Rs. 1,000-crore turnover by 2016-17 targeted
Mr. Priyesh Shah, Managing Director, Sagar Group
The Ahmedabad-based Sagar Group, currently headed by Mr. Priyesh Shah, began as a trading house in 1971, importing raw materials like raw cotton, viscose, polyester fibre, etc. The group has now interests across raw cotton, yarns, fabrics, garments and new & old textile machineries, and currently represents around 40 major textile machinery manufacturers from 14 countries. It expects to achieve sales of Rs. 600 crores from the textile technology division alone in the current fiscal.
With a view to knowing more about the textile technology division of the Sagar Group, The Textile Magazine met and spoke exhaustively to Mr. Priyesh Shah for over 90 minutes at his Ahmedabad office and got fullest information on the company’s major achievements so far.
Excerpts:
Can you give us a background of the Sagar Group?
The Sagar Group was started in 1971 by my father, Mr. Gauttam Shah, mainly for importing raw materials like raw cotton, polyester fibre, viscose fibre and polyester filament yarn. At that time there were no producers of polyester fibre and Indian raw cotton production was very low.
We entered the machinery business in 1982 and started importing machinery from Tsudakoma Corp. and Murata Machinery, both of Japan. We then added spinning and fabric processing machinery to our portfolio, and today Sagar represents around 40 textile machinery manufacturers from 14 countries with sales from the textile machinery and accessories segment alone expected to reach Rs. 600 crores in the current fiscal and to touch Rs. 1,000 crores in 2016-17.
Who are the major principals you represent in the textile industry?
Our major principals are Toyota and Murata of Japan and Morrison of the US. We are the sole representatives of these two companies in India and whose first machine was sold to Arvind Ltd. in 1996. Morrison is the only company having the denim rope dyeing technology in the world, outside of China.
In socks knitting, Sagar, the exclusive agent of Lonati in India, is the world’s biggest manufacturer of socks making machines. It also represents Xetma Vollenweider GmbH for its raising, emerizing, brush sueding and combination machines. We have calendars for textiles & nonwovens from Andritz Kusters of Germany and warping & sizing machines from Ukil Machinery Co. Ltd. of South Korea.
Among Indian companies, we represent Kusters Calico Pvt. Ltd. for fabric finishing machineries, Dalal Engineering Pvt. Ltd. for HTHP fully automated fibre and package dyeing machines, Arvind Envisol Pvt. Ltd. for zero liquid discharge system, Ingersol Rand (India) Ltd. for all types of screw, centrifugal air compressors and dryers, and Phenix Construction Technologies & Proflex Systems for pre-engineered building materials and roofings.
The Sagar Group also represents a few of these companies in global markets. In the case of Toyota, Sagar oversees its sales and marketing in several countries, mainly in the Middle East and Africa, including the UAE, Bahrain, Mauritius, Madagascar, Ethiopia and Tanzania, to name a few. We have further sold Morrison machines in Ethiopia, Bahrain, the UAE and Bangladesh.
What is Sagar’s core area of specialisation within the textile manufacturing value chain?
Sagar has presence mainly in spinning, weaving and fabric processing technologies and to a certain extent in technical textiles. We don’t have any role in garmenting for the main reason that we have traditionally been strong in the western region of India, while the apparel industry is mainly located in the northern and southern regions.
Apart from our textile technology business, the Sagar Group is the only Indian Agency House which has presence across the entire textile value chain, from raw cotton, fibres, filaments, yarns to fabrics and garmenting.
Can you give an idea about some of the latest products and technologies launched by your principals?
We recently tied up with Zancaner the Italy which manufactures fully-automated plants for handling and packaging of every kind of yarn cone, including labelling and boxing machines. The Zancaner technology operates right from picking yarn cones on the winding machine to labelling, wrapping in a poly bag, bar coding, weighing, arranging cones into cartons and finally pelletizing and sealing the carton. It has a capacity of handling 1,000 cones per hour or 25 tons per day and just needs one person to handle it instead of 40. The payback period is less than two years. There is thus no room at all for human error like mixing up of counts or wrong labelling, which is why we are so bullish about the machine.
Since how long has Sagar Group been associated with Toyota?
We have been associated with Toyota since December 2002, and we are its largest agent across India with an installation base of over 5,000 machines till date of Model JAT 710 & JAT 810 and sales of further around 1,000 sets which are under various stages of negotiation.
Toyota recently launched JAT 810 air jet loom, which is an 8 Shafts, Electronic Shedding machine without cam box. Traditionally weaving machines have cam box or dobby boxes, but for the first time Toyota has patented the technology of e-shed and which earlier had 16 Shafts and has now added a new model with 8 Shafts technology. It does not have a cam box, so there is no fixed dwell. In 2014, we installed around 120 Toyota JAT 810 8 Shafts E-Shed machines at Arvind Ltd., taking the total number of installed Toyota machines for Arvind to 560 sets.
Like Toyota, who are the other major principals whom you’ve helped establish strong presence both in the Indian and overseas markets?
We have been associated with Murata Machinery since 1990. We sold the first QPRO II Link Coner machine in Gujarat, and so far sold more than 500 machines to different customers in India. Sagar is also the biggest agent for Murata in western India, and Murata QPRO II winders have more than 80 per cent market share in our territory. Besides, Murata is the largest producer of winders in the world, and India is the second largest market for it after China.
