Welspun India Ltd. (WIL), part of $3.5 billion Welspun Group, is one of the top three home textile manufacturers in the world and the largest home textile company in Asia. With a distribution network in 32 countries and manufacturing facilities in India, it is the largest exporter of home textile products from India. Supplier to 14 of Top 30 global retailers, the company has marquee clients like Wal-Mart, J C Penny, Target and Macy’s. The company clocked a turnover of Rs. 3,647.3 crores in 2012-13, against Rs. 3,219.4 crores in the previous year, driven by 30 per cent volume growth in sheets and rugs.
The vertical integration project to increase spinning and weaving capacity is on schedule and is expected to be completed by the end of FY14. The project entails installation of 170,000 spindles and 140 looms which will take the backward integration to ~75 per cent. The estimated project cost of Rs. 7-8 billion will be 72 per cent debt funded. The debt will receive 5-7 per cent interest rebate from the Gujarat Government and 4-5 per cent from the Central Government, under TUFS, resulting in an effective interest rate of 2-3 per cent. Apart from ensuring quality and availability of key intermediate products such as yarn and fabric, the backward integration will also contribute to substantial improvement in profitability. Welspun has recently commissioned an 80 MW power plant, which will further reduce power costs.
Commenting on the company performance, Mr. B.K. Goenka, Chairman, Welspun India Ltd., said: “Welspun has successfully completed one full year post the business reorganisation. The benefits of closing down our unprofitable businesses and consolidating the entire textile business under one roof are clearly reflected in the profitability metrics of the company. Our focus for the coming year will be on improving profitability and the effort underway towards further vertical integration is a step in that direction. The Awards we have received this year bear testimony to the fact that Welspun has created an enviable track record not only in quality and innovation but also in corporate social responsibility and sustainable development”.
Indian textile players, especially home textile players, have been able to increase their market share with superior quality and competitive prices. With China’s new cotton and yarn policy reducing the cost competitiveness of its industry, Pakistan being impacted by energy availability issues and Bangladesh facing scrutiny regarding workers’ safety, India is expected to further increase its market share in the medium term in the global arena. Welspun, with its global scale and reach as well as innovative product development, is well-positioned to capitalise on this opportunity.
The US market, where WIL already holds a dominant position, is slowly getting back on the growth path, with home sales and consumer confidence on the rise. Overall European market growth is expected to be sluggish, but the proposed EU-India Free Trade Agreement (FTA), when it happens, would give WIL an opportunity to increase its market share significantly.
Welspun is also gaining traction in newer markets such as Canada, South Africa, Japan, Korea and Australia. It will continue to have strong focus on the highgrowth domestic market through shop-in-shop in large retail stores, wholesale distributors, institutional clients and e-commerce.
WIL won the following nine Awards during the year for innovation and sustainability initiatives:
1. Responsibility Award for Excellence – Walmart
2. Global CSR Excellence & Leadership – Blue Dart
3. Most Preferred Furnishing Brand – MAGPPIE
4. Gold Supplier Award – TESCO
5. Innovation Award for Eco-Dry towels – Golden Peacock
6. Best Product Award – Wilkinson
7. Five Star Award – Macy’s
8. Vendor of the Year Award – Sears / K-Mart
9. Partners in Business Transformation award – Sears / K-Mart