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Welspun India Limited
Presentation on
Seizing The Emerging Global Textiles Opportunity
Strictly Private & Confidential
Welspun Group ProfileWelspun Group ProfileUS$ 400 million, engaged in Terry Towels
Largest Terry Towel producer in Asia Polyester Filament Yarn
One of the largest Specialty Polyester Filament Yarn producer In India
Polyester Buttons and Resins Largest producer of Polyester Buttons in
Asia Cotton Yarn
One of the prominent players in India Saw Pipes
One of the largest capacities of Saw Pipes in Asia, outside Japan. PAGE 2
Strictly Private & Confidential
WELSPUN INDIA LTD- Overview Asia’s largest and world’s 4th largest Terry towel producer
Current Terry towel capacity :10,800 Tons being expanded to 23000 tons
Becoming a complete home textile player by addition of bed linen
Plant at Vapi Gujarat and Anjar, coastal Gujarat, India Distribution network in 32 countries Exports revenue- 94% of total revenue ( 68% to the US
market) Certification:
ISO 9002/14001 and SA 8000:2001 by M/S BVQI Only Indian company to license life-style brand in Home
TextilesNautica for towels in US and CanadaTommy Hilfiger for Home Textiles in India
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WelspunWelspun – – Journey to become a Global Home textile Player
Strictly Private & Confidential
CIRCA 1994
Polyester yarn manufacturer Turnover was Rs 90 Crs, Net Profit of Rs 4 Crs Started Towel Business Challenges:
To produce Towel – New Business LineTo produce Quality TowelTo Export Quality Towel – EOU statusTo Export Quality Towel to Knowledgeable Matured Market
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Strictly Private & Confidential
CIRCA 1994 – Cont…..Emphasis on Maximum Production
Quality improvement at each stage of productionProduct Analysis based on Customer feed-back
Emphasis on Volume GrowthFocus on Sales from the maximum Outlets
Started Business through Intermediaries – Exporters, Buying Houses.
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Strictly Private & Confidential
CIRCA 1999
Produced Quality TowelsExported Quality TowelsExpanded Capacities from 2500 Tons to 7800 Tons Grew in Volume and Value TermsEmerged as largest Exporter of Towels from IndiaTurnover – Rs 325 Crs – significant for Towel CoProfit after Tax of Rs (31.5 Crs)
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Strictly Private & Confidential
CIRCA 1999 - Cont…..
External Dependence- All Business through Intermediaries
Presence in Generic Products – Yarn and Plain Dyed Towels
Focus on Sales rather than Marketing Limited Designing Efforts
Limited Processing capabilities – right color/right shade/right mix was a challenge
Financial Crunch
In nut shell Innovation was a missing LinkPAGE 8
CIRCA 2000 - Putting heads together for a
New Beginning
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Strictly Private & Confidential
Strategy
Adopted Vision to become a Truly Global Player and communicate to all our employees
Breaking the midriff - middle-men/agents from the business cycle – Jettisoning Extra Baggage
Direct Relationships even at the cost of dip in sales
Decided to invest in Product Developments and Design Capabilities
In Essence Adopted Innovation in entire Business Operation - Product, Processes, Practices and People
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Strictly Private & Confidential
Innovation In ProductsParadigm shift from USE to COLLECTION range of products
New Value added product lines – Egyptian Cotton, Embroidery, Supima (American Cotton), Kid Centric Towels.
Experimented with different inputs like PVA fibers
New Product development
–Hygro Cotton
–Zero-twist
–Subslistatic Printed
–Blister Pile Towels
Developed new shades and floral prints that are trendy and inline with the Fashion Industry
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Strictly Private & Confidential PAGE 12
Process House: Fully Atomized color mixing
Design Innovation
Developed new Designs by creating one of the best Home textile designing teamDesign Studios Design house in India - 5 people 2 designers each in US and UK Appointed World class Designer from the Industry
Innovation In Processes
Strictly Private & Confidential
Innovation in Sales and Marketing Processes
Selection of Right Business Partners
Created Marketing Infrastructure Sales team in US 6000 sq. ft. exclusive showroom in New York
Distribution alliance in the US for distribution and warehousing
Created Welspun USA - 100% subsidiary to handle customers directly
Product Development skills complimented by Global Sales Network
Innovation In Processes
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Strictly Private & Confidential
Utilizing IT as Integrator
–EDI & RFID in Welspun USA
–Integration with Customers
–Electronic Coloring and Design Matching which integrates Product Design & Development
–SAP R/3 - Integrates Operations, Marketing and Supply Chain
–Reverse Auction
Innovation In Practices
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Strictly Private & Confidential
Innovation In Practices
Market Intelligence : Conducted Grid analysis of top retailers with respect to:
• Product range, • Fast Moving Items best selling SKUs• Profit margin expectation • Collection of Samples to understand global developments
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People
Paradigm shift in Mindset from Manufacturer to Marketer.
