Economic Times, India
MUMBAI: Textile manufacturing company, Alok Industries, is planning to tap the growing institutional ready-made garments sector to boost its revenue. With this move, the company will be shifting its focus from the luxury segment to the lucrative mass-market segment that has, so far, clocked at a rate of 15%.
“We started with supplying fabrics to institutions, but we are now entering the ready-made work wear sector,†said chief financial officer of Alok Industries, Sunil Khandelwal. “Institutional garment segment is profitable and the margins are quite high with big volumes of order for our investment. The competition is less here,†he added.
The company plans to finance its latest initiative through grants from the government’s Technology Upgradation Fund. It will set-up a dedicated unit for institutional garments at Silvassa. The company will spend Rs 15 -20 crore in the work-wear segment.
According to Mr Khandelwal, Alok generates Rs 180 crore of sales annually only through institutional garments and fabrics. The company produces 50,000 work wear garments on a monthly basis.
“US and Europe will be losing out on their textile manufacturing base and this share will ultimately come to India and China,†said Mr Khandelwal.
India ranks sixth in the institutional garment sector. While China and Bangladesh are big players in production of institutional garments, the US, Europe, Middle East and India also have a strong demand for this segment. However, Indian textile exporters and manufacturers have suffered the consequences of a bearish US market.
“US and Europe will be losing out on their textile manufacturing base and this share will ultimately come to India and China,†said Mr Khandelwal. India’s contribution to world textile market is expected to increase to 7-8% by 2012 from the current 4%, he added. The company’s shift towards finished garments is, in fact, a relief for exporters who were hit by the appreciating rupee.
US recession and rising input costs have forced many textile companies to look for larger avenues and growth on the local front. Alok has also started in a big way with its retail chain, Home and Apparels. Due to rising inflation, textile companies are targeting the mass market and not the high end buyer of premium products.
Alok has also put off its plan of bringing Peacock Alley, a premium bed linen and bath luxuries line to India for the next two years. “We don’t see the market for premium products in India yet. Organised retailing is taking shape now and the mass market model is the fastest,†said Mr Khandelwal.
