Pandemic has made healthy living a priority for buyers
In this interview with Rakesh Rao, Kailash Lalpuria, Executive Director and CEO of Indo Count Industries Ltd, explains how India can benefit from the China Plus One policy adopted by the leading global brands.
With more than 37 years of domain expertise, Kailash Lalpuria – the Executive Director and CEO of Indo Count Industries Ltd – is a well revered personality in the world of textiles. Known for his exemplary entrepreneur skills, he has successfully contributed in conceptualising and establishing Indo Count as a true market leader. During the course of discussion in this interview with Rakesh Rao, Kailash Lalpuria explains the effect of Covid pandemic on consumer behaviour & their buying patterns and how India can benefit from the China Plus One policy adopted by the leading global brands.
Despite Covid, Indo Count Industries Ltd (ICIL) registered a solid performance in FY21 with PAT increasing by 241%. How did you achieve this feat?
At Indo Count, we were able to deliver growth owing to our continued innovation, even amidst a challenging environment. As the demand for home textiles grew, with our homes becoming the centre stage of our lives due to work from home, we ensured to cater to every consumer need in the bed linen segment, right from sleep performance to sustainability during the pandemic.
Our accelerated presence in health, hygiene and wellness products, quick adaption of market trends and design technology were able to make sure we could bring forth the best product offerings for customers everywhere during the pandemic. As a result, we enjoyed great growth, and recorded our highest ever sales volumes in FY21 and an ever-increasing presence in other markets, resulting in our PAT increasing by 241%.
While declaring your results, Indo Count announced a capex of Rs 200 crore. Could you please elaborate more on this?
Owing to the ever-increasing demand of our products, we undertook expansion of our bed linen capacity by 20%, from the existing capacity of 90 million meters to 108 million meters, by revamping and enhancing our site facilities. Through this expansion, we aim to further improve our capacity and increase our efficiency.
Our Brownfield Project also aims to upgrade cut & sew facilities and enhance the capacity for Top of the Bed (TOB) products. Additionally, we are modernising our spinning units with compact modern technology. Through these technological undertakings, our revenues are expected to increase by Rs 600 crores over the next 2 years, as we continue to grow as Indiaâ€™s largest exporters of bed linen.
Are you seeing a change in consumer behaviour and buying pattern due to Covid 19 pandemic?
Yes, there has been a significant shift in the consumer behaviour and buying pattern in the post pandemic world. One noteworthy shift is the rising awareness for health and hygiene products amongst consumers everywhere, and this is a trend that is only likely to grow further. The pandemic has made healthy living a priority for buyers, a phenomenon reflected throughout the world. The textile industry is also quickly adapting to the same and expanding upon wellness offerings.
Furthermore, owing to work from home, there is a rising preference for home textiles amongst consumers, as oneâ€™s living space transforms, becoming our office, our recreational area, as well as our entertainment & sleep zone.
What your analyses of Indian textile industry, in general, and home textiles, in particular?
The Indian textile industry stands at an advantage, as the country is the highest producer of cotton in the world, and enjoys an age-old textile heritage, along with the easy availability of labour and a well-established presence in global markets.
While there are many challenges in the international domain, such as heavy competition from
other leading exporters, the China Plus One strategy adopted by markets worldwide, as well as the rising trust enjoyed by Indian players will increase our countryâ€™s share of the global exports pie in the coming years in all textile segments, including home textiles.
Furthermore, the Indian home textiles domain in particular, is seeing a rise in demand as â€˜Work from Homeâ€™ culture continues to dominate the world. Whilst India continues to expand its international presence, the home textiles domain is witnessing much growth as it diversifies its products offerings and caters to the global demand.
Indian textile industry’s share in the global market has remained stagnant for the last 4-5 years. What measures should the government and industry take to increase India’s global share?
In the post pandemic world, Indiaâ€™s edge in the global home textile market has led to India being a preferred trade partner as the China Plus One strategy plays out.
We have seen a steady increase in Indiaâ€™s share in USA home textile market. Indiaâ€™s share in US import of:
Cotton sheet increased from 50% in CY19 to 59% in Q1 2021,
Cotton pillowcases increased from 53% in CY 19 to 60% in Q1 2021, and
Cotton bedspreads increased from 17% in CY 19 to 20% in Q1 2021.
However, some measures the industry can undertake during this time to increase Indiaâ€™s global share includes cashing in on the new Foreign Direct Investment (FDI) policy, as India has allowed 100% FDI in the Indian textiles sector under the automatic route. Additional measures from the governmentâ€™s end can include relaxing trade tariffs further and continued policy support.
Could you please highlight on Indo Count’s exports performance? How do you intend to increase the exports in future?
We are the largest exporters of bed linen from India and currently hold the highest market share of bed linen in USA. Our main market of US showed strength with all time high retail sales. This staggering export performance amidst the pandemic was possible owing to the adoption of omni-channel distribution, consolidation towards big box retailers, and our diversified health, hygiene, and wellness offerings. In the future, we aim to further strengthen our legacy in leading the Indian exports domain, through design innovation, as we continue to cater to the needs of the consumer through our capacity expansion and adoption of market trends.
Are rising fibre and yarn prices a concern for you?
Rising prices are a reality for every industry. While the fibre and yarn prices keep rising, India remains the largest producer of cotton in the world. Additionally, our best-in-class innovation and robust supply chain ensures that our costing is least affected as we continue to improve our efficiency through our expansion undertakings. Hence, rising fibre and yarn prices are not a major concern.
Will China Plus One policy create more opportunities for Indian textile companies?
The China Plus One Policy has created a major shift internationally, as markets everywhere distance themselves from trade with Chinese companies. This is bound to act as a significant advantage for India, as China is a leading competitor in the textile trade. Additionally, even as Chinaâ€™s trust has reduced, India has increasingly become more popular for international players everywhere, owing to its low fabric costs and varied textile offerings.
What are emerging trends in textiles, in general, and home textiles, in particular?
The pandemic has made consumers everywhere more conscious of the products they choose to use in every sphere of their lives, making sustainable offerings more desirable, especially in the textile domain. As a result, sustainable products have been witnessing a steady growth in recent times. This is a trend that is reflected significantly in the home textiles domain as well. Additionally, health and wellness products are also seeing a never seen before demand in the home textile segment, as safety and healthy living continue to remain a priority for buyers everywhere.
What are your short- & long-term growth plans?
As the largest exporters of bed linen from the country, we see ourselves expanding even further in the long term. In about three decades, Indo Count has established itself as the brand with the highest market share of bed linen in USA and we are working on expanding our footprint in other lucrative markets overseas as well as growing steadily in India.
In FY21, our volumes stood at 78.17 million meters and in FY22, we expect volumes to be in range of 85-90 million meters. Additionally, in the short term, we are targeting to reach 3% of sales in the domestic segment from 1% in FY21 and for ecommerce to reach 8% of sales from 4% in FY21 by FY23.