Vardhman textile
- 1. TEXTILE INDUSTRY Mahesh Shet Priti Sharma Namrata Gawande Parikshit Rao Tanya D’mello
- 2. INDEX • Introduction • Top Milestones • Main Raw Material & Finished Products • Production Process • HR Strategies • Marketing Strategies • Accounting Ratios • Effects of (Brexit, Demonetisation & Trump) • Future Growth • Conclusion
- 3. Introduction: Indian Textile Industry Indian Textile Industry 11% of total exports Employs 100 million Organized & Unorganized 5% of GDP & 14% of IIP Oldest Growth $223bn by 2021.
- 4. Introduction: Vardhaman Textile Ltd. • Flagship company of the Vardhaman Group incorporated in 1973 as Mahavir Spinning Mills Ltd (MSML). • 25 manufacturing facilities across India. • 26,000 + employees across the company and its subsidiaries. • Revenue Rs. 5587crs (31st March 2016). Chairman: Shri Paul Oswal Subsidiary Companies • VMT Spinning Company Ltd. • VTL Investments Ltd. • Vardhaman Yarns and Threads Limited. • Vardhaman Acrylics Ltd. • Vardhaman Nisshinbo Garments Company Ltd. Associate Companies • Vardhaman Special Steels Ltd. • Vardhaman Spinning and General Mills Ltd. (Vardhaman Holdings Ltd.)
- 5. Major Milestones 1973 1976 1981 1982 1989 1991 1993 1995 1996 1999 2008 2009 2011 Incorporation of MSML/Vardhama Textile Ltd. First 25,000 spindle capacity unit set up Hoshiarpur, Punjab. Diversified into manufacturing of Sewing Threads. 100% export oriented unit for cotton yarn set up in MP. J/V Marubeni Corporation & Toho Rayon Company Limited of Japan set up VMT Spinning Company Ltd. JV with Marubeni Corporation and M/S Japan Exlan Company Limited for setting up an Acrylic Fibre project Vardhman Acrylics Ltd (VAL). Entered into a J/V with M/S Barbour Campbell Group Limited of Ireland set up Barbour Vardhman Threads Limited (BVTL). Brought entire stake in BVTL renamed it Vardhman Threads Ltd. (VTL). Vardhman Yarns & Threads Ltd. (VYTL) incorporated as a joint venture with American & Efird (A&E). Vardhman Nisshinbo Garments Limited, a JV with Nisshinbo Textiles Inc., Japan was set up for manufacturing formal shirts. Union Unrest caused 6 + month factory shutdown. Set up factory in HP capacity of 25000 spindles. VSS demerge and VTXL pure yarn and fabric.
- 6. Raw Materials & Finished Products Raw Materials • Raw Cotton • Yarn • Synthetic Fibre • Fabric • Dyes • Chemicals & Auxiliaries Finished Products • Yarns & Speciality Yarn • Fabric • Sewing Thread • Acrylic Fibre • Garments
- 8. HR Strategies • Human Capital most Valued Assets • Rigorous Recruitment • Culture of continuous learning • In house and on the job training • Systematic appraisal for talent development • Encouraged informal mentorship • Training through premiere institutes (domestic and international) • Open and transparent top – down communication • Employee engagement and team building practices (QCT, GCM etc) • Employee stock options • Entirely home grown senior management.
- 9. Marketing Strategies • Intensive market research both domestic and international. • Concentration on a niche market i.e. Five major textile products. • Long-term partnerships with key stakeholders i.e. customers, vendors and partners. • Innovative and specialised product development and diversification based on customer feedback. • Strategic international alliances to upgrade technology and endure global standard product quality. • Policy of sustainable strategic expansion. Sample of diversification of Vardhaman’s yarn product line.
- 10. Accounting Ratios Ratio Type 2016 2015 2014 Profit Volume Ratio 55% 49% 56% ROCE 20.75% 15.87% 23.20% Current Ratio 1.60:1 1.76:1 1.87:1 Debt Equity Ratio 0.28:1 0.42:1 0.67:1 Divident Payout Ratio 14.62:1 17.72:1 10.74:1 Vardhaman Ratio Analysis (3 Years)
- 11. Brexit, Demonetisation & Trump Brexit: • The UK accounts for more than 25% of india’s textile and appral exports to the EU. • Not effect on Indian export tariff preference to the EU. • May provide opportunity for a FTA with Britain. • Short term negative implications expected. Demonetization: • Slow down of domestic demand for textile end products immediately after note ban. • Securing raw material and selling finished goods to a hit. • Shot term slowdown in operations in large firms. • Delay in cotton exports. • Small cash dependent firms took a major hit. President Trump!: • Scraping of the TPP. • Opportunities to India.
- 12. • Global environment supportive of growth in Indian Textiles • Indian textile expected to grow to US $470 Bn by 2025 – (Investment US $320 Bn) • Vardhaman Conservative growth strategy. • Retain manufacturing licences to A & E threads. • Consolidation, Specialize and expand the existing niche markets i.e. Yarns & Fabric. • One stop shop for fashion yarns and fabric. Future Growth
- 13. • Successful conservative expansion. • Enhanced product quality and FDI. • Focus and enhance USP to attain market leadership. Conclusion