By 2030 we are targeting to have 100% sustainable cotton usage
As the largest exporter of home textile products from India, Welspun India Ltd has a strong presence in bed, bath and flooring, which makes it the No.1 choice at homes in over 50 countries with top global retailers. The company is on track to meet the changing consumer preferences, driven by its differentiation strategy based on branding, innovation, sustainability, along with sustained focus on the domestic market. In an interview with Fibre2Fashion, Welspun India CEO & Joint MD Deepali Goenka discusses home textiles, government policy, sustainability and more.
There has been a lot of talk about how India could be one of the countries that the world could be looking at as an alternative manufacturing destination. Have players like you taken any steps to reinforce this hope?
Sustainability is on the rise worldwide as more consumers are demanding greener products, and Welspun India is trying to create a sustainable manufacturing environment that could also attract other countries to manufacture here.
Further, technical textiles is a fast-growing sub-segment that is useful in various sectors. The end-use application of technical textiles is seen in industries such as agriculture, construction, sports apparel, and healthcare. India’s leap toward modernisation and its increased manufacturing efficiency are a few of the key contributors to the growth of this segment.
Supply chain is something which has come to the fore over the last two years. Earlier, the disruption was for one or two days or a week. Now, it has been over two years of disruption. A reconfiguration has happened, and many companies are doing a lot of analytics around supply chain and risk management. With the kind of population and consumption India has, the country can consume everything that it makes. The second part is Indian exports, which is still evolving. There is definitely a lot of scope here and the country can be the next hub of farm, fibre, fabric, fashion and foreign countries to develop into a powerhouse of supply chain elements.
At Welspun India, we try to be at par with the latest technological launches and use modern technology in the production of innovative, high-quality products that sets us apart, thus showcasing the many possibilities as well as the resources available in India and attracting foreign manufacturers to set up plants in the country.
How can India reduce its dependence on imports from countries like China?
As part of its zero-COVID policy, China has instituted tough restrictions in major cities due to which supplier delivery times were deteriorating, and new export orders had declined. China’s exports slowed to 3.9 per cent year-on-year in April from the 14.7 per cent growth seen in March. Retail sales contracted to -11.1 per cent.
After seeing a rise of 41 per cent in India’s textiles and apparel exports to $44.4 billion in 2021-22, the increase in cotton and yarn prices is leading to a demand drop of at least 10 per cent so far during the current financial year. However, Welspun saw a 13 per cent increase in sales during this period.
The Government of India has approved the Production Linked Incentive Scheme (PLI) for the textile sector to boost domestic manufacturing and exports of man-made fibres (MMF), garments, and technical textiles. Under the scheme, incentives worth ₹10,683 crore will be provided over a five-year period for manufacturing the products. The PLI scheme will help further in attracting investment in this segment. This PLI scheme for the textile Sector will lead to a fresh investment of more than ₹19,000 crore, cumulative turnover of over ₹3 lakh crore and additional employment opportunities of more than 7.5 lakh jobs in this sector and several lakhs more for supporting activities.
● The textiles industry predominantly employs women; therefore, the scheme will empower women and increase their participation in the formal economy.
● In addition, priority will be given for investment in Aspirational Districts, tier 3, tier 4 towns, and rural areas and due to this priority, industry will be incentivised to move to backward areas.
● This scheme will positively impact especially states like Gujarat, UP, Maharashtra, Tamil Nadu, Punjab, AP, Telangana, Odisha, etc.
The majority of Indian imports are from China, so if India wants to reduce this dependence, we will have to follow some steps such as product segmentation, making use of the country’s existing ecosystem, becoming a member of key trade agreements and modifying the work processes and organisational design of the Indian government. Moreover, India should get more into the global value chains. The government can provide further help through R&D-specific incentive plans, concessions and schemes that will help small- and medium-sized companies to develop the necessary technology and practices to improve the quality and quantity of production in the textile industry. This would increase domestic manufacturing in textile brands and also lower our dependence on Chinese imports.
Welspun constantly puts in efforts towards being self-efficient and producing good quality output. We are also trying to increase domestic distribution by reducing international exports slightly so that the country does not have to import from China, at least in the textiles sector. In addition, we have 360-degree capabilities supported by various facilities. These facilities include cotton warehouses, composite mills, and a workers’ colony in the factory vicinity.
How big is the market for home textiles worldwide? What is India’s share in it?
