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MUMBAI, SEPTEMBER 16, Welspun Group — the $2.7- billion conglomerate with interest in home textiles, line pipe manufacturing and infrastructure — is banking on its recent innovation, Hygrocotton, to drive growth in textiles.

The fabric, made of the patented Hygrocotton, is soft, absorbent and maintains its softness after every wash. It also helps regulate the temperature of the fabric, keeping it cool in summer and warm in winter. Dipali Goenka, Joint Managing Director, Welspun India, spoke to BusinessLine on the company’s growth plans. Excerpts:

 

What is the impact of the global trade war on textile exports?

 

India has a great business potential for home textiles in the ongoing trade war because we are not only the largest producer of cotton, but also the largest exporter. India’s strength in cotton is going to be far higher than others. The Centre’s policy supporting exports should further help textile companies re-establish themselves. The integrated operation is a big advantage for textile companies.

 

There is a duty levied on textile exports from India to the US but it is not big when compared with that on shipments from China. Earlier, China used to provide subsidies and calibrate currency to support exports. It also had the advantage of cheap manpower, which is slowly fading. However, I would add that nobody can live without China. They have put up massive capacity in each of the sectors. It will take many years for the US to build capacity that can match China’s. The way we are heading towards protectionism in the US and the UK, the biggest challenge is we cannot live without one another. If India has advantage in cotton textile, nobody can match China in polyester.

 

Does Bangladesh still enjoy trade concessions in textile exports to the US?

 

I believe the US has withdrawn the trade concession given to Bangladesh. The advantage for Bangladesh is that they have a stronger currency and lower labour cost. The concern they had was in terms of compliance, high power cost and single port infrastructure. Their core strength was in garments largely due to low labour cost. The complete integration from weaving to spinning to final product is India’s advantage. The integration is the core in home textiles.

 

What is the impact of the rupee depreciation on textile exports?

 

The impact of depreciation comes in a package as textiles is more commodity driven. The crude has touched $86 and already people are talking of it reaching $100. Cotton prices have hit ₹48,000 as India is at the fag end of the cotton season. The high support price set for the next year (starting October) is going to put more pressure. We import about 10-20 per cent of high quality cotton. Being a major exporter we are able to somewhat offsetthe higher cost.

 

Any progress on your investments in innovation?

 

We have filed patent applications for 30 products. Of these, 12 have been granted patent. We believe Hygrocotton and Wel-Trak have good scope. Welspun’s Hygrocotton itself is a $200-million brand and growing strongly. We launched Wel-Trak about a year and a half back to track the source of the fibre. It is a sort of the advent of the blockchain technology. Our innovation revolves around consumer needs. We have 4.2-million data points on consumers’ views on what they are looking for and try to fulfil their needs through our products.

 

How do you plan to grow in the domestic market?

 

India will be the next growth driver for home textiles. Products made of Hygrocotton itself has seen a 25 per cent growth. The appetite for differentiated products in India is growing with discerning consumers who are looking at value not in terms of price but quality. We have a set a ₹1,000-crore revenue target in India and our journey has just begun. We set up a new team to focus on the domestic market.

 

According to recent studies, the poverty level in India is expected to reduce by six per cent by 2022 and there will be elevation of tier-III cities to tier-II and so on. This will throw up a good opportunity for our products. We may have a few experience stores of our own, but sales will be largely driven by mom-and-pop stores, large retail chains and e-commerce.

 

Source : The Hindu Businessline

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