In a bid to gain higher self-sufficiency in raw material, Mumbai-based textile conglomerate Welspun India plans to enhance cotton and yarn production at its two Gujarat-based plants, and plans to spend over Rs. 10 billion to achieve this during next fiscal year.
Engaging in production of home textiles like bed linen, basic bedding, decorative bedding, terry towels, rugs and bathrobes, Welspun currently operates two production facilities at Vapi and Anjar in Gujarat.
Welspun is pursuing vertical integration and intends to invest about Rs. 7-10 billion for expansion and addition of new spinning and weaving equipments at the two facilities during next fiscal year, Rajesh Mandawewala, Managing Director of the firm, told PTI, Business Line reported.
The company presently produces 40 percent of its overall yarn and fabric requirement on its own, and this proportion would grow to 75 percent post expansion, he said.
The firm also intends to boost its turnover from existing US$ 650 million to US$ 1 billion over the next four years, and is hopeful of achieving this target owing to good performance in the local as well as the global markets, Mr. Mandawewala said.
Further, the entry of multinational retailers in India through foreign direct investment (FDI) route would also help the company in boosting its sales, he added. Welspun produces around 45 million metres of bed linen, 44,000 tons of towels and 10,151 tons of rugs, annually, and exports over 90 percent of the same.
The US alone contributes about 60-65 percent of the firm’s revenues, but the firm is trying to expand in new markets like Canada, Brazil and China. Around 14 percent of the company’s overall revenues for last year came from Europe, which is expected to grow to around 20 percent this year, Welspun MD said.
He added that the European market would grow as big as the US for the firm, if the Free Trade Agreement (FTA) between India and Europe materializes.
