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Opportunities open up as global textiles supply chain heads for recalibration

"Arvind Ltd will demerge some of the brand’s business and engineering business in about a month’s time. The company will relist the engineering and business in January 2019. “We are excited about the opportunity in the textile business as the world is heading for a large recalibration of supply chain in textiles. In the $750- billion global trade, 35 per cent belongs to China, India is the second largest with 5 per cent. But with China’s cost dramatically going up, global trade is moving to South Asia,” says Kulin Lalbhai, Executive Director."

 

Opportunities open up as global textiles supply chain heads for recalibration 002Arvind Ltd will demerge some of the brand’s business and engineering business in about a month’s time. The company will relist the engineering and business in January 2019. “We are excited about the opportunity in the textile business as the world is heading for a large recalibration of supply chain in textiles. In the $750- billion global trade, 35 per cent belongs to China, India is the second largest with 5 per cent. But with China’s cost dramatically going up, global trade is moving to South Asia,” says Kulin Lalbhai, Executive Director.

Providing solutions rather than raw materials

Arvind aims to become a solution provider rather than a provider of raw materials for garments. “We will produce end-to-end garment packages. We call verticalisation. A lot of the garmenting capacities are going to come up, which Arvind will be putting up in India and Ethiopia,” Lalbhai informs. “We expect 50 per cent of our business to move into the vertical route from 10 per cent today. We can provide a customer-oriented asset light growth strategy for end-to-end solutions for all our customers,” he further adds.

There are a couple of other strong contributors to this growth strategy. One of this includes advanced materialsOpportunities open up as global textiles supply chain heads for recalibration 001 business that has come of age. A very large multi-billion dollar market is emerging in India and the export opportunity also. So that business is going to grow quickly upwards of 25 per cent.

Strong predictions for future growth

The other area Arvind has ventured into is textiles performance wear. “We believe the active and athleisure are very large segments which will emerge and this segment has been dominated by Korea, China and Taiwan. We intend to double the textile business from Rs 6,000 crore ( $US 0.82 bn) to Rs 12,000 crore ($US 1.64 bn) over the next five years. Our garmenting capacity will be increased to 125 million garments,” states Lalbhai

The brand’s business has grown at more than 20 per cent CAGR over the last five years. “We expect to continue on a similar growth trajectory of 20 per cent growth for the next five years. We want to more than double our business from to Rs 9,000 crore ($US 1.23 bn) in the next five years,” he notes.

E-commerce constitutes 12 per cent of the company’s business. Arvind has an omni channel strategy where the company integrates inventory across both online and offline markets. It is growing through a combination of third party marketplaces and its own Omni channel portal NNNow.com.

Strong execution leads to great traction

Arvind’s business has seen great traction due to a strong execution track record over the last five years. “We have strong customers who are constantly growing with us both in India and outside India. Our order book has been growing at more than 30 per cent every year,” states Lalbhai. “We aim to reach over Rs 20,000 crore ($US 2.73 bn) plus in the next five years. This will double our business Rs 6,000 crore ( $US 0.82 bn) to Rs 12,000 crore ($US 1.64 bn) . It is more than doubling the brand’s business from Rs 4,000 crore ($US 0.55 bn) to Rs 9,000 crore ($US 1.23 bn) ,” he adds.

 

 
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