“We are expecting 15 -18% growth during the current fiscal”
Dollar Industries has become one of the leading brands in the hosiery sector with an enviable 15% market share and a significant percentage in textile exports of the total production in the Indian hosiery market. The hosiery brand has extensively penetrated across 29 states in India. Not only that, the products have also gone beyond the boundaries of the country and has emerged as the highest selling Indian innerwear brand in the UAE and the Middle East. In this dialogue with Divya Shetty, Vinod Kumar Gupta, Managing Director, Dollar Industries Limited, describes the current state of the Indian textile sector, in especially the hosiery industry. He also discusses the company’s latest innovation and growth strategy.
How has the technical hosiery market evolved recently, and how has Dollar Industries adapted to it?
Dollar Industries, under the constant process of expansion and scaling up, is the only hosiery manufacturer to have implemented an Integrated Unit from Fibre to Fashion. The recent pandemic has ensured a quick upgrading of manufacturing processes and adapting to the ‘New Normal’ as the key to sustenance. At Dollar, we fully realise the extreme potential of digital platforms. We have undertaken the following digitalisation initiatives to enhance outputs –
- Digital Distribution Management System
- Sales Force Automation System
- Auto Replenishment System
Which of the product category offered by Dollar Industries (man, woman, junior, thermals, protect) is in the highest demand today?
The growth in revenue was driven by our flagship brands Dollar Man and Dollar Always along with Dollar Woman which is also a key segment to drive revenue under Dollar’s product portfolio.
Dollar Industries has become the most popular Indian innerwear brand in the Middle East; does the company intend to expand into the West?
Currently, from export, we generate 10% of our revenue for FY-2021-22. In regard to expansion in the West, in near future, we are planning to explore the West too.
What kinds of challenges hosiery manufacturers are currently facing in India? Is rising raw material cost (cotton as well as MMF) a cause of concern?
From March 2020 onwards, the global economy was badly impacted by the onset of the COVID-19 pandemic. As several factories were forced to shut shop, the migrant labourers bore the brunt of the nationwide lockdown, with their livelihood being affected badly. The production of yarn in factories also came to a standstill due to the lockdown.
Now the upsurge in export of yarn to Europe and the USA owing to disruption of their supply lines because of earlier sourcing from China has resulted in the shortage of yarn in the domestic market. As cotton prices rose, we had to increase the price of our products.
Currently, the hosiery industry is under a lot of pressure owing to the price of cotton yarn. Industry representatives have met the Union Textile Minister urging him to abolish the 5% import duty on inward cotton so import becomes cheaper than domestic prices and to impose export duty on the export of cotton yarn, so the Indian market doesn’t suffer.
Is the company involved in any environment-friendly practice? Cite with some examples.
We have typically used renewable energy for our production. ‘Making it the Green Way’ has been Dollar’s motto. As part of the company’s ‘Green Mission’ initiative, the existing 4 MW Solar Power Plant will be increased by 2MW unit taking it up at 6MW.
As part of Dollar’s environmental policies, the state–of–the–art integrated plant at Tiruppur has laid down strict green guidelines to be followed. The water generated from the plant in Tiruppur is treated chemically and biologically at the effluent treatment Plant which has a capacity of 1000 KL zero liquid discharge. The bulk of the treated water is reused in the factory while the remainder goes for watering plants and landscaping the area. Any sludge is disposed of at a government-appointed disposal site.
Between 2008 – 2013, the company installed 4 windmills with a power generation capacity of 4.95 MW, that can generate approx 70 lakh units of power annually.
Which is new the area of opportunities the company is focusing at present?
Dollar Industries, which began its journey in 1972 as Bhawani Textiles, now holds 15% market share of the branded hosiery segment in India. As a part of its Vision 2025, Dollar has earmarked Rs 120 crorefor expansion and new launches. Dollar would be adding another new spinning mill in Dindugul and starting a new world-class warehousing facility- cum -Hosiery Park in Jagdishpur, West Bengal that would act as a centralised dispatch centre easing out logistics, enhancing economy of scale, rationalisation of staff and output and facilitating faster delivery.
Innovation and product development are key for success in hosiery. How does Dollar take care of these two aspects?
Dollar’s biggest legacy is the fact that as an organisation and brand we accept the fact that the only constant is change. As such, we have continued to change, reinvent ourselves and revamp our brand and corporate portfolio over the years to make ourselves contemporary with time.
In the recent past, we have revamped our brand architecture and unified all our products into 5 major categories – Dollar Man, Dollar Woman, Dollar Junior, Dollar Always, Dollar Thermals, as part of our aggressive growth strategy. We adhere to the latest technology for production and innovation of our products to create a benchmark in the industry.
What is the state of the Indian textile industry right now, and what does the future hold?
The Indian textile industry is one of the oldest and the most diverse industries in India. Currently, it contributes 2% to the country’s GDP and 7% of industry output in value terms, The share of textile, apparel and handicrafts in India’s total exports was 11.4% in 2020-21.
Post COVID-19, the future of the Indian textile industry looks promising as it is supported by both strong domestic consumption as well as export demand.
What are your long- and short-term growth plans?
The pandemic was a challenging time for the entire textile industry and Dollar Industries was not exempt. That said, the company’s performance remains quite satisfactory for FY2021-22 and in line with its growth trajectory path. Dollar has performed very well in the first half of the current financial year. We saw export sales contributing to 8% of the total revenue and the remaining 92% from the domestic market. The company is expecting a 15 -18% growth in turnover during the current fiscal, on the back of a higher demand for our economy range of products.
We have registered a 7% growth in turnover at Rs 1037 crore in FY21 as against Rs 969 crore in FY20. We have taken up an initiative named ‘Project Lakshya’ to be implemented in 5 states – Karnataka, Maharashtra, Gujarat, Rajasthan and Telengana – that will work towards increasing our reach and range in these markets. We have expanded our Dollar Woman product range by launching a range of bras. We also launched EBOs in different parts of India. We are hopeful of doubling our turnover to Rs 2000 crore in the coming 3-4 years.
What is the present production capacity of the company, and how do you aim to expand it over the next five years?
The current production capacity is around 21 crore pieces/ annually, i.e. as of 31st March 2022. The production capacity will increase with an increase in demand.