To what would you attribute the success of the Sagar Group in sustaining strong relationship with both principals and customers?
The most important point to note here is that we are a family-owned company, so we have personal or one-to-one relationship with promoters of textile mills all over India. The Indian textile industry still remains owner-driven, so personal relationship with the promoters is the key factor behind our success, along with our excellent after-sales service & reliability.
Secondly, Sagar is the only textile agency in India to have a two-way relationship with its customers. Besides selling machinery, we also sells raw cotton and other fibres and buy yarns and fabrics from the same mills to which we sell key inputs.
While selling our machineries, we also sign agreements to buy back their finished products. As a result, we are in regular contact with our customers. Besides giving us an edge over other textile machinery agents, this is also a unique selling point (USP), enhancing customer confidence in the company after-sales service.
Almost 70 per cent of our turnover comes from the repeat business from the existing customers. We have nine offices across India and four overseas associate offices to service our wide customer base. I can proudly say that all the top 50 textile companies of India are our regular customers. We are either selling them machines or raw materials or buying finished products.
Another important point to note is that while selling new textile technologies to our customers, we also buy back their second-hand machines. This is indeed a big confidence booster for our customers, again something not done by other agencies.
Can you name some of the major textile projects in India and overseas executed by the Sagar Group?
We are the only agent in India to have introduced liquid ammonia finishing treatment for shirting from Kyoto Machinery of Japan and have sold this technology to Arvind Ltd., Bombay Rayon, Donear and Vardhman. These are the only four installations in India and all of them have been sold by the Sagar Group.
Secondly, with regard to the rope dyeing technology for denim from Morrison, we have executed 17 projects till date, and this year we are installing one more rope range at Anubha Denim which is part of the Pratibha Group of Surat, and at Kanoria Denim in Ethiopia. These are considered landmark projects.
We are also supplying Murata winding machines to Sintex Industries Ltd., which is setting up the largest spinning plant in India at Pipavav in Gujarat with three lakh spindles in the first phase, which will be ramped up to one million spindles in the next three phases.
Do you have plans for adding new principals or strengthening your presence in any specific segment?
We are constantly on the look-out for new technology and innovations. Earlier this year, we tied up with Zancaner of Italy, and now we are concentrating on technical textiles and have tied up with Cormatex of Italy, a market leader in needle-punch technology.
We also represent Lawer S.p.A. of Italy, manufacturing fully automatic and semi-automatic chemicals and powder weighing, dissolving and dispensing systems, which were also sold to Arvind Ltd. recently. The complete process is automated and done with the help of robots, thus avoiding any human error or waste.
The one area where we see a lot of wastage is dyes and chemicals consumption. Barring 10-15 companies, most of the 6,000 registered process houses in India have manual feeding of chemicals and dyes which are physically weighed and dispensed to machines. This automised system from Lawer guarantees zero-wastage of chemicals, water, etc. With an accuracy level of almost 0.001 grams, this can mean significant savings in cost for process houses.
The textile industry is slowly but surely moving towards eco-friendly and sustainable means of production. How do you rate machines from your principals on these parameters?
Our technologies are very efficient in terms of energy and water consumption. Previously we used to have fabric processing machines with a 10:1 dyes to water liquor ratio, which has now been reduced to 7:1, and now R&D efforts are on to further reduce it to 5:1. We have also machines which are ‘CE’ certified for safety. For instance, Toyota machines today consume 20 per cent less power than in earlier days.
We are also now active in pollution control equipment, for which we have tied up with Arvind Envisol, which is into manufacturing of zero discharge technology. We recently exported its equipment to African countries.
What are your future plans for the textile technology division?
Our thrust is on bringing in automation to the textile industry as the labour cost may be on par with developed countries within the next 6-7 years in India. Secondly, the textile sector, which is highly labour intensive, is already facing shortage of labour. The situation in the coming years may worsen as the next generation is averse to working in textile units mainly because of the monotonous work. So automation in various segments of the textile value chain is just unavoidable.
Secondly, we are looking at opportunities for zero discharge in water treatment solutions, mainly for two reasons: stringent pollution control laws which are expected to become stricter and water scarcity in the coming days.
Third, we are also looking at prefabricated engineered structures for the textile industry. Sagar was instrumental in executing the world’s biggest terry towel project of Trident, a prefabricated structure which was supplied by Phenix Construction Technologies, our principal.
The main advantage of a prefabricated structure is its fixed cost, as prices are negotiated at the beginning, whereas in brick and mortar costs can go up over the construction period of 12-18 months. The structure needs to be assembled with comparatively less labour and is also time saving as in the case of a 25,000-spindle structure. The time required to set it up is just two-three months, and it comes with a 20-year guarantee for water leakage.
Although the initial cost of putting up a prefabricated structure is higher than a brick and mortar one, the prefab structure has residual value as it can be shifted. This is not possible in the case of a brick and mortar building.
We also want to enlarge our presence in sales and exports of raw materials and finished textile products. We really foresee a boom in Indian textile exports with China becoming less competitive because of rising labour costs and stricter pollution norms. Further, several Chinese companies have already started downsizing their operations.
So our thrust is on exports of raw materials and finished textile products. Alongside, we are also considering import of specialised raw materials for the textile industry which are presently not available in India.