Transcript No Slide Title

Presentation on
Welspun India Limited
Seizing The Emerging Global Textiles Opportunity
Welspun Group Profile
US$ 400 million, engaged in
Terry Towels
 Largest Terry Towel producer in Asia
Polyester Filament Yarn

One of the largest Specialty Polyester Filament Yarn
producer In India
Polyester Buttons and Resins
 Largest producer of Polyester Buttons in Asia
Cotton Yarn
 One of the prominent players in India
Saw Pipes
 One of the largest capacities of Saw Pipes in Asia,
outside Japan.
Strictly Private & Confidential
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WELSPUN INDIA LTD- Overview

Asia’s largest and world’s 4th largest Terry towel producer

Current Terry towel capacity :10,800 Tons being expanded to 23000 tons

Becoming a complete home textile player by addition of bed linen

Plant at Vapi Gujarat and Anjar, coastal Gujarat, India

Distribution network in 32 countries

Exports revenue- 94% of total revenue ( 68% to the US market)

Certification:
 ISO

9002/14001 and SA 8000:2001 by M/S BVQI
Only Indian company to license life-style brand in Home Textiles
 Nautica
for towels in US and Canada
 Tommy
Hilfiger for Home Textiles in India
Strictly Private & Confidential
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Welspun – Journey
to become a Global
Home textile Player
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CIRCA 1994
 Polyester
yarn manufacturer
 Turnover
was Rs 90 Crs, Net Profit of Rs 4 Crs
 Started
Towel Business
 Challenges:
To
produce Towel – New Business Line
To
produce Quality Towel
To
Export Quality Towel – EOU status
To
Export Quality Towel to Knowledgeable Matured Market
Strictly Private & Confidential
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CIRCA 1994 – Cont…..
Emphasis
on Maximum Production
Quality
improvement at each stage of production
Product
Analysis based on Customer feed-back
Emphasis
Focus
on Volume Growth
on Sales from the maximum Outlets
Started
Business through Intermediaries – Exporters, Buying
Houses.
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CIRCA 1999
Produced
Exported
Quality Towels
Quality Towels
Expanded
Grew
Capacities from 2500 Tons to 7800 Tons
in Volume and Value Terms
Emerged
as largest Exporter of Towels from India
Turnover
– Rs 325 Crs – significant for Towel Co
Profit
after Tax of Rs (31.5 Crs)
Strictly Private & Confidential
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CIRCA 1999 - Cont…..
External
Dependence- All Business through Intermediaries
Presence
Focus
in Generic Products – Yarn and Plain Dyed Towels
on Sales rather than Marketing
Limited
Designing Efforts
Limited
Processing capabilities – right color/right shade/right
mix was a challenge
Financial
In
Crunch
nut shell Innovation was a missing Link
Strictly Private & Confidential
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CIRCA 2000 - Putting
heads together for a
New Beginning
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Strategy
Adopted
Vision to become a Truly Global Player and
communicate to all our employees
Breaking
the midriff - middle-men/agents from the business
cycle – Jettisoning Extra Baggage
Direct Relationships even at the cost of dip in sales
Decided
to invest in Product Developments and Design
Capabilities
In
Essence Adopted Innovation in entire Business Operation Product, Processes, Practices and People
Strictly Private & Confidential
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Innovation In Products
Paradigm
shift from USE to COLLECTION range of products
New
Value added product lines – Egyptian Cotton, Embroidery,
Supima (American Cotton), Kid Centric Towels.
Experimented
New
with different inputs like PVA fibers
Product development
–Hygro Cotton
–Zero-twist
–Subslistatic Printed
–Blister Pile Towels
 Developed
new shades and floral prints that are trendy and inline
with the Fashion Industry
Strictly Private & Confidential
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Innovation In Processes
Process
House: Fully Atomized color mixing
Design
Innovation
Developed
new Designs by creating one of the best Home
textile designing team
Design
Studios

