Corporate File

From Jhalawar to Oman, SVP group travels far

Subramani Ra Mancombu | Updated on July 05, 2021

How a century old trading company is evolving into a fibre firm

Chirag Pittie, the 38-year-old Managing Director of the Mumbai-based SVP Global Ventures Ltd, is gung-ho about the sustained growth in the last two quarters that the company has shown, rebounding from the low due to the Covid-19 lockdown. “Our product mix of high margin compact cotton yarn, upswing in yarn prices and strategic location of our Sohar plant (in Oman) has provided us tremendous operational efficiencies,” he says.

The Oman plant, set up in 2018 to spin yarn, has performed outstandingly, he says, and the second phase expansion is on track. The plant was set up to achieve Pittie’s vision of making the company a fully integrated “fibre to fashion” company and meeting global customers’ demands. “We are also planning forward integration into garments at Oman,” says Pittie.

Weaving big expansions

Oman is a long way away from arid Jhalawar in Rajasthan where the group has its roots. Way back in 1898, Shri Vallabh Pittie, Chirag’s great grandfather, set up SVP Group as a trader. A century and more later, it has travelled a long distance to become a leading manufacturer of cotton yarn. The moment of reckoning for SVP came in 2016 when it decided to transform its manufacturing by adopting AI-based technology and setting up a new spinning plant in Jhalawar, Rajasthan. Until then, the SVP ground had three old traditional spinning mills in Coimbatore, Palani and Ramnad — all in Tamil Nadu.

“Over the last five years, our group has expanded using the latest technology and modern machines that gives us an advantage over our peers. We are convinced that we need to upgrade our quality and capacity once every 2-3 years to stay ahead,” says Major General OP Gulia, CEO, SVP Group, an Army veteran of 36 years.

Gulia explains that AI has reduced error in predicting yarn grading by as much as 60 per cent, resulting in better fabric grading. It has made it easier to measure a textile’s physical properties and objectively classify fabric comfort. In quality control, AI can ensure uniformity and quality. Human error is mitigated, he says.

SVP also decided to specialise in producing compact cotton yarn at the Jhalawar plant. Today, the spinning mill boasts of 1.5 lakh spindles and 2,040 rotors that help it produce 45,000 tonnes of yarn annually. These tech inputs have helped SVP to run its plants at 95 per cent capacity during the pandemic. “We need less manpower since our machinery is all automated,” says Gulia.

“We will add another 1.5 lakh spindles at the Jhalawar plant before the end of the current fiscal and about 3,500 rotors,” says Gulia, adding that SVP exports the compact cotton yarn that fetches a premium for its finer quality to Vietnam, Bangladesh, China, Pakistan, Turkey and Portugal.

A captive market

After consolidating at Jhalawar, SVP began its expansion. It selected the Gulf Cooperation Council (GCC) region as it saw plenty of opportunities there. This led to the setting up of a plant in Oman at an investment of $300 million.

The tipping point was the establishment of the Sohar Free Zone by Oman that offered a strategic location with enormous operational and logistics advantages. “There were two major reasons for us to set up the plant in Oman. One, it is on a traditional textile trade route between Asia and Europe. About 30 per cent of the global container trade passes through the Gulf of Aden where Oman is situated,” explains the Maj General.

With no textile mills in the entire GCC region, the SVP Group saw for itself a local market that was open to be fully captured. And it had the support of the Oman government. Some of the benefits that SVP got were port facilities with priority for the movement of raw material containers as well as finished goods.

Compared to India, power costs in Oman are 40 per cent lower, while borrowing costs are also low. “We get exemption from income tax in the Sohar Free Zone for up to 25 years,” he adds. With its high operational and logistics efficiency, it contributes 40 per cent to revenues, boosting the company’s financial performance.

More importantly, the plant in Oman offers SVP access to markets that are “not otherwise accessible from India due to political and diplomatic reasons”. “Oman has a free trade agreement with the US, one of the largest markets for textile products. That way, this plant is beneficial besides the fact that Muscat maintains stable and friendly diplomatic ties with many countries such as the US, Europe, UAE, Iran, India, and China,” says Gulia.

SVP plans to expand the Oman plant further by doubling the spindle capacity to three lakh and adding another 3,500 rotors. Notably, the plant provides employment to 1,000 local women.

The company is looking to enter garment manufacturing to become a fully-integrated textile firm. “We are venturing into knitted hosiery garments and we will set up a unit in Oman. Initially, we are looking at approximately ₹200 crore in investment funded by equity. The production is planned to start within two months,” says Gulia.

Oman is a long way from Jhalawar, but SVP is banking on its Oman experience to make itself a global player.

Published on July 04, 2021

Follow us on Telegram, Facebook, Twitter, Instagram, YouTube and Linkedin. You can also download our Android App or IOS App.

This article is closed for comments.
Please Email the Editor

You May Also Like