Welspun India Ltd. (WIL)’s total revenue on standalone basis increased to Rs.53,953 million, a growth of 7.99%, and on consolidated basis it increased to Rs.65,266 million, a growth of 7.87% over the previous year.
Innovations and patents
As a thought leader in the Home Textiles market, Welspun remains focussed on innovating products and trends aligned to the continuously evolving aspirations of an ever-widening consumer and customer base, worldwide. With the research-led approach facilitating its understanding of consumer desires and aspirations, the company continues to strengthen its innovative product portfolio which currently contributes a significant 38% of its total revenue.
Welspun’s growing expanse of patented products (at last count, the company had 31 unique innovations) endorses its edge in innovation, which remains committed to augmenting further in the coming quarters. The remarkable growth witnessed by its unique ingredient brands, namely, HygroCotton® and Wel-Trak™, was another highlight of FY 2019. The overwhelming response to Wel-Trak™ products, which contributed 3% to the company’s overall revenues, encouraged the company to make the brand available on shelves across multiple fibers, products and geographies during the year. HygroCotton® also continues to gain strength, especially in the domestic market and the hospitality segment.
Taking its innovation agenda forward, Welspun has also launched Copper and Charcoal-infused products to further expand its innovation portfolio, which is seen growing stronger as a differentiator for the company in the coming years.
Brands
Welspun’s strong brand portfolio continues to helm its business growth, enabling the manufacturer to deepen its connect with consumers across markets and aspirational categories. Currently, Welspun’s branded products contribute to 17% of its sales, and can see this getting further scaled up with a greater focus on the B2C channel. Branding remains high on the company’s agenda for growth in the domestic market. Its deeper understanding of the market has encouraged the company to launch its new ‘Welspun’ brand for the large affordable segment that is seeking access to value-for-money products to meet their essential needs.
‘Quik Dry Towel’, its first product offering under this brand, has shown good traction since its launch. For the premium brand ‘Spaces’, Welspun has redesigned the brand strategy and used a 360 degree marketing approach by increasing customer touchpoints, including social media, POS, in-store, PR news, TV, outdoor and radio.
Further, as already mentioned, Welspun focuses on expanding its ingredient brands such as HygroCotton® and Wel-Trak™ and will also continue to propel its brand strategy in the coming quarters. On the licenses front, WIL has added licences like Canopy, Goodful and Scott Living to its portfolio. It is also investing in the growth of its ‘Spun’ brand, which aims to promote sustainability and women empowerment.
New markets
Welspun’s major revenue share comes from the US, which constitutes around 2/3rd of its sales. The US has always been Welspun’s major focus area. As a result it has grown its market share in the US towels market from 15% in 2013 to 19% in 2018 and in the US sheets market from 7% to 11%. This implies that every fifth towel and every ninth bedsheet sold in the US is made by Welspun.
The company is expected to continue growing its US business in the medium to long term. After the US, the next big market for the company is Europe from where it gets 17-18% of its revenues. In spite of duty disadvantage in this geography, WIL is able to perform well and gain market share with its innovative products portfolio and its own brand ‘Christy’.
In order to accelerate its growth and achieve geographical diversification, WIL has now its special focus on expanding its international presence in subscale / new markets, which include Japan, the Middle East, Australia, Russia and South Africa. Currently, the Indian domestic market is the biggest focus area for the company. The Indian market is very fragmented and majorly catered to by the unorganized sector. With the implementation of GST, there is a level playing field for the organized and unorganized players. This makes the market attractive to large players like Welspun.
WIL is making inroads into the domestic market through a portfolio of different brands such as ‘Welspun’ and ‘Spaces’. Apart from the existing home textiles portfolio, the company’s foray into the flooring space will have its major focus on the domestic market.
New channels
Over the last few years, the company has focused on creating an omni-channel presence by establishing its presence across alternate channels such as e-commerce, hospitality, etc. WIL has enhanced its offering by providing an omni-channel support to the big-box retailers on Product Development, Warehousing, Pick and Pack, Drop-Ship and Analytics. Its warehouses in the US, the UK, Germany and India help in quickly responding to orders. The financial year saw a major client addition as WIL started supplying to one of the biggest e-commerce players in the world for their private label collection.
Apart from e-commerce, the company is working on its hospitality channel as well. The financial year saw major business expansion in hospitality business in India as well as abroad by way of increased revenues and client additions. In order to tap the global wellness channel, WIL has partnered with Stay Well by being the exclusive supplier of home textiles to it. Stay Well infuses wellness into hotel rooms with features and programs to maximize the guest experience and minimize the impact that travel has on the human body. Apart from this, for its domestic Indian brand ‘Spaces’, WIL entered into a partnership with “Thrive Global India” to integrate its world-class products with a thoughtfully designed experience that empowers consumers to lead a stress-free and healthier lifestyle.
