Investments in textile printing underway
Mafatlal Industries Ltd. has for the year ended March 31, 2016, reported a total revenue of Rs. 1,344.65 crores, representing a significant growth of 29 per cent over the total revenue of Rs. 1,044.69 crores for the previous year. All the divisions of the company recorded a marked growth in revenue and operational profit.
Mafatlal has been investing in upgrading its facilities at both the Textiles and Denim Divisions, to add balancing equipment which will result in either increasing throughputs or reducing the cost of production. To this end, the net addition to fixed assets had been Rs. 65.54 crores.
Mafatlal operates in the textile segment with Textiles and Denim being separate strategic business units. The company continued to invest in capital asset upgradation and modernization. At the plant level the operational focus has been to reduce overall costs and wastages and to improve machine efficiencies. The company has met with good success on these fronts at both its denim and textile plants and several initiatives are planned on similar lines for the coming year.
On the market side, Mafatlal continues introducing value-added products and expanding its distribution network both in the domestic and international markets. The main thrust was on the branded business in the domestic market which has met with a very encouraging response from the trade and consumers. Further growth and initiatives in the areas mentioned above are on the anvil for FY16-17.
To capitalize on the opportunities ahead, Mafatlal has strengthened its leadership team and its management resource base at the operative level. It is investing in various ongoing initiatives in the areas of Human Resource, Standard Operating Procedures, Information Technology, etc.
Textiles
Overall the business continued its growth momentum with higher production and sales. The sales volume grew by 16 per cent during the year under review. Mafatlal has commissioned additional printing capacity and operates in both the business to business (B2B) and the business to consumer (B2C)/retail segment and is a leading player in the polyester cotton and 100% cotton white shirting business, cotton and viscose prints and high twist cotton voiles. A number of value-added products were introduced in the whites segment. This has resulted in overall sales increase and gains in market shares in this segment.
The institutional and school uniform business, where Mafatlal enjoys leadership, grew significantly during the year. The company has been successful in retaining the key accounts in the institutional business as well as getting new ones. The school uniform business provides a great opportunity for Mafatlal in the coming years, and pursuing the use of web and app-based technologies to facilitate business growth in these areas is one of the main drivers. Further forays are also being planned in the Home and Ladies wear segment.
Mafatlal will also have an additional focus on bottom weight suiting, especially in the polyester cotton and polyester viscose segments. The Ready to Stitch Combos will also form an increasing part of the offering.
The company has a strong base on the retail front with over 100 Mafatlal Family Shops across the country, and this will be further strengthened.
In the coming year, Mafatlal intends to add additional printing capacity and also equipments to improve value proposition for cotton, linen and viscose products. Similarly increased field and retail presence, newer range of products, including yarn-dyed shirting, should boost B2C sales in the coming year.
Denim
Mafatlal registered significant production and sales increases in denim business which benefited a lot from the increased dyeing capacity. Sales grew by 38.3 per cent during the year under review. The product base also shifted to the higher end value-added products with dobby constructions and light weight denims. A number of new finishes were also introduced.
Mafatlal which has opened a representative office in Bangladesh expects good sales from the area as well as from other Asian countries like Vietnam.
In the coming year, the company is investing on procuring additional wide-width looms so that costs are optimized and speed to market is improved. Additionally, investments are being made on printing and finishing machines. It is expected that the investments being made for developing international markets and brand business will further strengthen the business proposition.
Matatlal’s future growth will be driven by the volume size across both the strategic business units. In the immediate future the company will focus on its core strength product segments such as school uniform, polyester cotton & cotton white shirting business, cotton & viscose prints and high twist cotton voiles and differentiated and value-added denim product portfolio.
Its focus on building marketing & distribution footprints would continue with renewed vigour in the coming year. The investment in equipment is aimed at improving the operating margins leading to increased throughput, improved product-mix and reduced manufacturing cost.