Being India’s largest cotton spinning company with 1.1 million spindles, producing 570 tonnes per day, Ludhiana based Vardhman Textiles Ltd. has earned a reputation of quality and reliability. The turnover of the yarn division alone accounts for around 50% of the total turnover at close to Rs. 3,400 crore per annum. Today, the company is gradually moving from fundamental yarns to value added yarns as a strategic move to get better margins on bulk business. In an exclusive interaction with Team Apparel Online, Vijay Puniyani, Sr. Vice President (Marketing) shares about the tactic growth strategy of the yarn division for both fundamental and value added category. Following are the excerpts from the interview:
AO: What is Vardhman Textiles’ strategy to make the yarn division a more profitable business besides banking on economies of scale?
At 1.1 million spindles, we are conservative to increase our capacities for the time being, at the same time going in for consolidation. Our strategy would be to keep adding value to our offerings for both the national and international market by creating niche engineered products and add value to the textile chain.
Currently the yarn business allocates equal capacity for captive consumption, export market and domestic market. Over the last couple of years we are diversifying to manufacture more of value added yarns than fundamental yarns. Today our domestic sales of value added yarns accounts for close to 50% of total sales, while earlier it was ranging between 25-30%. Greige yarn is the major share in export segment with gradual increase in value added products.
We are pioneers in cotton and cotton blended yarns and today have the largest capacity in 100% cotton melange yarns, core spun and slub yarns. Our strategy is to strengthen our offerings in value added yarns through innovative use of fibre, blends and technology. Continuous R&D has always kept us ahead, giving us good market shares as well as profitability.
AO: Is your in-house team responsible for R&D or do you partner with your customers for the same?
Our R&D is based on the buyer’s feedback as well as our own. Generally the customers ask us to develop different kinds of yarns which they have spotted somewhere and we then work on developing similar yarns. Side by side, our own R&D is in progress where our technical team develops new blends. Once we have a clear picture of the USPs of the newly developed yarn and its commercial viability, we present it to our regular clients for their feedback.
Technology plays a major role in supporting R&D, like slubs are created through technological advancement in conventional spinning. Another set of development comes at the fibre stage, when new fibres are used like bamboo, seacell fibres, banana fibres, etc. The third part of development is blending the different fibres, changing the ratios, changing the substrates in terms of cottons, e.g. micro modal blended with some Pima cotton for new combinations, etc.
AO: Where is the major use of value added yarns, in knitting or weaving?
For weaving segment, we generally manufacture and supply greige yarns. When we talk about value added yarns in weaving, it is mostly core spun lycra yarn and compact yarns. However all the value added yarns like melange, slubs, dyed yarns, cellulosic, etc. are used in knitting segment.
AO: Globally the demand for synthetic is increasing; do you see a threat for cotton based producers in the future?
If we look at cotton globally, its production is consistent at around 25 million tonnes for the past couple of years. Even if we look at projections for 2020, we are not foreseeing cotton production going up beyond 27-28 million tonnes. However in India, we do hope that the production will increase not just in terms of area cultivated but also with increase in the productivity which is below the world’s average.
We are a cotton consuming country and around 65% of consumption in yarn is of cotton while the balance is synthetics. However, the situation is reverse globally and approximately 25-30% consumption worldwide is in cotton and the balance is of synthetics. If we look at projections for 2020, we estimate that about 110 million tonnes would be the consumption of fibre and filament worldwide and out of this 28 million tonnes would be cotton. Interestingly, while consumption of synthetic fibres is expected to grow, experts believe that the consumption of cotton will not grow much. Yet, even as the ratio of synthetic worldwide is going up, Indian consumption is balanced at 60% cotton and 40% other fibres. We have best technology and expertise right from fibre stage to feed varied demand in cotton, which will certainly not diminish in India, both for local consumption and for products exported from the country, as the world perceives the country as a cotton producer and looks for such products when sourcing.
AO: Any direction towards sustainability products like recycled yarns?
We are geared up to make yarns from recycled fibres, but the industry is demanding other sustainable cotton yarns, i.e organic, fair-trade, BCI, etc. and we are already offering the same. Production of such yarns does not require any modification of the spinning system and it can be done with our existing infrastructure this is just a conversion of sustainable cotton, it is more to do with the raw material.
AO: What kind of yarns you are supplying to Bangladesh?
Bangladesh has evolved substantially and now a lot of value added yarns are being exported including BCI and organic cotton yarns, earlier it was just the fundamental yarns which they were importing. Their own spinning industry is also growing but mainly into fundamental yarns.
