RSWM Ltd. of the $1 billion LNJ Bhilwara Group has its operations spread across eight state-of-the-art manufacturing facilities in Rajasthan. It offers one of the widest product ranges across fibre blends, counts and shades. Periodic investments in cutting-edge technology and skills enabled the company to manufacture quality products of international standard. Almost 32 per cent of the company’s products are exported to over 70 countries across Europe, the Middle East, South Africa, Australia, Korea, Belgium, Singapore, Italy and Egypt.
RSWM reported a superior performance for the second successive year, which combined business growth, increased profitability and a stronger balance sheet despite a subdued business environment. Its net sales grew by 16.99 per cent from Rs. 2453.29 crores in 2012-13 to Rs. 2870.05 crores in 2013-14. This growth was due to a superior performance across all business divisions. Most of the growth was value-led, which also enhanced business profitability. A depreciated rupee made an important contribution to revenues.
Says Mr. Ravi Jhunjhunwala, Chairman, RSWM Ltd.: “We are investing Rs. 40 crores in 50 looms to increase fabric production from 9 lakh metres per month to 16 lakh metres per month. This initiative will not just expand capacity but widen capability, making it possible for the company to enter the 100 per cent cotton and polyester-cotton fabric ranges starting 2014-15. The company is investing Rs. 184 crores in expanding its mélange yarn capacity to enhance value-addition. We are also investing Rs. 75 crores in a green fibre facility, which will replace about 25 per cent of the polyester fibre being procured, reducing costs. I am optimistic that these initiatives will graduate our company towards Lakshya 2016, manifested in a topline of Rs. 4,500 crores”.
Capacity expansion
In the company’s yarn division, its capacity of spindles was increased from 1,50,428 spindles in 2003-04 to 3,43,856 spindles and 3,120 rotors in 2013-14. As for its fabric business, the weaving capacity was increased from 69 looms to 104 looms. All looms were fully automated, and 34 per cent of the looms were less than 10 years old.
The company is presently engaged in adding 50 best-in-class looms to enhance capacity by 48 per cent during 2014-15. In the denim division, 14,232 spindles and 960 rotors were added in the past five years resulting in enhanced output and efficiency.
As a result of the above initiatives, the company was able to emerge as one of the largest producers of synthetic yarn in India with an estimated market share of 7.5 per cent and reinforced its position as India’s leading producer of value-added melange yarn. The company also invested Rs. 81 crores in automation solutions in the last five years with the objective to enhance people productivity. It invested in environment management solutions which moderated the use of consumables (dyes and colours) and enhanced recycling. The company also invested in a green-fibre plant to generate recycled polyester and optimise costs.
Product range
RSWM offers the widest range of synthetic yarn in terms of fibres, blends, counts and colours, besides, tencel yarns in India. It created the Ultima brand (yarns from SJ-11), which has a five to seven percent premium quality over its competing brands, to address the commodity needs. Its sales doubled within a year of its launch. RSWM created yarns customised around specific applications in the furnishings and home décor segments for leading Indian textile brands.
The company was the first in India to launch fiuorescent denim shades and among the few to offer jacquard fabrics, over-dyed fabrics and coated denim fabric. The company also introduced denim shirting with ethnic prints, rotary prints, laser prints and finishes. As a result the revenues derived from value-added products increased considerably over the years.
Marketing highlights
The textile manufacturer launched four fabric ranges with a soft touch finish. Launched jacquard, over-dyed and coated denim fabric ranges and launched denim-based nappy fabrics for the first time. Its operational dependability translated into enduring relationships as a yarn supplier for IKEA’s global operations, for Decathlon, a respected European brand, as its exclusive melange yarn supplier and its denim division’s quality assurance cell was accredited by Levi’s, among the few units in India. It established a presence in the furnishing space, marketed yarn to marquee brands and increased its focus in technical textiles. RSWM features among the top five manufacturers of polyester viscose-blended yarn with a pan-India presence managed by its 10 regional marketing offices. Over 25 per cent of the yarn output is marketed to brand-enhancing Indian textile players namely Raymond Group, Siyaram Silk Mills Ltd., Welspun Group, Alok Industries and Arvind among others.
RSWMs yarn division productivity increased from 10.5 tonnes per person in 2009-10 to 11.5 tonnes in 2013-14. Yarn production grew by 7.53 per cent to 1,24,428 tonnes in 2013-14 against 1,15,720 tonnes in 2012-13. Its net profit grew from Rs. 36.03 crores in 2009-10 to Rs. 98.80 crores in 2013-14. The yarn divisions operate at a 98 per cent capacity utilisation, higher than the industry average. The company’s fabric production grew by 21.06 per cent to 33,702 metres in 2013-14 against 27,838 metres in 2012-13.
Infrastructure
RSWM operates almost 4.35 lakh spindles and produces 1,25,000 MT of yarn annually from its five locations in Rajasthan. Its Kharigram unit houses the most sophisticated spinning equipment and automation solutions. More than 15 per cent of the company’s product line is environment-friendly, which attracts global brands from the US, the EU and Latin America as regular customers.
