The Hindu Business Line : `Textile industry not out of the woods fully'

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Coimbatore Feb. 13 As the Coimbatore-based Gangotri Textiles Ltd, which has presence in yarn, fabric and garment segments, formally commissioned the Rs 200-crore weaving and processing plant at Perundurai in Tamil Nadu on Monday as part of its Rs 351-crore expansion plan, the company's Managing Director, Mr Manoj Kumar Tibrewal, feels that the Indian textile industry is not out of the woods, yet.

He also wants the Government to chip in with its contribution in the formation of a textile city in the Coimbatore-Salem belt where after years of stagnation, fresh investment in different segments of the textile industry is pouring in to capitalise on the growing domestic market demand and the outsourcing opportunities available.

In an interview to Business Line, he outlines the growth prospects of his company and the industry and what it expects from the Government. Excerpts:

What was the contribution of various divisions in Gangotri Textiles — yarn, fabric and garment — to the overall turnover in 2005-06 and in the first nine months of the current fiscal?

Out of the Rs 148.12-crore turnover for the year 2005-06, the share of yarn sales was Rs 135.12 crore and garment was Rs 13 crore, and for the first nine months in 2006-07, out of the Rs 125.35-crore turnover yarn sales accounted for Rs 113.25 crore and garments Rs 12.10 crore.

What is the investment being made now? When will the expansion work be completed and the group achieve full capacity?

We have planned an investment of Rs 351 crore in the new project. As of now, we have invested Rs 260 crore. The expansion will be completed in March 2008.

Post expansion, what is the expected turnover in the first full year. What will be the capacity of each division and division-wise contribution to sales?

Turnover is expected to be Rs 400 crore in the first full year of operation — in the year 2008-09. Of this, Rs 200 crore will be from fabric segment and Rs 160 crore from yarn sales and Rs 40 crore would be from garments.

Will you be using in-house the entire fabric manufactured or are you looking at exports? Out of the fabric manufactured, 50 per cent will be for domestic sales and 40 per cent for export market and 10 per cent will be utilised for Tibre (our garment brand).

Has the textile industry come out of the woods? Textile industry has not come out of the woods fully. Some of the reasons for this are: a) India has just started to integrate itself with global textile markets. The entire structural formation has to be changed to meet global requirement instead of protecting the domestic market. b) Our major competitor China started big investments in textiles 10 years ago. Now, India has a long way to go to match that and have a lion's share of world textile business. c) Other major hindrances are high power cost and inadequate infrastructure.

Is it necessary for a textile company to be present in all segments — yarn, fabric and garment? There are advantages of being so. It enables to keep the cost lower, helps to achieve faster delivery schedule and facilitates having complete control over cost and quality.

Do you think you have reached the optimum level in so far as backward integration is concerned? Is the present capacity enough for you to focus on garment manufacture so as to propel your growth?

Yes. We start from Fibre to Fashion. We have reached the optimum level in backward integration. The present capacity of weaving and processing plant has sufficient room for the growth of garment manufacture in the future.

The Coimbatore-Tirupur-Perunduari belt seems to be growing into an apparel hub. What are the reasons for that?

Tirupur has already developed into a cluster for knitting garments. That has helped to develop other areas such as Nethaji Apparel Park, Kaveri Hi Tech Park and so on. So the entire Coimbatore-Tirupur-Perundurai-Erode-Salem has become a textile belt.

What are the constraints the industry is facing in terms of trained manpower? What do you think the Government should do?

While there is a shortage of skilled manpower, there is unemployment in the rural areas. The Government can start a training school and the placements can be provided in the textile units.

Do you think the Government should develop a textile city where the workers can be provided with all basic infrastructure such as housing, healthcare, education, and so on, and the industry can take care of employment? The Government should help in forming a textile city as in China where a garment city has been developed with good infrastructure. Our Government can form a textile city with schools, hospital facility, entertainment facility and other infrastructure so that the lifestyle of the textile worker can be enhanced. So there will be industrialisation without slums.

This textile city can be developed between Coimbatore and Salem that is considered as a textile belt in Tamil Nadu, which is providing more revenue to the Government by way of domestic and export sales.

What are your suggestions for finding a solution to the pollution problem?

New units are coming up with independent effluent treatment plants with "zero" discharge of water. For the existing units/proposed units, the Government should assist for a marine discharge into the sea. Subsidies can be provided for those who are ready to come up with ETP of their own.