New demand created by China Plus One is here to stay
Sanathan Textiles is one of the few companies in India with a major presence across polyester, cotton, and technical textile sectors. The company’s business strength lies in the diversity of its product range and the relatively higher share of value-added products. With a diversified product portfolio, Sanathan Textiles manufactures more than 12,900 varieties of yarn products with more than 100,000 SKUs that are used in various forms and for varied end uses. Due to the increase in demand for recycled products, Sanathan Textiles has also started a recycled yarn business, called Rivero, to cater to this increase in demand. In this exclusive interview, Sammir Dattani, Executive Director of Sanathan Textiles Limited, shares more details about the company’s various businesses and new opportunity areas.
How was the performance of Sanathan Textiles in the first six months of 2021-22? What is driving the demand?
The performance has been excellent. Because of the high demand, we are able to operate at over 95% utilisation rate. China Plus One factor has created exception new demand for our yarns and textile products around the globe. The fact that these new customers are placing recurrent orders indicates that the new demand created by China Plus One is here to stay.
There is additional demand for the entire textile chain as India’s demand growing at a quick rate due to local consumption growth and foreign brands coming to India to sourcing and manufacturing locally.
These brands have sourcing and manufacturing operations in India, as well as supplying items created in India to other nations.
Could you please elaborate on your business and its 3 main yarn verticals – i.e. Polyester yarn products; Cotton yarn products and yarns for technical textiles?
At Sanathan Textile, we have 3 yarn businesses at one location.
Polyester filament yarn contributes about 75% of our revenues. Here, we have a fully integrated facility with backward and forward integrations. Since we have our own in-house polymerization our raw materials are petrochemicals namely PTA and MEG. While our forward integration ensure we sell only value added yarns of draw textured, air textured, twisted, FDY etc. We completely avoid sale of intermediary products like POY and Chips to ensure our capacity is fully utilised only to sell value added yarns. These yarns are made is a wide variety of lusters like Bright, Semidull, Full dull, Cationic yarns. We also offer a wide range of coloured yarns, fancy yarns and niche (made to order) yarn products. We recently launched our range of recycled yarns under our brand Sanathan Reviro to offer new yarn products to cater to the growing demand for sustainable textiles.
Our cotton yarn business is keenly focussed on very fine counts. Here, we make 100% compact cotton yarns of very high quality and consistency for high speed knitting and weaving applications. These cotton yarns find high value in bed linen, home textiles and apparel end-uses. The setup is an advanced facility equipped with the latest suitable automation solutions for consistent quality and high productivity. This division is about 20% of our revenue contribution and adds to a much higher EBIDTA contribution.
The division offering yarns for technical textiles and industrial end-use was started in 2018 and the demand for the same has been growing consistently. In fact, it has been reported by agencies like CRISIL etc that demand for technical textiles is expected to grow at a CAGR of 17% in the coming years. Our setup is the most advance designed and installed by Oerlikon Barmag Germany, since these yarns are deemed as the highest discipline in filament yarn manufacturing and can pose a big challenge for manufacturers without the correct know how. However, our technical team tackles these challenges to provide some of the best quality yarns for technical textiles for our customers.
We offer these yarn in a range of 600 denier to 6000 denier and have a wide product basket in this division like regular shrinkage, high tenacity, low shrinkage and super low shrinkage yarns.
Are you seeing growth in demand for technical textiles in recent years? Will the government’s PLI scheme for MMF and technical textiles help companies like Sanathan Textiles?
Technical Textiles in India is growing at a tremendous pace. This market is predicted to increase at a CAGR of 17% in the next years, according to agencies. The government’s PLI scheme is a huge boost for the textile manufacturing industry, and it will drastically alter the industry’s trajectory over the next five years.
Companies like Sanathan Textiles have tremendous indirect benefit since downstream customers are increasing capacity rapidly creating huge demand for all types of yarns.
Raw material prices have been increasing. What is the impact of this on the business?
Increasing raw material prices and volatility have definitely been a big concern for the industry in the recent months. But due to the strong demand domestically and internationally because of China Plus One strategy from countries around the world, the impact of this on business has been minimal.
What are your plans to grow your exports business? Has Covid pandemic opened up more opportunities for Indian textile companies?
Our export business of yarns directly contributes around 13-17% of revenue whereas indirect export of our yarns in form of fabric garments and apparels is even higher. Since COVID, the world has adopted China Plus One for all purchasing. India is the second largest in textiles around the world and the entire industry has benefitted tremendously from this shift. Repeat orders from these new customers post COVID is a clear sign that this new demand is here to stay.
Could you please elaborate on your manufacturing plant?
Sanathan Textiles has always prioritised having a well-designed and well-equipped manufacturing plant. Our facility is cutting-edge in terms of technology and environmentally mindful. Throughout all procedures, you will witness the best and most effective use of automation. Where necessary, we have automated doffing and packaging handling equipment installed. To satisfy global inventory standards, we also offer vehicle warehouse facilities.
Oerlikon Barmag, Reiter, LWM, Wipro PARI, and other reputable machinery and technology providers provide and install all of our equipment.
Having the most up-to-date in-house labs and testing equipment that meets international standards ensures material traceability, continuous benchmarking, and product analysis for quality improvement and consistency.
This is ethos is visible across all three of our yarn business setup (polyester yarns, cotton yarns and yarns for technical textile and industrial use).
According to you, why is it important to have a modern manufacturing facility to be competitive in the global market?
Delivering the right product with good and consistent quality, just in time as per the customer’s requirement is very important. A combination of all these things makes one a leading dependable supplier globally.
To achieve this promise and target in manufacturing industry is only possible if you have the right manufacturing design, setup and installed by leading technology and solution providers from around the world along with optimum use if technology and automation to ensure satisfaction to customers year after year.
How has been the response to your recycled yarn business, Rivero? What are your plans to further scale up this business?
Environmentally awareness and Sustainability requirements are growing rapidly in the fashion and textile industry. It is the need of the hour. Looking at this, we recently introduced our Recycled yarn products under our brand Sanathan Reviro. We have had a fantastic response and demand for these yarns from customer and brands.
Would you like to elaborate on some of the measures taken by the company towards sustainability?
With the second generation fully involved in the running of the business at Sanathan Textiles, we are very aware of our surrounding, our community and our responsibilities. Sustainability is at the heart of every decision we make at Sanathan Textiles and it’s our constant endeavour. Keeping in sync with this ethos, we installed a 2.3MW solar power facility for in-house supply of renewable power. Also, we recently converted our entire packing carton to FSC paper. We have already installed a Zero Liquid Discharge Solution facility and systematic disposal of hazardous waste.
Our foray into BornDyed coloured yarns, which uses dope dyed technology to produce colour polyester yarn, an eco-friendly solution to producing coloured yarns using dope dyed technology. It offers benefits like reduction in consumption of chemicals, water and lower production costs. Shortening the supply chain helps in reducing production costs and ensuring a reduction in the ecological footprint of the final products.
As the demand for sustainable textile increases, we at Sanathan have decided to contribute to the endeavour by producing yarn from PET chips which are made from waste recycled bottles. With Reviro our endeavour is to contribute to the new worlds efforts towards Reducing, Reusing and Recycling.