Customers look upon Indians as a reliable supplier

Maral Overseas is a vertically integrated textile company which has set new benchmarks as Industry leader. As a reliable supplier of world class products and best business practices Maral has earned its reputation in the national as well as international market. Shekhar Agarwal, Owner, Maral Overseas, presents Divya Shetty with a company overview and discusses its future plans.

Kindly brief us about your company.
Maral Overseas is a company that was established in 1991, and it operates a manufacturing plant located in Indore. Presently, the company boasts approximately 80,000 spindles dedicated to spinning, with an additional 19,000 spindles having commenced operations just last month. This expansion will bring our total spindle count close to 100,000. Our operations encompass various facets of the textile industry, including yarn dyeing, knitting, dyeing, finishing, and digital printing of knitted fabrics. Our fabric production capacity amounts to approximately 750 metric tonnes per month, while our yarn production stands at around 1,600 tonnes per month. Furthermore, we maintain four garment manufacturing units within the National Capital Region (NCR), specialising in the production of knitted garments for women, children, and men. Our product range spans a wide spectrum, encompassing casual wear, leisure wear, children’s clothing, and sportswear, showcasing our diverse capabilities.
In the garment segment, we possess in-house capabilities for centralised automatic cutting, digital printing, as well as garment washing and finishing. Consequently, our garment division has a substantial monthly production capacity of nearly 500,000 pieces. Our company demonstrates significant diversification through the production of various yarn types, including cotton, synthetic, polyester-cotton, acrylic-cotton, viscose-cotton, modal-cotton, and various other yarn variants. Similarly, our fabric production spans all structural and finishing variations across a range of blends to cater to diverse applications.
Traditionally, our primary clientele includes the apparel and home textile sectors. However, we have recently ventured into the production of specialised yarns and fabrics for the defence sector, in addition to flame-retardant fabrics, among other offerings.

Can you tell us in detail about what the company’s performance in 2023 was and what are the challenges and opportunities for your company in future? 
Our organisation has traditionally operated as an export-oriented entity. Initially, we functioned as a 100 per cent Export Oriented Unit (EOU). Subsequently, we assessed the opportunities presented by the domestic market, prompting us to transition from an export-oriented unit to a standard domestic unit. Presently, our production is evenly split, with 50 per cent directed towards the domestic market and 50 per cent for export, encompassing both yarn and fabrics. In the case of garments, approximately 80 per cent of our production is designated for export.
It is noteworthy that we have established collaborations with major international brands situated in Europe, the United States, and Japan. These collaborations involve our designation as nominated suppliers of yarn and fabrics, and we also retail a significant portion of our garments in countries such as Germany, Japan, the United States, and Canada. Our yarn is distributed to nearly 47 countries, while our fabrics find their way to approximately 10 different nations.
We consider ourselves fortunate to maintain enduring customer relationships, some of which have extended for over 25 to 30 years, contributing significantly to our on-going business. This advantage can be attributed to two primary factors. Firstly, we consistently deliver exceptional service and quality to our customers. Secondly, we are competitively priced, further strengthening our client relationships over time.

Can you explain us more about Maral Overseas’ global presence? And how global companies perceive India as a market?

There are few challenges on our way which needs to be resolved. Firstly, countries such as Bangladesh, Vietnam, Cambodia, and various African nations benefit from preferential trade agreements with Western countries, thereby introducing formidable competition. Secondly, their production costs are notably lower than ours, primarily due to reduced labor expenses, heightened productivity, decreased logistics expenditures, and lower power and interest rates. Consequently, we encounter competitive pressures. However, it is worth noting that there are also numerous opportunities available to us. We possess a long-standing presence in the textile industry in our country, which has earned us a reputable global standing. So customers do look upon Indians as a reliable supplier. 
Moreover, a significant opportunity has arisen from the shift in business and trade away from China, a phenomenon commonly referred to as the “China plus one” policy, as you may be aware. While India has not yet secured a major share of this business, we are making progress. We are observing an increasing number of customers in the United States and Europe expressing interest in expanding their business ties with us. This presents a substantial opportunity for our organisation.

Do government policies support industry growth, or do you have suggestions for improvement?
Honestly, our expectations from the government should not be excessive; instead, it is incumbent upon the industry to take proactive measures. However, I would like to address only two specific issues. Firstly, the inverted duty structure within the Goods and Services Tax (GST), particularly in the context of synthetic textiles, poses a challenge by impeding our working capital flow. We are not receiving a full refund on the GST payments we make, and this warrants attention as our primary concern.
Secondly, the industry has been awaiting funds from government policies such as TUFS (Technology Upgradation Fund Scheme), which remain blocked. We kindly request the government to prioritise these two areas. Addressing these concerns would significantly enhance our profitability and meet our working capital needs. Beyond these considerations, we do not anticipate substantial government intervention.

What kind of trends are you witnessing in the textile industry and how is Maral Overseas tapping them? 
Our company’s philosophy has consistently emphasised the importance of value addition. Over the past several years, we refrained from expanding our spinning capacity, unlike many other spinning companies. However, this year, we have made a significant investment of approximately Rs 150 crore to augment our spinning capacity, primarily focusing on value addition. Specifically, we have established a plant with 19,000 spindles dedicated to the production of value-added mélange yarn. This addition was prompted by the need to diversify our product profile comprehensively. While we have been supplying gray yarn, dyed yarn, double yarn, Lycra yarn, slab yarn, and various other value-added products, our customers expressed the desire for mélange yarn to complete their range of required products.
Furthermore, we used to procure mélange yarn from external spinners, but with our new production capacity, a significant portion of mélange yarn will now be produced in-house. We anticipate utilising up to 30 per cent of our own mélange yarn production for our internal needs. Another notable development is in the realm of fabric production. We have adopted cutting-edge technologies such as continuous bleaching range and digital printing. It is worth mentioning that there are only a few companies in the country equipped with digital printing capabilities for knitted fabrics, and we are among the select few. Moreover, we have extended digital printing to our garment production as well. Additionally, we have introduced special finishes on our garments, all of which have been executed in-house over the past two years.
What are your expectations from 2024? 
The year 2022 presented significant challenges for the textile industry, primarily due to record-high raw material prices. This had a notable impact on our operations, as many international orders were cancelled by customers owing to the excessively elevated costs of raw materials. The Ukraine-Russia conflict further exacerbated the situation, leading to substantial inflation in Western markets, including Europe and America. Retail sales have endured a prolonged period of decline, spanning over a year and a half.
Currently, in the on-going year, our capacity utilisation for fabric and garment production is below full capacity, hovering in the range of 65 per cent to 70 per cent. Despite adding additional capacity in the preceding year, our overall capacity utilisation stands at approximately 70 per cent to 75 per cent. However, recent market trends are showing promise, with customers gradually returning, making inquiries, and requesting sampling. It is anticipated that the situation will improve next year, although the current year remains challenging.