Welspun is setting up a fully integrated and independent flooring plant in Telangana. The aim is to become a one-stop flooring solutions provider for domestic and international markets. The new facility is coming up in Telangana which was earlier planned in Gujarat. Welspun had announced foray into manufacture of carpets, area rugs and carpet tiles. The carpet facility ushers in a new chapter of its growth story by adding flooring solutions to its current portfolio of home textile products.
Welspun is investing Rs. 11 billion in this new flooring facility with a capacity to produce 27 million sq. metres p.a. The company is planning to begin commercial production in the new Telangana plant by end of calendar year 2019.
Mr. B.K. Goenka, Chairman, Welspun Group, said: “Flooring solutions has immense potential as a growing business. We believe that this segment will benefit from the synergies with our existing product line and customer base, thereby creating strong growth opportunity for the domestic as well as international market. The investment represents our ongoing pursuit of expansion and is a testimony of our strength as one of the leading manufacturers globally.”
In the area of Technical and Advanced Textiles, Welspun is looking at opportunities in manufacturing products for specialized use in healthcare, fire departments, aerospace, defense, automobile, railways and other utilities. These products include specialized features such as fire retardants, stain resistant, anti-bacterial, PET resistant, and soil resistance, among others. Currently this segment contributes to 2% of sales of the company’s sales.
Welspun is also looking to tap the opportunity in Bedding segment. The company feels there is large untapped opportunity in basic bedding, comforters and quilts. Currently, China dominates the market and India is gradually making inroads. Another important segment is the US hospitality market which is estimated at US$1.5bn (i.e. for towels and sheets). Welspun currently earns US$50mn from this category indicating huge future growth potential.
Another high potential segment is the global wellness economy which is estimated at around US$3.7 trillion. Welspun has partnered with Stay Well to tap global wellness potential. Stay Well infuses wellness into hotel rooms with features and programs to maximise the guest experience and minimise the impact that travel has on the human body.
Welspun is equally focussed on building its brand in the Indian domestic market. The Indian Urban Home Textile market is expected to grow from Rs. 257bn in 2016 to Rs. 438bn by 2021 (i.e. CAGR of 11.25%). The government’s policy on ‘Housing for all by 2022’ is expected to boost domestic consumption and implementation of GST is expected to further accelerate move towards organised sector.
Welspun is adopting a two-pronged strategy of focusing on domestic as well as international markets and parallely partnering with leading hotel chains and wellness centers.
Wel-Trak system
Welspun successfully rolled out the Wel-Trak system, a patented, end-to-end traceability process. This revolutionary process ensures that customers and consumers can trace the provenance of the cotton raw materials throughout the supply chain from farm to the retail shelf.
Wel-Trak delivers end-to-end traceability by deploying automated data capture using RFID, customised software for validation and robust IT & ERP systems to enable smooth operations across all stages of production. In fact, the merchandise with the Wel-Trak traceability solutions are now available on shelves in the US stores at multiple retailers.
Welspun has set a target of $2 billion in turnover by 2022. To meet this target the company is focusing on new markets, new channels such as e-commerce and hospitality, and new products such as flooring solutions and advanced textiles. For achieving zero net debt, Welspun is focusing on improving its free cash flows by rationalising capex through ancillarisation and optimising working capital.