RSWM possesses one of the widest yarn ranges of fibre blends, counts and shades which are classified into grey, dyed and mélange yarn. It is among India’s largest manufacturers of mélange yarn with 44,016 spindles. Its Ultima brand sales volumes scaled from about 5,000 tonnes in 2012-13 to about 12,000 tonnes in 2013-14. Production and sales volumes of melange yarn scaled 9.3 per cent and 10.23 per cent respectively. Its revenues increased by 32.45 per cent from Rs. 268 crores in 2012-13 to Rs. 355 crores in 2013-14. Produced at the company’s Mandpam plant, these yarns are made from cotton and blends used in the manufacture of knitwear and hosiery. New products such as nappy yarn, multi-slub and special blends were also developed by the company’s R&D. It is also working towards establishing its presence in weaving and sweater business segments.
RSWM is adding 25,920 spindles at an investment of Rs. 184 crores, which will increase the production of value-added products to the level of 50 MT per day. The additional capacity is expected to be commissioned by March, 2015. In the fabric segment, revenue increased by 11 per cent from Rs. 178 crores in 2012-13 to Rs. 196 crores. The segment received strong institutional business for uniforms from various States.
Mayur brand
RSWM manufactures a range of blended suiting fabrics marketed under ‘Mayur’ brand through its robust network comprising more than 2,000 retailers pan-India. About 30 per cent of its production is exported to quality-conscious customers across 26 nations. The company has a vertically-integrated state-of-the-art plant at Mordi (Rajasthan) housing sophisticated equipment sourced from the best equipment suppliers. It added customers in Cambodia, Vietnam, Indonesia, Thailand and Latin American nations, strengthening its export volumes. With increased capacities, revenue increased by 13.20 per cent from Rs. 310.69 crores in 2012-13 to Rs. 351.70 crores in 2013-14.
Denim business
Although a relatively small segment, RSWM’s denim business enjoys rich credentials in terms of value-addition and customising fabrics around diverse applications. The state-of-the-art manufacturing facilities house sophisticated equipment sourced from leading global brands and enjoys global certifications. Its denim manufacturing plant at Mordi comprises a yarn spinning facility and an in-house garmenting department for developing denim apparel samples for the benefit of customers.
Over the years, the company has created a massive product basket of over 3,000 denim variants. The product range comprises denim out of denim (recycled denim), work wear like anti-bacterial hydrophobic, hydrophilic, anti-odour and fire-retardant, poly spectrum in 65 shades, organic cotton fabric, power stretch, plasma denim, rich blended denims of cotton with linen, cotton with Kashmir wool, cotton with hemp, cotton with viscose, 100 per cent tencel, among others. It also created new fabric variants though novel yarn blends using bamboo fibre, indigo-dyed yarn, mélange and peach, among others.
RSWM lines up Rs. 300-cr investment on capacity expansionQuestion: How was the overall performance of the company in 2013-14? Answer: The year under review was favourable as RSWM reported healthy growth. Topline grew by 16.72 per cent over the previous year while EBIDTA and net profit soared by 17.40 per cent and by 45.57 per cent respectively. Q: What mainly contributed for the excellent performance? A: We created a prudent volume-value play, which enabled us to outperform the sectoral growth. The three elements that helped sustain our growth were the volume, value and continuous improvement.  Although no fresh capacity was added, volumes increased across both the business segments – yarn and fabric. In our yarn business, dealership expansion during 2012-13 yielded rich dividends in 2013-14, the new dealers providing an approximate sales addition of 500 tonnes per month. In the fabrics segment, sizeable volumes from the institutional segment were generated. Q. Where did the value come from? A: RSWM is a major player in the textile sector, as well reflected in our product basket comprising the largest variety of specialised products. SJ-11, our most sophisticated yarn manufacturing facility, was operational for only a part of 2012-13. Still, volumes of the Ultima brand yarn more than doubled in 2013-14. Production of melange yarn increased by 10 per cent. The proportion of value-added yarns increased to 30 per cent of the total output against 20 per cent in 2012-13. Q. What were the key cost reduction initiatives that were implemented? A: I would refer to the initiatives as part of a continuous improvement strategy. This round-the-clock agenda was spearheaded by our spirited and energetic team. The highlight was the successful ISO 50001 (energy management) audit of our melange unit, graduating us into a list of select Indian units with this prized certification. Q. What other key 2013-14 initiatives are expected to have a lasting impact? A: Our focus on value-addition facilitated introduction of specialised products across every business segment sustaining growth and profitability. We introduced niche products in 2013-14 which opened up new opportunities. For instance, we created specialised yarns for the furnishing and home décor segments that were well-received by the prominent brands. Our specialised yarn was approved by IKEA which should generate healthy volumes. Our fabric business entered the cotton segment comprising pure and blended product ranges expected to generate sizeable volumes. Our denim segment covered the jacquard, coated fabric and over-dyed fabric ranges, creating niche first-time products. Q. What is your take on the textile sector? A: The textile market will continue to grow. India’s population is expected to further multiply by 2020. Besides, as the per capita income of the average Indian increases, textile demand will increase proportionately. With the installation of a dynamic government agenda, the policy logjam is expected to clear, leading to robust industrial and services growth. International demand is expected to remain robust. Europe is expected to report positive GDP growth in 2014. Latin America is now an important consumer, Africa has emerged as a sunrise market and the Far East has re-emerged as an important consumer. Q. What about the company’s further capital investment? A: We are already implementing a capital investment of about Rs. 300 crores across the various areas: a 50 TPD green fibre project to create a sustained polyester fibre supply line; 50 sophisticated looms to enhance production from 7.5 lakh metres to 14 lakh metres per month starting in the second half of 2014-15; and an addition of 25,920 spindles to double our melange yarn production. Going ahead, the commissioning of these capacities will enhance revenues, margins and profits.
|