Sustainability and traceability will be drivers
GHCL is one of India's leading manufacturers of home textiles, with in-house spinning unit having capability to manufacture multiple varieties of 100 per cent cotton and blended yarns at various facilities. Manu Kapur, President and CEO of GHCL Home Textiles, talks of trends and plans.
GHCL Limited, with headquarters at Noida in Uttar Pradesh, is a well diversified group with footprints in the chemicals, textiles and consumer products segments. The textiles division at GHCL is an integrated setup commencing from spinning of yarn to weaving, dyeing, printing and processing till the finished products like sheets and duvets take shape and are primarily exported worldwide.
It is one of India's leading manufacturers of home textiles with an in-house spinning unit at Madurai, Tamil Nadu and a state-of-the-art home textiles facility at Vapi, Gujarat with a weaving and processing capacity of 45 million metres of fabric up to made-ups. A perennial innovator in bed linen, it has the flexibility to process both cotton and blended fabrics.
GHCL has achieved a compound annual growth rate (CAGR) of 14 per cent in the top line of its textiles business for the last eight years. With an existing capital investment of ?13.50 billion in the textiles business, GHCL plans to invest another ?3.50 billion in the next two years.
In September, GHCL launched Cirkularity, a new brand of eight lines of bedding supporting the circular economy at the New York Home Fashions Market Week. These lines centre on "reduce, reuse and recycle". Rekoop, the inspiration behind Cirkularity, is a brand of bedding products made from recycled plastic (rPET) and is the first bedding product to use Applied DNA Sciences' CertainT platform. Rekoop bedding products will be available for sale in the US beginning first quarter 2019.
Which consumer trend is going to drive the way you do business in the next 2-3 years?
In my opinion, the trends that are going to drive business over the coming years are sustainability and traceability. Customers today are very conscious about their responsibility towards the planet and, according to a recent study, 66 per cent of global millennials are willing to spend more on brands that are sustainable. Clearly, sustainability is where brands will compete for the millennial spend. Moreover, there is no sustainability without traceability. Provenance and supply chain traceability of raw materials is of paramount importance for retailers and brands to stand behind their claims of sustainability.
Which are your best-selling products? How many collections do you come up with each year?
Our current best sellers are our 200 and 300 TC Percales and our 600 TC Supima. We come up with at least two major collections each year, coinciding with the New York Home Fashions Market Weeks in March and September.
Which are your major markets? What is the annual production capacity at your units?
The US, Canada, UK, Europe and Australia. We see prospects growing in the UK and Continental Europe substantially. Our annual capacity is 15 million metres for weaving and 45 million metres for processing. We cut and sew 7.2 million sheet sets annually. About 90 per cent of what we manufacture is exported. We source raw material (primarily cotton) from the US, Australia, Egypt and India.
And, which manufacturing trend is going to drive the way you do business in the next 2-3 years?
Again, sustainability in manufacturing is decidedly going to drive the way one does business over the next few years-sustainable raw material usage, sustainable production practices and sustainable supply chain solutions. The relevance of 'responsible consumption and production', one of the 17 Sustainable Development Goals cannot be over-estimated. The linear economy model is giving way to the circular economy model. The trend of focusing on "Reduce, Reuse, Refurbish, Repair and Recycle" is fast catching on.
What has been the response to Cirkularity so far? But this was launched in New York. How are you looking at the Indian market?
The response to Cirkularity has been overwhelming. Customers the world over have shown tremendous interest in the collections that form part of Cirkularity, all of which support the circular economy. Our plan for Cirkularity for the near term is to focus on markets that have a mature customer base that is sensitised to and willing to support the pressing need of curtailing environmental degradation-markets such as the US, Canada, Europe and Australia. We plan on launching some collections within Cirkularity in India online in 2020.
What impact has the US-China trade war and the rupee depreciation had on business?
The oscillating US-China trade war hasn't had much of an impact on business in India. There haven't been any major shifts of business. The impact of depreciation of the rupee has been nullified largely because of forward contracts and the effect of imports.
What are the short and long-term sustainability goals set at GHCL?
Over 40 per cent of our energy requirement for spinning-which translates to 25 MW-comes from renewable wind energy. We are working towards carbon neutrality for our entire textiles business by 2021. We are also actively using sustainable raw material in textiles-more sustainable cotton (BCI/organic/Supima), cellulosic fibres (Tencel Lyocell) and recycled PET fibres. In keeping with the circular economy, we try to reuse as much material as we can. For instance, we make paver blocks from fly ash, plastic and limestone fines.
Please tell us more about the Rekoop collection.
Rekoop is a sustainable bedding solution that is made using a blend of cotton and recycled polyester.
The recycled polyester is made from post-consumer PET bottles by Reliance Industries Limited (RIL). What makes the concept unique is the fact that the recycled polyester is forensically tagged through the CertainT platform of Applied DNA Sciences in New York. This secures provenance and traceability across the entire supply chain and accords unparalleled authenticity to the product.
How do you look at the exports market in the coming year? How do you think the US-China tradeoff and Brexit would affect GHCL?
The headwinds in the industry have been immense. The underperformance of brick and mortar stores, the dwindling of the department store format in the US, rampant store closures, a dilution of the wallet spend on retail and simultaneous growth of capacities the world over. As far as we at GHCL are concerned, the focus for us will be to continue to carve a niche for ourselves around sustainability, traceability, innovation and giving back to society. We will hence, by design, try and stay insulated from sporadic opportunities that come up on account of shifts in bilateral/ multilateral relationships.
How do you look at the subjects of circular economy and blockchain?
The linear economy necessarily must give way to the circular economy, if we are to have any chance of saving our planet. Excessive consumerism and unmindful waste have brought us to a point where doom is staring at us in the face. In keeping with one of the 17 SDGs 'responsible consumption and production', industry has to wake up to reality and do its bit in terms of saving the environment. 'Reduce, reuse, refurbish, repair and recycle' will need to be mantras that manufacturers live by. In terms of blockchain, the unalterable chain of custody of data across the supply chain will secure traceability of material, which again, is the need of the hour.
What fabrics/materials are preferred by consumers for bedding?
Customers are primarily looking at sustainable material. Cotton is definitely still largely preferred by customers. We are moving towards 'more sustainable cotton' in a big way-through the Cotton Leads programme, which fosters efforts in sustainable cotton production in the US and Australia, through the Better Cotton Initiative (BCI) and the Global Organic Textile Standard (GOTS) for organic cotton. The other material being preferred by customers is cellulosic fibre such as Lenzing's Tencel Lyocell, which is biodegradable and compostable. Recycled polyester is again a material that is being looked at strongly.
Consumer preferences would be the strongest for what kinds of products-handmade, functional, sustainable, ecofriendly? Which product lines do you plan to introduce in the near future?
There is a strong skewing of preferences towards sustainable, ecofriendly products. Our next big thrust is on bedding solutions that centre around health and wellness. We will be launching a new brand centring around this concept during the New York Home Fashions Market Week in March 2019. Stay tuned.
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