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Welspun enters health and hygiene segment with face masks, wipes, disposable linens

Abhishek Law Kolkata | Updated on June 10, 2020 Published on June 10, 2020

Altaf Jiwani, Director and CFO, Welspun India

Welspun India, one of the largest suppliers of home textiles globally to retailers like Walmart and others, has entered the health and hygiene segment with production of face masks, wipes, disposable linen and other PPEs.

The company recently re-purposed its Vapi and Anjar units (in Gujarat) over a “4-6 week period”. While surgical masks (both disposable and washable ones) have hit markets, N95 masks and coveralls (PPEs) will be available from June and July, respectively. All offerings will be branded under Welspun.

Altaf Jiwani, Director and CFO, Welspun India, said that the health and hygiene vertical (Welspun Health) has the potential to be the fastest growing business.

“Today, our domestic business (retail), I would say, is roughly around Rs 250 crore. Now this Welspun Health vertical has a potential to be at that,” Jiwani told BusinessLine adding that: “I am not saying we will be at that level. But I am saying the kind of Welspun Health vertical business, and if I put all together, and the current situation continues, you know, it will be reaching almost that level.”

At present, masks and coveralls will be available for the domestic market only targeting both institutional and retail sales (online and offline ones). As exports open up, the company will look to tap overseas markets using its present distribution network with large retailers.

Mumbai-based (BSE and NSE listed) Welspun India is already one the largest patent holders globally with about 30 ones. It reported net sales of about Rs 6,608 crore with a profit before tax and exceptional item of Rs 552 crore in FY-19 (the last available annual report). Exports to markets like the US, Europe and the Middle East account for over 90 per cent of its turnover. (Sales to the US account for 70 per cent of turnover.)

Business outlook

“And as far as our core business (home textiles and exports) is concerned, the levels – right now we are operating almost full throttle at both the plants,” he pointed out.

Jiwani said the year (FY-21) still remains volatile in terms of providing guidance. Some stability is required to come up with a proper business outlook. But, he expects, “substantial pull coming from the US market” with the towel having “become like a hygiene product”.

“Because as the US is opening up, suddenly there is a lot of pent up demand which is coming. So our both the plants actually are running almost full throttle applying our core products as well,” he said.

According to him, for the health vertical, “it was difficult to put a number right now” as there is no base as such. Welspun was ready to pump in “more investments if required”.

“We want the market to settle down because initially there is a lot of demand which comes up. And then whether it is sustainable or not. Therefore for us, we are looking at a lot of export potential for these products,” the CFO said.

Repurposing

Repurposing of existing facilities to enter into the new vertical (of protective gears) was aided as the backend was ready.

The advanced textile business was there and spun-lace light units were being used for making wet wipes. Subsequently the knowledge base on hygiene and filtration side was leveraged. Filters were already being made for specific applications. For the home textiles, it had the cut and sew teams. So the combination of these three teams helped get the product portfolio ready.

“Heavy investments” on projects like having workers’ colony close to manufacturing facilities; plants located in the vicinity of ports; investing in ancillary units and so on are now paying-off with disruptions being relatively lesser.

“Plants are vertically integrated and we have acquired raw material that include cotton for the next six months. Our supply chain management is robust and investments have been made into ancillary plants. So, even the packaging material is there,” he added.

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Published on June 10, 2020
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