Interview with Mr. B K Goenka

"The corporate journey has been thus: In the Beginning... 1985 The launch of Welspun - a polyester texturising yarn unit at Palghar and at Achhad in Maharashtra. Next Steps... 1993 Maiden foray into manufacture of Terry Towels at Vapi, Gujarat. 1995 Backward Integration - Cotton Yarn Spinning unit set up at Vapi. 1997 Diversification into manufacture of steel pipes Submerged Arc Welded (SAW) pipes of Longitudinal (LSAW) and Spiral varieties (HSAW) at Dahej. 1998 Consolidation in the Polyester Filament Yarn (PFY) segment - set up a vertically integrated PFY plant at Silvassa to manufacture Specialty, Texturised & Dyed yarns. Newer Partnerships... 1999 A strategic Joint venture with Vincenzo Zucchi S.p.A of Italy, Europe's leading home textile player, to manufacture Bathrobes at Vapi. 2001 Joint venture with the world's second largest pipe coating company 'Eupec Pipe Coatings GmbH', Germany to provide 'Pipe Coating' solutions at Dahej. This venture was merged with Welspun Gujarat Stahl Rohren Limited in 2005, to provide complete pipe solutions under one roof. Enhancement... 2004 Expansion in Home textiles & Steel pipes at Anjar, Kutch. It includes doubling its existing capacity of towels, enhancing the cotton yarn spinning capacity and making an entry into bed sheetings. In the steel pipe business, apart from expanding capacities for LSAW / HSAW / Pipe Coatings - ERW pipe product range was also introduced. The project with an outlay of Rs.10,000 million has been completed well ahead of schedule. 2004 Recognising the huge potential in the construction & infrastructure industry, Welspun commenced manufacturing of TMT Rebars, Ingots and Billets. A captive power plant is installed at Anjar, Kutch. The Corporate Journey continues... With the passage of time, Welspun is now deeply rooted in its core businesses and has branched out to attain more. In the last 20 years, it has ventured into diverse industries that hold true potential. Each expansion capitalizes on the growth opportunity available to the maximum and also limits the dependence on one industry. This quest to attain more has resulted in diverse branching out ranging from textiles, key industrial products and world class Towels to Bathrobes, Buttons to Cotton Yarns, Specialty Polyester to Texturised & Dyed Yarns, Ingots to Billets, Submerged pipes to Pipe coatings. This variety also provides a solid base for brands to evolve. The launch of the exclusive, high-end fashion concept 'spaces - Home & Beyond' provides home decor for the Indian market. From Oil & Gas majors to infrastructure bodies, departmental stores to five star hotels, all source their needs from Welspun. The quest for continuous growth and the ""Dare to Commit"" core philosophy at Welspun remains its motivating force & inspiration. Excellence has been the driving force behind every venture. Every branching out sustains its growth due to strong relationships with shareholders, customers, suppliers, employees and the community at large. It truly represents a storehouse of resources and opportunities. A proactive set-up with a global approach, Welspun is driven by its mission oriented towards innovation. Attaining Targets... Supported by Domestic and International Lenders - Participation by renowned Investors - ICICI Venture, Temasek (Government of Singapore). SBI, BOB, Standard Chartered Bank etc. with total financial facility of over Rs. 2500 crores."

"We have emerged as a leader in each category : Terry Towels : A leading Home textile company in Asia and amongst the Top 3 Terry Towel producers in the World. SAW Pipes : One of the largest suppliers of SAW Pipes in Asia, outside Japan. Suppliers of pipes to the World's deepest pipeline in the Gulf of Mexico. Polyester Filament Yarn : One of the largest specialty Polyester Filament Yarn producer in India and a key player globally. Cotton Yarn : One of the most prominent players in Quality Cotton Yarns in India.With an employee strength of over 10,000 people across varied locations, more than 2500 vendors and 1500 customers across the globe, Welspun upholds the confidence of over 50,000 shareholders."

"The Indian textile industry has performed reasonably well on an overall basis, after the removal of quote regime. While there has not been a substantial increase in exports of cotton textile and yarn product categories, the home textiles and made-ups segment has done exceedingly well. India is recording positive growth rates in its exports to US and European Union. This would be further consolidated in the coming months. Post quota India ranks second in the race for Global market share. As per the US Office of Textiles and apparel, imports of cotton apparel products from India have surged by approximately 40 % in the first four months of 2005. The government has initiated positive steps to make the Indian textile sector robust working on rationalizing fiscal levies and excise duties. Employment is on the rise. Significant capacity expansions have resulted in employment generation. Welspun individually has appointed over 3000 people in the last 9 months. Over 600 crores expansion has been completed in the last 9 months. Further Welspun has embarked on another expansion project amounting to 1650 crores. Both these projects have involved the import of brand new state of the art machinery which would be amongst best in the world and will ensure competitiveness of the company for a longer period of time."

