Lux Industries offers a range of more than 100 products under 12 brands for a growing family’s (men, women and children) innerwear needs. This makes the company’s products relevant across ages, genders, geographies and seasons.
Lux has six manufacturing units across five locations in India. The prominent Lux brands comprise Lux Venus, Lux Classic, Lux Karishma, Lux Touch, GenX, Lux Cozi, Lux Cozi Big Shot, Lux Cott’s Wool, Lux Inferno, Lux Mozze, ONN and Lux CoziGlo. These brands have demonstrated consistent traction on account of its high quality, recall, endorsement and superior price-value proposition.
“Lux Industries is one of the most profitable innerwear textile companies in India and is attractively placed to capitalise on the cusp of an exciting moment for India, the fashion hosiery sector and our own company”, says Mr. Pradip Kumar Todi, Managing Director.
In the last few years, Lux Industries has embarked on a complete reinvention of its business with the main objective of becoming future-ready. The company has made investment worth Rs. 82.64 crores in its new integrated Dankuni knitting and cutting facility that makes it possible to provide more than 95% of its products with captive knitting and adequate provisions to grow its capacity across the foreseeable future and address the growing demand.
Lux enjoys one of the lowest manufacturing-cum-conversion costs within its business. The company has strengthened its brand building, invested an aggregate amount of Rs. 277 crores in its brands all along the five years ending 2016-17. It has premiumised its product offering, generating a progressively larger proportion of revenues out of value-added products. It has also invested in technologically-advanced 100% automated cutting equipment in its state-of-the-art Dankuni facility.
“The highlight of the year 2016-17 was the commissioning of the company’s Dankuni facility. Prior to its commissioning, the company turned out products across 12 different pan-India locations. In the last few years, we took a considered call, and the management recognized that a large integrated facility at a single location would generate attractive economies of scale, enhancing competitiveness”, said Mr. Todi.
In view of this, Lux Industries commissioned a Rs. 83-crore facility across 11.48 acres on the outskirts of Kolkata. “The plant which was commissioned last year achieved 78% utilisation by the end of the year, and we believe that when asset utilization increases during the current year to a projected 85%, savings will increase further”, he added.
Lux has also implemented the SAP HANA S4 version. This has visibly strengthened the company’s systems. The benefits comprised systemic integrity that translated into a disciplined management of trade channels; and checks and balances strengthened. The enhanced MIS resulted in informed decision-making. The company believes that SAP represents a robust foundation that will make all growth possible without a corresponding increase in costs or investments.
The company’s manufacturing capacity of 1,825 lakh garment pieces a year across six manufacturing facilities is one of the largest in India’s innerwear sector, translating into corresponding economies of scale. This has established the company as one of the most competitive innerwear manufacturers in the country. This capacity, distributed pan-India, accelerates the company’s access to local markets, enabling it to capitalize on the local benefits and distributing risks across facilities.
Lux manufactures 100% of its products in-house with zero outsourcing. It has invested in modern captive equipment and skills of knitting, dyeing and bleaching, cutting, stitching and finishing (with accessories). It does the entire garment cutting in-house, employing state-of-the-art machinery. The competitive advantage of the manufacturing facility helped in moderating manufacturing costs.
The company drew in the manufacture of around 3 lakhs pieces per day from its dispersed facilities, making it possible to maximize manufacturing volumes at a single location where it enjoyed the lowest manufacturing costs. In a full year’s working, the company is expected to generate 35% of its revenues from the products manufactured at the Dankuni facility.
Lux has invested in the best knitting and cutting machines: the cutting machine from Morgan Technica SPA, Italy, and knitting machine from Mayer & Cie, Germany, and United Texmac Pte. Ltd., Singapore. The plant, certified for OHSAS/ISO 9001:2008. The plant represents a milestone in the multi-decade existence of the company.
The Dankuni plant is extensively integrated from knitting to cutting, making it possible to deliver products with speed coupled with enhanced value addition. The extensively automated plant has moderated the wastage per meter and increased the number of pieces cut per 100 meters of fabric. The plant is scientifically-designed, enhancing space availability and productivity. The plant is expected to reinforce the company’s cost leadership, making it possible for it to widen its market share. It is expected to generate a complete payback within five years.
Phase II expansion plan
Lux is also planning to embark on a Phase II expansion plan to be implemented over the next three to four years, which should double the manufacturing capacity. The innerwear industry is expected to grow at 10% during 2017-18. At the same time, yarn prices are projected to remain steady. The topline of the company is also expected to grow at 10%.
With the commencement of operations of the Dankuni plant at its full capacity, Lux expects to achieve better efficiency. The company has its other manufacturing capacities at Dhulagarh and Tirupur and has its sales offices almost all over the country.