Globally, the US and Europe are the biggest consumers, constituting 60 per cent of the home textiles imports, while nations like India, China and Pakistan are among the key suppliers. China has the maximum share at 39 per cent with $18 billion, followed by India at 11 per cent with $5 billion, making it the second-largest supplier. The global home textiles trade is estimated to further increase by 2025.
India is acknowledged all over the world for its variety and unique designs in home textiles. The Indian domestic textile and apparel market was valued at $75 billion in 2021. It fell 30 per cent from $106 billion in 2019-20 due to the pandemic. The Indian textiles market is expected to recover and reach $190 billion by 2025-26.
Welspun enjoys long-standing relationships with top retailers in the US and Europe and supplies to 14 of the top 30 global retailers. It commands a lion’s share of home textiles exported out of India. Increasing geographical and client diversification is improving the company’s risk metrics. We also have seven trademarks and have applied for six patents till date. Welspun derives ~30 per cent of sales from innovative products.
The Indian home textiles market is heavily unorganised. How can organised players like you bring out the untapped potential of the same?
Things that could be done include assisting small and medium entrepreneurs in the textile industry to consolidate investments in textile parks by providing financial support for world-class infrastructure in the parks. Welspun has done this by setting up several such parks.
We have even built 360-degree capabilities. Further, we are focusing on increased employment, especially for women. We have also come up with initiatives like Wel-Krishi, which aids in educating and helping farmers produce organic yields in their lands and would benefit them as well as the environment. Moreover, we are constantly incorporating the latest modern technologies in the production of our innovative and high-quality products, thus staying abreast with the changes.
How does your supply chain network work? What regions of the world are part of your supply chain?
We have warehousing facilities in key markets to ensure efficient and smooth distribution to our retailers. All our warehouses have the best supply chain management (SCM) systems. Apart from the Indian warehouses, we have facilities in Ohio in the US, and Manchester in the UK, supported by a strong SCM and co-planning team to provide support on inventory and other related matters. There has been an immense growth of our online and omnichannel, owing to which we have invested in strong in-house capabilities. Moreover, we are investing in Industry 4.0 technologies and capabilities to make our supply chain more efficient.
Along with the Indian and European warehouses, we have warehouses in three locations in the US, Midwest and Canada, which enables us to deliver across these markets quickly and efficiently.
What is the USP of your products?
The USP would be that we have been constantly trying to come up with innovative, sustainable products with the use of modern technology. Welspun India is focusing on developing sustainable product offerings and has developed innovative wrinkle-resistant organic sheets towards that goal.
With the help of Hygro Cotton technology, we are manufacturing towels that are softer and more absorbent after every wash, and sheets that provide temperature regulation. Our anti-allergen textiles have innovative Nanocore, which creates a natural allergen barrier and chemical-free finish so that it is comfortable on the skin. This product that we offer is certified asthma and allergy-friendly, and we are the first ones to manufacture such products with the use of our patented high-end technologies.
Moreover, charcoal is one of the hottest products in personal care today because of its cleansing and detoxifying properties. We have started using charcoal in our line of textiles, which are soft, breathable, and hygienic.
LVT (luxury vinyl tiles) & Carpet flooring is quite popular in the US but is still relatively unknown in India. Welspun was the first in India to manufacture and sell these products. Further, we provide various products under several brands like SPUN, WelHome, Welspun Health, and Spaces – all of which cater to the different needs of people, hence not restricting the choices of the consumers and giving them a variety of options to choose from.
Where are the raw materials sourced from?
Mostly the raw materials like cotton are sourced from the farmers, and for this, we had even come up with an initiative wherein we encourage farmers to grow organic products in their farmlands and we provide the resources required for the same. These organic products, when grown, are then sourced and used for the manufacturing processes. Earlier, Welspun had invested almost ₹1,000 crore to scale up its yarn and cotton production at its two plants in Gujarat, in order to reduce dependence on external sources for raw materials – the benefits of which we are reaping today. Around 75 per cent of our raw material requirement of yarn and fabric comes from our facilities and some are sourced from outside.
How much of your production is exported? Which are your major export markets?
We export more than 94 per cent of our home textiles products to over 50 countries. More than 68 per cent of the production is exported to the US, 23 per cent to Europe, and the rest to the Middle East, Australia, and Mauritius.
But now our focus is shifting towards increasing the domestic distribution, especially in the B2C segment and that we have started off with the launch of our brand ‘Spaces’
Which brands and retailers are you currently associated with?