New products
WIL strives to add a new product to its portfolio almost every year. It has forayed into flooring solutions with an aim to become a one-stop provider for domestic and international markets. The residential flooring market is dominated majorly by vitrified tiles, while the commercial & institutional space is dominated by imports of soft carpet flooring. Thus, the existing market provides ample opportunities for innovative flooring solutions and import substitution.
In order to capture this opportunity, the company is investing Rs. 11 billion to manufacture area rugs, carpet tiles and other innovative flooring solutions. The facility will be located in the state of Telangana with a capacity of 27 million sq. meters p.a. and will be operational by Q3FY20. The company has already started building its brand presence in the segment by showcasing its product portfolio in exhibitions like AceTech across India as well as Domotex, Germany.
WIL is also building its technical / advanced textiles offerings. These products are used in specialized applications in healthcare, fire departments, aerospace, defense and other utilities. These products have special features such as fire retardants, stain resistants, anti-bacterials, and soil resistants. The year saw a major client win in this area for industrial filters and approval as a supplier by one of the world’s largest players in wet-wipes.
Welspun Flooring
Welspun Flooring promises to revolutionise the flooring industry. The company has big plans to become a major player in India, while looking at exports too. The overall size of the Indian tiles market is Rs. 35,0000 million per annum, of which 90% is for new construction and 10% renovation. The renovation segment will grow significantly. With an investment of over Rs. 11,000 million, a manufacturing facility is coming up in Hyderabad spread over a massive 600 acres with a capacity of 27 million sq. mtr.
Welspun Flooring aims to manufacture 10 million sq. mt. of flooring in the first phase targeting a turnover of Rs. 10,000 million in the near future, rising to over 20,000 million at full capacity. The company has already built up a significant presence with distributors across India, and is aiming for a total of 500 dealers and distributors by the end of 2019.
The ace up its sleeves is the flagship product – Click N Lock tiles. Welspun’s revolutionary technology, which has individual tiles locking into one another, ensures flooring installation can be done in less than a day, making it easy and chaos free. And that’s not all. Click N Lock tiles can be easily laid over the existing flooring, saving the hassle of dismantling old flooring. Also, to allay any concerns over durability, Welspun Flooring is committing to a 10-year warranty on the product, which will have thickness ranging from 4mm to 6mm.
The other offerings of the company are carpet tiles, broadloom carpets (wall-to-wall), and greens (artificial grass). In addition, Welspun Flooring also has Fusion Flooring (Mix-n-Match), which offers the freedom to experiment and create signature designs, and a combination of hard and soft flooring for commercial purposes.
With competitive pricing, customers can look forward to great value too. This being just the start, Welspun Flooring aims to leave no stone unturned to disrupt the flooring market, and looks all set to usher in a much-needed flooring revolution!
Advanced textiles
Advanced Textiles is the emerging segment of textile products which deals with innovative product applications. Welspun has diversified in this space with the objective of catering to futuristic requirements of consumers. The technologies involve constructing fabric directly from fibers, without going through traditional stages of spinning and weaving/knitting. Welspun presently has three technologies – Spunlace, Needlepunch and Thermobond. Each of these has an in-house downstream conversion unit to make value-added products as per customer requirements.
Spunlace non-wovens cater to medical disposables, hygiene, cosmetics and coating substrate applications. Last year, Welspun’s Spunlace brand called “AeroEaze” qualified for Aerospace Wiping applications, successfully tested for AMS (Aerospace Material Standards) and BMS (Boeing Material Specification) and has generated international interest.
Needle punch non-wovens are used in high performance industrial and automotive filtration. Presently Welspun products are used in reputed automotive brands like Jeep, Nissan and Renault. Welstrat and Welaer are new innovative product brands developed and launched for industrial filtration applications – for cement, mining and power industries.
Wet wipes is private label manufacturing business that caters to the Indian market and works for popular brands like Himalaya and Unilever and also works with retailers like Amazon. During FY18-19, Advanced Textiles has successfully crossed the Rs. 2,000-million mark. Of this, higher value-added products constituted 30% of the total product basket. Presently over 70% of the business for advanced textiles comes from exports.
With the recent trade-war between the US and China, there is further potential to widen the market reach in the US. By scaling-up capacities and adding newer technologies, this business is expected to generate a top-line of Rs. 10,000 million annually in the next 3-5 years.
“We maintain our focus on the domestic market and building a strong B2C presence while continuing to grow our export business. Our new initiatives such as flooring solutions and advanced textiles are contributing towards sustaining the growth momentum. Branding, innovation and sustainability continue to be the cornerstones of our differentiation strategy”
– Rajesh R. Mandawewala, Managing Director
“We are taking rapid strides in our B2C business through our own brands, licensed brands as well as ingredient brands. We have launched value brand ‘Welspun’ in the domestic market to complement our premium brand ‘Spaces’. Our domestic revenues, which should contribute 20% of our overall revenues by 2023, will also be boosted by our flooring business under the ‘Welspun’ brand”
– Dipali Goenka, CEO & Jt. MD