"Breaking the midriff - middle-men/agents from the business cycle - Jettisoning Extra Baggage Forging direct Relationships even at the cost of dip in sales Welspun adopted vision to become a truly global player and communicate to all our employees In Essence, it adopted Innovation in entire Business Operation - Product, Processes, Practices and People. Innovation in Products : Implementing a paradigm shift from USE to COLLECTION range of products. Introducing new value added product lines - Egyptian Cotton, Embroidery, Supima (American Cotton), Kid Centric Towels. Experimented with different inputs like PVA fibers Spearheading new Product development, examples are cited below: Hygro Cotton Zero-twist Subslistatic Printed Blister Pile Towels Have developed new shades and floral prints that are trendy and inline with the Fashion Industry Innovation in Processes : Process House: fully atomized color mixing Design innovation Design Studios Design house in India - 5 people 2 designers each in US and UK 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 Welspun's product development skills are complimented by a Global Sales Network Innovation in Practices 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 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 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"

"Our committed investments for capacity expansion in the phase two at Anjar are approx. Rs. 21, 000 million. A) Plate Mill - Rs. 12,500 B) Textile Expansion - Rs. 6,500 million C) Corporate Cotton Farming- Rs. 2,000 million"

"For Welspun social responsibility comprises a meaningful contribution in 6 diverse areas: 1) Health : - Right from providing required medical facilities at all plant locations Welspun has a vision to provide state of art medical facilities not just for employees of Welspun but also for local populace. - Another step in this direction is organization of medical camps like cancer detection camps and blood donation camps. 2) Education: - Adequate education facility is the prime focus for Welspun. Step in this direction is creation of Welspun Vidya Mandir which enabled education not just to children of Welspun employees but also to people around. 3) Environmental protection: - Right from effluent treatment plant and waste disposal system, Welspun is conscious of maintaining the ecological balance at all plant locations. Another effort in this direction is rain water harvesting and aforestation of the local area. 4) Empowerment of Women: - Welspun by its social activities believes in providing empowerment to women. Sewing and embroidery coaching classes are organized in Gujarat villages. This provides regular income to women and also preservation of the local arts / heritage. Another effort in this direction is providing girls education which has been ignored in many parts of Indian society. 5) Development of grass root administration: - Since Welspun believes in welfare of employees and local population to the maximum extent possible, efforts have been taken towards effective formation of Panchayat and also helping in local administration. 6) Other social activities: Besides contributing generously for Earthquake relief, Tsunami relief and other natural catastrophes, Welspun is working in providing water line in the region of Kutch for social / industrial usage since water is scarce in the local Kutch region. Once earthquake devastated Anjar is now an industrial paradise due to the investments done by Welspun contributing over Rs. 1200 crores and further Rs. 2500 crores committed to be invested in the next 18 months. This will provide local employment and also boost auxiliary industries. In this region some directly benefited industries are transport and hospitality industry. Initiatives of Welspun also attracted other corporates now investing in the region which is enabling proper utilization in the region of ports and railways."

"As explained above, Welspun's innovation in products, processes, practices and people has led it to have an enviable relationship with its high profile clients. Long standing relationship with 12 out of 20 top retailers in the world Customer centric Planning and Production mechanism The proportion of the value added products has increased over the last few years."

Fortunately for us, we do not face any such problem. The raw material for us is the medium quality cotton which is in abundant supply wherever our factories are located.

"The textile unit at Anjar is a state of the art facility with imported machinery for producing towels and bed linen products. The unit is capable of end to end processes ranging from spinning, weaving, processing, cutting, sewing and packaging making it one of the largest, fully integrated home textile units in the country. The pipes unit is capable of producing the complete range of ½"" to 100"" pipes, all under one roof. Thanks to its imported technology that makes it a unique plant in terms of producing both spiral and LSAW pipes. Thus making it a one stop shop for the complete range of pipes (1/2"" - 100"") and for any requirements in the Oil and gas sector. The two ERW plants for both the ranges of pipes (1/2""-6"" and 6""- 16"") are geared to produce the highest grade of steel with an optimum capacity on par with global standards. The unit will also incorporate a pipe coating facility, which will be amongst the best in the world."

"Technology plays a key role right from mixing of colour scheme, design to the production process. Products and technology are interdependent, and in fact all company operations are on SAP and with a single click of a mouse one can see all the information about the company. We have also developed systems of tying up with customers to provide, IT support and technological tie up on pre and post sales info. Future of the Textile industry at large: Post quota the Indian Textile Industry is craving for huge opportunity, since the cost is 30-40% cheaper than American and European counterparts. The Indian textile industry has established itself as one in the middle to upper end of the market with its quality products and value added services. We foresee a huge potential for the Indian textile industry in the global scenario."

"The Indian textile industry needs to attract aggressive foreign investment in the entire textile value chain from not only in companies in US and EU, but also from Korea, Taiwan and China. Indian companies should upgrade its textile machinery infrastructure to compete globally and the government has to help the industry in rationalizing the tax structures for sourcing textile equipments. Apart from this, Indian companies should acquire international home furnishing/clothing brands aimed at attracting retail business or set up joint marketing companies in major countries in order to corner a higher share of the market."

The company has set itself an aggressive target of a sustainable growth of 30-40% pa over the next 3-5yrs. This would be made possible by expansion projects and moving up in the value chain.

Continuous growth of business operations vertically and horizontally in the home textile segment is something we are looking at presently.