Kitex has announced investment of Rs. 400 crores, Rs. 200 crores each, in its proposed two wholly-owned subsidiary companies to increase the manufacturing capacities to meet the rising future demand. The said investment is from internal accruals and borrowings. The company which has appointed KPMG for the total implementation of the project, is already implementing phase I expansion of Rs. 241 crores of capital investment for automation, new plant & machinery and other amenities.
Mr. Sabu M. Jacob, Kitex Chairman and Managing Director, said: “Kitex business is undergoing a dynamic transition taking the company to the next level. The management is deeply involved in further improving the company’s global advantage. The succeeding few years are going to be very important to our company as we capitalize its inherent strengths which are primarily our profoundly advanced processes, practices and the way we engage with our customers”.
Producing infant garments, Kitex is the world’s leading manufacturer of specialized infant apparels. Its products are sold in over 18 countries through clients such as Gerber, Walmart, Amazon, Mothercare, Carters, The Children’s Place, Kohl’s, Buy-Buy Baby, Ross Stores and Target. In terms of clients the key market for the company is the US (99%), followed by Europe (1%). Kitex has an associate in the US by name Kitex USA LLC which takes care of the new forward integration initiatives there are in Canada. The company has also set up a design studio in the US for valued-added design services.
Kitex clocked a marginal top-line growth of 2.04% over the previous year. At the standalone level, the gross revenue from operations stood at Rs. 55,725.42 lakhs compared with Rs. 54,590.13 lakhs in the previous year. The company has been allotting regular capex for improvement of technology and infrastructure and is in the process of upgrading its current facilities so as to expand its capacity. It is a vertical set-up with knitting and processing of fabrics, until finished garments are done in-house.
The facility at Kizhakkambalam near Kochi covers an area of 180,768 sq.ft., one of the largest in the world under one roof. The process line is equipped with digital dispenser system for error-free, automatic and computer-controlled preparation of color guidelines, high quality knitting machines, most modern dyeing, printing and finishing systems that use cutting-edge technology. Its garmenting unit uses the latest machinery for pattern Computer-Aided-Design (CAD), plotting and grading. It has automatic spreader machines which enhance the speed of spreading and automated cutting machines for faster and precision cutting. Kitex employs nearly 4,372 people with a daily capacity to manufacture 3,60,000 units of infant garment.
The factory is equipped with the latest sewing machinery that ensures stain-free, quality sewing, and the state-of-the-art spectrophotometer ensures electronic color reading and transmission. The plant produces knitted fabrics that are of exceptional quality, and is well appreciated and recognized by reputed childrenwear apparel brands in the US and Europe.
Global markets
The global market is abuzz with debates and impact analysis on the recent escalation of trade sanctions between the US and China. In the event of further escalation of this development, global buyers, particularly those based in the US, may restructure their supply chains and opt for sourcing products from countries other than China. This could create a substantial opportunity for manufacturers in other countries, including India. The supplier consolidation trend as well as the trade war-related fall-out is already unfolding more opportunities that support in the near future as well as long-term growth.
Despite the unforeseen challenges from the external environment we continue to strengthen our internal operations by upgrading technology, streamlining processes and rationalization of human resources. This is in line with the company goal to enhance its capacity by 2021. This strategy is also consistent with the supplier consolidation trend among major infant garment buyers in our markets. To ensure quality, reliability and for the better cocreation of value, many buyers are doing away with multiple suppliers and are consolidating the purchase from large and more dependable partners. Kitex, being one of the largest infant garment manufacturers in the world, is poised to benefit from this trend. Its USA LLC licensed brand “Lamaze” and its own brand “Little Star” have already started establishing their market presence. The company is providing value-added service in the form of design services to its clients.
“To ensure quality, reliability and for the better co-creation of value, many buyers are doing away with multiple suppliers and are consolidating the purchase from large and more dependable partners. Our company, being one of the largest infant garment manufacturer in the world, is poised to benefit from this trend”, asserted Mr. Sabu Jacob.
Having an integrated and traceable value chain which meets the global standards at various stages of the product supply chain is the key global differentiator at Kitex. The company buys yarns, dyestuffs and chemicals from approved sources which are tested as per the Oekotex Standard 100 Class-I and GOTS Organic standards. The dye recipes, dye dispensing and yarn dyeing are done using the robotic technology for accuracy and quality.