Adequate Training in SAP enabled Production and Operations
Appointed International Textile consultant to improve skill sets of employees
Appointed Experienced and result oriented people from the Industry .
Performance based Reward system
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Strictly Private & Confidential
YEAR 2004 - Revisited
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Strictly Private & Confidential
Product wise sales – in terms of % (based on ex-mill values)
The proportion of the value added products has increased
0%
10%
20%
30%
40%
50%
60%
2001-02 2002-03 2003-04
2001-02 49% 6% 16% 0% 12% 0% 0% 2% 14%
2002-03 42% 13% 12% 0% 14% 0% 0% 4% 14%
2003-04 34% 19% 11% 7% 5% 5% 4% 4% 11%
P lain DyedEgyptian Combed
Loom State Sheared
P D With Embroidery
YD WashedSublistatic
TowelZERO TWIST
YD with Embroidery
Others
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Strictly Private & Confidential
Time
Value Creation
‘952000 2003 2004 2005
Indirect Export
Direct Export
Choose & Pick amongst Retailers
High end productsBrandingBranding
Marketing & Outsourcing
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Progress in Value Chain
Strictly Private & Confidential
Long standing relationship with 12 out of 20 top retailers in the world
Customer centric Planning and Production mechanism
BETTERNWELT
MITSUKOSH
Customer Relationship
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Strictly Private & Confidential
Value Chain contribution
May&Co,
Federated,
Dillard’sBB&B, LNT,
Kohl’s J C Penny,
Target, Shopko
Wal-Mart, K Mart, Costco
Tommy Hilfiger, Nautica, Polo Ralph Lauren, DKNY, Calvin
Klein Designer Brands
Department Stores
Specialty Stores
Fashion Stores
Mass Merchants
x
+ 5-7%
+ 13-15%
2x
Retail Price Expansion
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200320042005
8%2%0%
32%33%15%
22%12%15%
1%5%10%
3%4%10%
8%12%15%
Indirect Business
Strictly Private & Confidential
FY 1999 (Rs. Crs)
Particulars FY 2005 (Rs. Crs)
325 Turnover 374
(35) Net Profit 295
41 Market Cap. 800
- FII Holdings 24%
2.66% Venture Capital & Mutual Funds
32.19%
Comparison
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Global Opportunities
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Strictly Private & Confidential
Today’s Global market place Quota phase out – An additional market of $ 1.25 bn in Towel
and $ 1.75 bn in bed linen Segment alone
Shrinking supplier base released
Pillowtex - bankruptcy - $ 450 mn of towel and $ 220mn of bed linen supply.
WPS - Chapter 11 – $ 455 mn of towels and $ 580 mn of bed linen supply.
Lucrative European market of $ 600 mn with shrinkage of supplier base.
Australian and New Zealand market of $ 50 mn –
Dropping duties – 25 to 17.5%, rendering there capacities idle
Increased domestic demand –
Few organized player in the home arena to cater to the market
Low interest rates and higher disposable income PAGE 24
Strictly Private & Confidential
Key Differentiators
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Strictly Private & Confidential
Textiles has been forecasted as another BPO success story, what Y2K did for IT , Y2K5 could do for Textile Industry
Mantra For Success as followed by Infoys -
P: Profitability
S: Scalability
P: Predictability
D: Dependability
Success Algorithm
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Strictly Private & Confidential
Vision 2005 and Beyond
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Strictly Private & Confidential
Innovation in 2005 and beyond Products: Continuous Innovations in Products- Bamboo Filaments, Hollow Yarn, Natural Towels
New Business Lines like Bed Linen
Processes: Automatic Recipe matching – Orgatex, Automated Operations like Cut and Sew.
Practices: Patenting of New products to Create differentiators.
People: Knowledge Management, Six Sigma and ESOPs
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Strictly Private & Confidential
Vision – This is what we are aiming at…………….
• Fully integrated textile company 4 Fs - from farming to factory to fashion to foreign retailing
• Organic and inorganic initiatives to target Growth
• Preferred partner in Home Textiles for any global initiative.
• Leader in embracing new technologies, product innovation, market intelligence - to offer competitive end-to-end solutions to our customers.
• Among top three home textile companies in the world.
• Market leader in Indian home textile market.
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Strictly Private & Confidential
RECOGNITIONS
National Export Award for outstanding performance from Government of India, for the
year 1996-97Texprocil* gold trophy for outstanding export
performance for successive three years (1999-00, 2000-01 & 2001-02)
Best Global Vendor by Wal-Mart in 2002 for Terry towel
Vendor of the year , FY 2002 by Shopko Stores Inc., USA for all its product categories
Operational Excellence Award by JC Penney Stores, USA for Year 2003
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WE APPRECIATE YOUR VALUABLE TIME
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