With a production capacity of over 50 million pieces per year, S.P. Apparels Ltd. (SPAL) is a leading manufacturer and exporter of knitted garments for infants and children. With over two decades of experience and an integrated manufacturing set-up, S.P. Apparels has been firmly ingrained into the apparel industry as a reputed, reliable name. Based in Tamil Nadu, the company has 23 manufacturing units in and around Avinashi.
The company has its three business verticals: manufacturing and export of knitted garments for infants and children wear, production and retail of menswear garments under the brand ‘Crocodile’, and exploring business activities with new customers in the US, Ireland and other European countries through its subsidiary, S.P. Apparels (UK) (P) Ltd. (SPUK).
Incorporated in 2014, SPUK has a design studio with experienced consultants that provides design support to customers. It also provides after-sales service to SPAL’s customers for any technical needs. It operates integrated manufacturing facilities for embellishments such as designing, embroidery, printing, sewing and cutting of garments.
S.P. Apparels is equipped with a wide range of infrastructure and machinery at its facilities for production of yarn, knitting, dyeing of fabric, sewing, cutting, printing, embroidery and finishing of garments. This enables the company to extend timely service to customers with multiple bulk orders. The company also meets the growing requirements of leading global childrenwear retailers like Tesco, ASDA, Primark, Mother Care and Dunnes Stores.
Financial performance
For the financial year 2016-17, SPAL reported overall revenue of Rs. 6,436.10 million as against Rs. 5,417.43 million in FY 2015-16, a growth of 18.80%. PAT at Rs. 565.10 million (Rs. 204.88 million) is up by 175.82%.
“We are expanding our yarn capacity to source all yarn requirements internally and have established a knitting facility to reduce third-party dependence for manufacturing. During the year, we installed 19 knitting machines and 300 sewing machines, which are up and running. We are continuing to invest towards vertical manufacturing capacity expansion and cost reduction projects to support growth and enhance our competitive positioning”, said Mr. P. Sundararajan, Chairman and Managing Director.
In the retail business, the company added nine new stores. As of March 31, 2017, there are 38 company-owned company-operated (COCO) stores, and seven franchise-operated franchise-owned (FOFO) stores. SPAL has also increased its presence across 145 large format stores. It enhanced its focus away from the UK and added three major customers based out of the US and France. With this increased capacity and better integrated operations, SPAL will have the operating leverage to deal with a larger number of customers.
Future outlook
SPAL is in the process of integrating its overall backward manufacturing capacity by incurring capital expenditure. This will include expansion of the spinning facility from 16,896 spindles to 22,272 spindles, reducing dependency on yarn requirements from third party suppliers and increasing the blowroom capacity from the current 3,200 kg per day of cotton to 15,015 kg.
As part of backward integration, the company plans to set up its own knitting facility to minimise its dependence on third party vendors, reduce the cost of transportation, lead time and minimal waste. This will also integrate the entire manufacturing process of SPAL.
SPAL has invested heavily in equipping facilities with the latest, specialised infrastructure and technology and in modern manufacturing facilities. It has implemented and installed the Eton conveyor production system for automating the sewing assembly line, automatic assembly line, advanced semi-automated storage and retrieval system (ASRS) for efficient warehouse / inventory management and the Orgatex software system for automation of the processes related to dyeing.