Kitex is intensifying its expansion efforts by increasing its investment to Rs. 3,000 crores in its two manufacturing facilities in Telangana. A sum of Rs. 1,500 crores will be allocated to the Kakatiya Mega Textile Park Unit near Warangal, while another Rs. 1,500 crores will go towards the Sitarampur facility near Hyderabad. The Kakatiya Park is the largest textile park in India, sprawling over 1350 acres, and operations at the unit are expected to commence by the end of Q4 FY2023.
This unit will enable Kitex to undertake activities like cotton spinning, knitting, bleaching, dyeing, printing, cutting, and sewing. The Sitarampur unit is set to commence operations by the end of FY2024. With both units fully operational, the company aims to produce 2.5 million infant garments over the next 3 years. These projects are expected to create direct employment for 22,000 people, with approximately 80% being women. Additionally, around 18,000 indirect jobs are expected to be generated.
Kitex Garments Ltd. (KGL) holds the distinction of being the world’s second-largest manufacturer of cotton and organic cotton ready-to-wear garments for infants and children in the age group of 0-24 months. Established in 1992, the company has seen remarkable growth and currently enjoys unmatched global connections.
Expansion Plans
The expansion plans are progressing as per schedule. The project loans amounting to Rs. 2023 crores have already been secured through a consortium of banks. The first project at KMTP Warangal is well advanced, with the land fully procured and buildings nearing completion. Machinery procurement has begun, with major LCs opened for the purchase of machines. The company has also contributed a significant portion of the Promoters Equity. Commercial production is expected to commence in March 2024.
For the 2nd Project at Sitarampur near Hyderabad, the 250-acre land is procured, and plans for construction and machinery procurement are underway. Commercial production is planned to commence in March 2025.
Kitex Garments is renowned for its state-of-the-art manufacturing facilities equipped with the latest and automatic machinery, including Automatic Mixing & Dispensing of Dyes, Chemicals & Printing Pastes, Cold Pad Dyeing, Fully automatic Robotized Yarn Dyeing, Digital Light Exposing – Screen Engraving System, Computerized Precision Cutting, Modern Sewing Machines, EDI capabilities, Bar coded tracking of garments, and Biological ETP & Waste Management.
Operating under the ‘Yarn to Garments’ ethos since its inception, KGL is a 100% export-oriented unit catering to prominent and renowned conglomerates in the USA and Europe markets, including Gerber Childrenswear LLC, Carters, Carters brands, H & O Fashions, Buy-Buy Baby, Ross Stores, Amazon, Target, Sam’s Club, and Walmart.
The company is steered under the leadership of Sri Sabu M. Jacob, CMD. With over 5000 employees at its facility, the company offers free food and accommodation, along with competitive industry salaries.
Outlook
Global textiles and apparel companies have reported sales at par in FY2023 year-on-year; however, all the companies have reported lower profits, primarily due to subdued demand resulting from the recession. The post-pandemic year saw a rebound in demand, driven by revenge-based purchasing. While retailers continued to stock huge inventory in anticipation of sustained demand, the US-FED hike of interest rates to unprecedented levels led to steeply rising inflation, severely impacting demand. This, in turn, resulted in distress selling at deep discounts reaching almost 90%. Businesses are now focusing on reducing inventory and sourcing just enough to manage the crisis. The company expects this to be a temporary phenomenon, as orders are already in the queue for FY2024, indicating better performance in Q1 FY2024 and a return to normalcy by Q2 FY2024.
Key Clients
The world’s leading apparel and retail brands outsource manufacturing to KGL. As one of the few players in the specialized infant garment manufacturing sector globally, KGL is among the leaders. The apparels manufactured by the company are available for sale in the world’s leading retail outlets as well as through various online retail platforms in several countries. The company is a licensee for the Lamaze Organic brand of Childrenswear in the USA and has also registered its own brand “Little Star” in the USA.