Design house in India - 5 people

2 designers each in US and UK

Appointed World class Designer from the Industry
Strictly Private & Confidential
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Innovation In Processes
Innovation in Sales and Marketing Processes
Selection
of Right Business Partners
Created
Marketing Infrastructure
 Sales team in US
 6000 sq. ft. exclusive showroom in New York
Distribution alliance in the US for distribution and
warehousing
 Created Welspun USA - 100% subsidiary to handle
customers directly
Product Development skills complimented by Global Sales Network
Strictly Private & Confidential
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Innovation In Practices
Utilizing
–EDI
IT as Integrator
& RFID in Welspun USA
–Integration
with Customers
–Electronic
Coloring and Design Matching which integrates
Product Design & Development
–SAP
R/3 - Integrates Operations, Marketing and Supply
Chain
–Reverse
Auction
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Innovation In Practices
Market
Intelligence : Conducted Grid analysis of top
retailers with respect to:
•
•
•
•
Product range,
Fast Moving Items best selling SKUs
Profit margin expectation
Collection of Samples to understand
global developments
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People
 Paradigm shift in Mindset from Manufacturer to Marketer.
Adequate Training in SAP enabled Production and
Operations
Appointed International Textile consultant to improve skill
sets of employees
Appointed Experienced and result oriented people from the
Industry .
Performance based Reward system
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YEAR 2004 - Revisited
Strictly Private & Confidential
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Product wise sales – in terms of % (based on ex-mill values)
60%
50%
40%
30%
20%
10%
0%
P lain Dyed
Egyptian
Co mbed
Lo o m State
P D With
YD Washed
Sheared
Embro idery
Sublistatic
To wel
ZERO
TWIST
YD with
Embro idery
Others
2001-02
49%
6%
16%
0%
12%
0%
0%
2%
14%
2002-03
42%
13%
12%
0%
14%
0%
0%
4%
14%
2003-04
34%
19%
11%
7%
5%
5%
4%
4%
11%
2001-02
2002-03
2003-04
The proportion of the value added products has increased
Strictly Private & Confidential
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Progress in Value Chain
Value Creation
Choose & Pick
amongst
Retailers
Direct
Export
Marketing &
Outsourcing
High end
products
Branding
Indirect
Export
‘95
2000
Strictly Private & Confidential
2003 2004 2005
Time
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Customer Relationship
Long standing relationship
with 12 out of 20 top
retailers in the world
Customer centric Planning
and Production mechanism
BETTERNWELT
MITSUKOSH
Strictly Private & Confidential
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Value Chain contribution
Retail Price
Expansion
2x
+ 13-15%
Tommy Hilfiger,
Nautica, Polo Ralph
Lauren, DKNY,
Designer Brands
Calvin Klein
Department
Stores
Specialty Stores
May&Co,
Federated,
Dillard’s
BB&B, LNT,
Kohl’s
+ 5-7%
Fashion Stores
J C Penny, Target,
Shopko
x
Mass Merchants
Wal-Mart, K Mart,
Costco
Indirect Business
Strictly Private & Confidential
2005
2004
2003
15%
12%
8%
10%
4%
3%
10%
5%
1%
15%
12%
22%
15%
33%
32%
0%
2%
8%
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Comparison
FY 1999 (Rs. Crs)
Particulars
FY 2005 (Rs. Crs)
325
Turnover
374
(35)
Net Profit
295
41
Market Cap.
800
-
FII Holdings
24%
2.66%
Venture Capital &
Mutual Funds
32.19%
Strictly Private & Confidential
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Global Opportunities
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Today’s Global market place
 Quota phase out – An additional market of $ 1.25 bn in Towel and $ 1.75
bn in bed linen Segment alone
 Shrinking supplier base released
Pillowtex - bankruptcy - $ 450 mn of towel and $ 220mn of bed linen
supply.
WPS - Chapter 11 – $ 455 mn of towels and $ 580 mn of bed linen supply.
 Lucrative European market of $ 600 mn with shrinkage of supplier base.
 Australian and New Zealand market of $ 50 mn –
Dropping duties – 25 to 17.5%, rendering there capacities idle
 Increased domestic demand –
Few organized player in the home arena to cater to the market
Low interest rates and higher disposable income
Strictly Private & Confidential
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Key Differentiators
Strictly Private & Confidential
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Success Algorithm
 Textiles has been forecasted as another BPO success story,
what Y2K did for IT , Y2K5 could do for Textile Industry
Mantra For Success as followed by Infoys P: Profitability
S: Scalability
P: Predictability
D: Dependability
Strictly Private & Confidential
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Vision 2005 and Beyond
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Innovation in 2005 and beyond
 Products: Continuous Innovations in Products- Bamboo
Filaments, Hollow Yarn, Natural Towels
New Business Lines like Bed Linen
Processes: Automatic Recipe matching – Orgatex,
Automated Operations like Cut and Sew.
Practices: Patenting of New products to Create
differentiators.
People: Knowledge Management, Six Sigma and ESOPs
Strictly Private & Confidential
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Vision – This is what we are aiming at…………….
• Fully integrated textile company 4 Fs - from farming to
factory to fashion to foreign retailing
• Organic and inorganic initiatives to target Growth
• Preferred partner in Home Textiles for any global
initiative.
• Leader in embracing new technologies, product
innovation, market intelligence - to offer competitive endto-end solutions to our customers.
• Among top three home textile companies in the world.
• Market leader in Indian home textile market.
Strictly Private & Confidential
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RECOGNITIONS
National Export Award for outstanding performance from
Government of India, for the year 1996-97
Texprocil* gold trophy for outstanding export performance for
successive three years (1999-00, 2000-01 & 2001-02)
Best Global Vendor by Wal-Mart in 2002 for Terry towel
Vendor of the year , FY 2002 by Shopko Stores Inc., USA for all
its product categories
Operational Excellence Award by JC Penney Stores, USA for
Year 2003
Strictly Private & Confidential
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WE APPRECIATE YOUR VALUABLE TIME
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