TT Ltd. has chalked out a Rs. 150-crore expansion plan to take advantage of the future market potential in the Indian textile industry. It is investing Rs. 25 crores on a garment manufacture unit in Tirupur, Rs. 100 crores on a spinning facility at Rajula, Gujarat, Rs. 15 crores on a PP yarn facility at Gajroula in UP and the balance Rs. 10 crores for modernisation of the existing facilities.
The year 2010-11 was the best ever for the company. Its turnover grew from Rs. 354 crores to Rs. 487 crores, a 38 per cent increase. The company was able to use its resources to take advantage of the turnaround achieved in the global economy.
TT Ltd. has shifted its emphasis from commodity-based fibre to more value-added segments of the textile chain. In line with having a more balanced and stable product portfolio and a balanced market between domestic and exports, the company has entered into an agreement to sell its ginning/oil undertaking at Gondal, Gujarat, for Rs. 18.75 crores and invest Rs. 150 crores into yarn, fabric and garments production. It also plans to sell its other ginning factory based at Rajula to exit the volatile commodity type cotton fibre business in total and focus on more stable value-added business.
The company has reportedly increased turnover of its knitwear segment by 50 per cent this year despite the very difficult situation in the market due to an all-time high rise in yarn prices resulting in lower to flat growth rates in consumption.
The fast rate of growth in GDP, and in specific in Tier 2/3 towns disposable income is going to see a mass increase in per capita consumption of fibre plus more value added quality products will be in demand. In India still more than 50 per cent of the garments comes from the unorganised sector. However this share is shrinking over the years as brand preference is growing. This, coupled with actual growth of 10-15 per cent in market, will provide branded organised players a big growth opportunity. As per Technopak, the domestic industry is expected to grow from Rs. 2.18 lakh crores to Rs. 6.56 lakh crores in 2020.
In view of the above projection, the medium to long-term potential seems very good. Based on this, TT Ltd. is planning to focus on domestic sales of knitwear under its brand TT and strengthen its base in cotton yarn where India is a leader in the global market.