technologies introduced by LMW, and to name a few, carding machines with highest active carding area, high speed combing technology, Long Ringframe with duo suction, well-augmented suction systems, reliable auto doffing systems, cost-effective compact yarn manufacturing solutions, etc.
Service is undoubtedly the most critical factor for the success of any product / machine? How is LMW’s focus on aftersales service and spares?
LMW considers aftersales service as a tool for enhancing business values to customers. We knew that our customers buy our products expecting a bundle of values that are integrated in the product and service.
LMW’s own technical service set up has around 50 engineers & textile technologists to handle directly the aftersales service activities of our overseas customers and extend support to the service team of our channel partners, Voltas and Super Sales India Ltd., in the domestic market. We have around 300 + service engineers and textile technologists in the frontline service team of our channel partners who are positioned at different locations and are available to cater the service requirements of customers. In addition, we have service set-up at overseas locations, in Bangladesh, Indonesia, Vietnam and Turkey. Also offered are parts and components manufactured with advanced technology.
In the past five decades, LMW has installed over 100,000 machines in the overall global market. It continues launching performance enhancement kit (PEK), from time to time, which in turn technically supports the machines to get updated with respect to latest technology. This further assists our customers in improving the efficiency and productivity of machines at par with the latest technology machines in the field. We are also studying on the remote diagnosis of the product and shall work on the same considering the functional complexities in spinning machines.
Finally, about LMW at India ITME.
LMW, as a market leader, is always in the forefront of innovation providing cost-effective solutions to the spinning industry. Customers can witness the new product innovations in each of our sub-systems at Hall 1, Stall no. C2 D1.