Recently, Welspun has associated with DuPont Biomaterials to launch a home textile range that includes bath towels and bedsheets made with bio-based materials. The collaboration with the DuPont Biomaterials team is a crucial step for us.
Further, Madison Retail Paradigm had partnered with Welspun to launch their new segment ‘Welspun Health’, which offers protective and hygiene solutions for medical professionals and consumers through personal care and other relevant lifestyle products.
As far as partnerships in the future are concerned, we have two licensed brands – Martha Stewart and Scott Brothers as well. I would say that we have been a home solution provider instead of just a textile manufacturer. We have a diversified portfolio of brand licences and in recent times, e-commerce has become an integral part of Welspun.
What major disruptions do you see in the home textile market in future?
The home textile market would grow in the coming years, owing to which there could be disruptions or problems in meeting the increased demand due to the changing expectations of consumers. This is especially relevant after the pandemic as consumers would desire for more responsible consumption and ‘green’ products.
There might be a temporary shift in consumer opinion and behaviour in the luxury segment. Consumers will want more products that are hand-made and sustainable and would want less luxurious modern designs for their homes. The high cost of raw materials and logistics could also be a major disruption.
What steps should the government take to further boost the home textiles industry?
There is a strong interdependence between cotton farmers and the home textile industry. Welspun is dedicated to weaving its growth story as the fabric of the nation through sustainable and responsible practices. We are working directly with farmers and are committed to supporting them with agronomic know-how, improving yields and getting better pricing. Achieving that goal, however, requires strong, growth-oriented fiscal measures and policy interventions from the government.
Recently, the Indian government has taken a major step towards recapturing its hold in the global textile trade with the introduction of the PLI scheme with an approved outlay of ₹10,683 crore for five years. The purpose of the scheme is to attain the scale of economies, particularly in the field of apparel, where the Indian share in the global market is very negligible. The scheme intends to give companies incentives for incremental sales from products manufactured in domestic units. It also aims to promote the production of specific apparel, MMF fabrics and technical textiles. The scheme is expected to benefit organised players in the field of technical textiles and apparel. It will create additional employment for a large number of people. With the combination of the PLI and the structural shift in the sourcing strategy of the global retailers, India is well poised to establish itself as a reliable and competitive sourcing hub for textiles globally.
How do you keep a track of textile market trends and other related information?
At Welspun, we actively listen to consumers through research. Our Welspun research team guides our decision-making with regard to product development and consumer marketing. Sometimes I myself go on the field and speak personally with the consumers in order to know the latest trends and understand if there have been any shifts or changes in consumer demand and what they actually want. In addition to research, these face-to-face conversations help us gain a better understanding of current trends and more.
This helps us in creating exclusive merchandising ideas and providing them at different prices, with our capabilities expanding from design to execution, thus ensuring that we are satisfying the needs of consumers with various income levels and needs. We continue to invest in consumer-driven innovations through various collaborations and offer a wide range of solutions in terms of sustainability, performance, wellness, fashion, and price.
What are the short and long-term sustainability goals set at Welspun India?
We are responsible towards the people and the planet and try to be as sustainable as possible. We at Welspun believe that incorporating sustainability in industry practices and our culture is our responsibility and it would even give us a platform to reinvent the textiles sector. ESG has become the topmost focus of all global brands and industries today and at Welspun too, utmost focus and importance is given to the sustainability practices adopted.
We have laid out a blueprint for our business to take on the ESG-related issues and come up with solutions for them. To achieve our vision and set the highest standards of best practices, we are in the process of adopting science-based initiatives.
Other future goals include use of 100 per cent renewable energy. Our 2030 goal is to ensure we obtain 100 per cent sustainable cotton and that we do not generate any waste that will go into landfills.
SPUN has helped local communities, especially women, by providing them with opportunities that have increased their incomes. We will continue to tread upon this path in the future too.
Welspun set up a sewage treatment plant in Welspun city to treat and reuse the entire city’s sewage for industrial use. This is just one step further towards using no freshwater for our operations as we have a larger goal to achieve – of being fresh Water Positive in Production operations by 2030.
What is on the cards at Welspun? Any new investment or expansion plans?
Welspun India is aiming towards expanding its manufacturing footprint with capacity increases in towels, bedding, rugs and carpets in the coming months.
Further, we are looking to invest around ₹800 crore in capacity expansion of the home textiles and flooring businesses in the coming years.
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