For Welspun India Ltd. (WIL), 2014-15 was a landmark year. The company recorded its highest annual sales and profitability in its history by crossing the Rs. 50-billion milestone in sales and Rs. 5-billion mark in profit during the year. It also maintained its position as the No.1 home textile supplier to the US for a third consecutive year based on the rankings published by Home Textiles Today (HTT) in January last.
During the year, Welspun completed a major part of its vertical integration project for increasing its spinning and weaving capacity. The company successfully commissioned 1,70,000 spindles for producing fine count yarn during the year. The spinning unit inaugurated at Anjar, Gujarat, is India’s largest such unit under one roof. The new facility is expected to take the total spinning capacity of the company to over three lakh spindles, thereby fulfilling nearly 70 per cent of its internal yarn requirement. It will further improve the company’s supply chain with less dependence on external sourcing.
“In the year 2014, we have remained a front-runner in textile business, having been ranked as the No.1 Home Textile Supplier to the US, the third year running. As we celebrate a very successful 2014-15, we remain aware that we still have a long way to go, and we therefore remain committed to our journey of being one of the most preferred home textile companies in the world,” said Mr. Balkrishan Goenka, Chairman, Welspun Group.
WIL, a global leader in home textiles, supplies to 14 of the top 30 global retailers and has been ranked first among the major 15 supplier giants to the US by HTT continuously for the last three years. With world-class manufacturing facilities in Gujarat, the company offers a wide range of home textile products in bath, bedding and flooring solutions to its consumers from almost every corner of the world.
Welspun has its strong presence in key markets like the US, Canada, the UK and Europe, and almost 95 per cent of its production is exported to countries across the world. The company owns brands such as ‘Christy’, ‘Spaces’ and ‘Welhome’ which constitute around 11 per cent of its sales. It has also its special focus on innovation as reflected in the number of patents and trademarks which it holds and has applied for. More than 30 per cent of the total revenue comes from the innovative products developed by the company.
The Indian branded sales are growing at a CAGR of 40 per cent during the last two years. During the year, WIL also launched Christy stores in China, which have been received well. Global expansion of Christy into geographies such as the Middle East, the US and Continental Europe is also underway.
Innovations and new product developments
A key differentiator for Welspun has been its focus on innovation and new product development. The company has 12 patents to its credit. Currently, almost 30 per cent of FY2015 sales comes from innovative technologies developed or owned by the company. Some of these innovations include ‘Hygro Cotton’ (ultrasoft, ultra absorbent, quick drying, etc.) and ‘Flexifit’ sheets (fits a range of mattress sizes). Apart from product innovation, the company continuously works on process innovation and innovations in the supply chain.
In 2014-15, Welspun took further steps to brand its innovation capabilities. A campaign was launched in the US to introduce the patented Hygro Cotton technology to consumers. The company gained traction in hospitality business globally. It also increased its presence in the global e-commerce space tying up with major portals in the US and the UK.
“FY14-15 was a landmark year for us. Not only did we make our operations much more robust by increasing our backward integration, we also improved our profitability significantly posting our best annual financial results ever. In spite of the backward integration capex, we ensured that we generated positive free cash flows and our balance sheet remained strong with lower debt,” said Mr. Rajesh Mandawewala, Managing Director.
“We maintained our leadership position through our quality and innovation, which is reflected in our No.1 ranking in the US for the third year in a row. One of our key focus areas was branding our products and innovations. We launched a major campaign for ‘Spaces’ in India and for ‘Hygro’ in US. We also launched ‘Christy’ stores in China and the ‘Spun’ brand globally on the CSR front”, Ms. Dipali Goenka, Executive Director, Welspun India Ltd.
Inspired by the Prime Minister Narendra Modi’s Swachh Bharat Abhiyaan, Welspun launched Swachh Bharat Abhiyaan on October 2, 2014. This initiative outlines a comprehensive blueprint for a co-ordinated approach to waste minimization, cleanliness targets, and reducing adverse environmental impact.
The Indian economy is expected to grow faster in the coming years as economic reforms gather pace. The other key markets such as Japan, Korea, Australia and South Africa also present huge potential for growth.
India has signed a Free Trade Agreement (FTA) with Japan, Korea and the SAARC countries, which could be leveraged to increase Indian exports to them. Thus the outlook for Indian cotton textiles, especially home textiles, is positive indeed.
