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Chirag Pittie: SVP Global aims to become debt-free

May 13, 2021
Chirag Pittie: SVP Global aims to become debt-free

Pittie Group's SVP Global Ventures Ltd, incorporated in 1982, is one of the fastest growing cotton yarn manufacturers in India. With an aim to become the most efficient spinner in terms of EBIDTA margins, it is focusing on boosting productivity and streamlining operations. SVP Global Ventures' plants are equipped with state-of-the-art technologies, which enable better quality of production and at higher operational efficiency. Recently, SVP Global was accredited as an approved supplier for Swedish retail giant IKEA. In this interview with Rakesh Rao, Chirag Pittie, Whole-Time Director, SVP Global Ventures Ltd, highlights on the changing dynamics of the spinning industry in India and how his company is gearing up for the future. 


The increase in cotton and yarn prices has become a major emerging issue to many spinners. What kind of impact will this have?

Increase in yarn prices have benefitted spinners. Cotton increase is less than the increase in yarn prices leading to better operating margins for spinners. The recent increase in yarn prices can be primarily attributed to structural shift in textile supply chain, away from China. The shift that was happening gradually has now accelerated.  Given the size of China’s textile operations a small shift is also having a major impact on the comparatively much smaller textile industry of India.

 

 How would you describe the current state of the Indian spinning industry?

Currently, 80% of Indian spinning capacity is more than 20 years old. There has been very less capacity addition in the last 10-15 years. The subsidies that were available for the sector have expired and there is now a barrier to entry for new units. As a result, the new and modern units already setup will gain from better operating margins. The subsidies continue to exist for downstream fabric, processing and garment units, which continue to see capacity addition fueled by high demand. As a result, the demand for yarn will continue to increase.

 

What are the challenges that this industry encounters? What would be your suggestions to overcome them?

Although India is very cost competitive, our capacities are much smaller than China. The recent fallout of COVID pandemic and China Plus One, coupled with human rights allegations on textile products originating from China, has resulted in supply chain shift in favour of India, Bangladesh and Pakistan.

 

To capitalise on the opportunity presented from China, there should be incentives given to the industry to rapidly modernise the entire industry. Downstream capacity additions can happen at a fraction of the capital cost and can provide huge employment, foreign currency generation from exports for the country.

 

What kind of impact did the pandemic have on the industry and your business?

Due to Covid-19 pandemic, all the manufacturing units faced severe disruptions. From shutdown during lockdown, to shortage of workers, supply chain disruptions etc. We started operations towards the end of April 2020 after a stoppage of 1 month. However, our customers didn’t start till August-September. This resulted in creation of huge inventory. However, the industry bounced back with huge increase in demand by November.

 

Do you think India is reaping the benefits of China-plus one?

China plus One has been extremely beneficial for India. The global textile chain is scrambling for alternate supply chains to reduce the dependence on China. India must take advantage of this opportunity by modernising and increasing capacity in the downstream textile industry which can be done at very low investments. Also, this capacity addition can be done in very short period of time. This will give a big boost to GDP as the downstream textile industry is a high employment generator as well as boost foreign exchange through exports. India already has the second largest spinning capacity in the world. Spinners are also benefitting from a sharp increase in demand.

 

When it comes to automation and digitisation in the spinning industry, very few manufacturers have made the leap and invested in technologies. Why is that?

Spinning is a capital-intensive industry. Automation and digitisation are very expensive to carry out. Since the building is customised to the machinery installed, it is also very difficult to carry out automation in an existing mill. Tamil Nadu, which has 60% of India’s spinning capacity, did not offer any incentive to the industry for modernisation and capacity addition. There was already a logistic issue in Tamil Nadu due to non-cultivation of cotton. The yarn markets of Maharashtra, Madhya Pradesh, Gujarat, Rajasthan and Punjab also are very far away and expensive to transport. As a result, the units located in the other parts of the country modernised and added capacity whereas Tamil Nadu has continued without capacity additions or modernisation.

 

What steps have been taken by SVP Global Ventures to progress towards automation?

Our manufacturing units are the latest and most modern and automated units of its kind in the world today. The technology involved are absolutely state of the art and based on machinery from worldwide leaders such as RIETER (Switzerland), ELECTRO-JET (Spain), LMW (India), USTER (Switzerland) and SCHLAFHORST (Germany). Some recent technology used are as follows:

·         Spin Connect to access and control the data globally on any smartphone

·         Energy saving kits with IE4 motors and silent spindles

·         Linkconer has features like Computer Aided Metering and Computer Aided Package and with RFID chip in each caddy to identify rogue spindles

·         Loepfe Clearer includes Lab Pack, Polypropylene sensor and Mill Master on every drum

·         Autocoro machine: Twelve synchro piecing and all machines with seamless lot change to boost productivity

 

What types of technologies are you planning to invest in the future?

The company’s plants are equipped with latest and up to date technology, which enables better quality of production and at higher operational efficiency. These are the absolute latest technologies across the world. These are not available with other mills in India.


The company’s yarn output (40 CCW weaving) per spindle is at around 153 gms-154 gms, which is the highest in the industry. The company also has maximum certifications for its products from key quality assurers related to textiles such as Organic, BCI, OEK-TEX STD.100, Fair Trade, SUPIMA Gold and ISO. Having these certifications establishes our unit as one of the highest quality, HSSE standards and results in large brands and premium customers purchasing their yarn requirements from our unit as compared to our competition. The company has also recently been accredited as an approved supplier for IKEA which is a testament to the company’s products, material, and services adherence to minimum environmental, social, and working conditions requirements.

 

For our future expansions, we would continue to invest in the latest technology to manufacture the best quality of finished products at higher operational efficiency. 

 

Which are your major markets in India and abroad?

In India, our major markets are Bhilwara, Ichalkaranji Shirpur, Indore, Ahmedabad, etc. Our major export markets are Bangladesh, Pakistan, Vietnam, China, etc. As a business strategy, we are focussing our India operations to cater to domestic demand and Oman operations to cater to export demand.

 

What are the long-term and short-term goals set at your company for the next 2-3 years?

Short-term goals are to boost productivity to take advantage of the higher demand. There is also a sharp focus on debt-reduction and streamlining operations. Long-term the company aims to become debt-free and to be the most efficient spinner in terms of EBIDTA margins.

 


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