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| Issue date:01/04/2007 |
| ATA Journal for Asia on Textile & Apparel - Apr 2007 Issue |
| Source:Journal for Asia on Textile & Apparel |
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| The Arisht Spinning Mill plant in Baddi, Himachal Pradesh state |
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Vardhman Group of companies is a major integrated textile producer in India. The group was set up in 1965 at Ludhiana, northern India. It recorded a turnover of Rs2210 crores (about US$ 500 million) in financial year 2005-06. The group's portfolio includes manufacturing and marketing of yarns, fabrics, sewing threads, fiber and alloy steel.
Over the past 15 years, the group has expanded manifold and is one of the largest enterprises in the Indian textile industry with activities in different sectors.
Vertical expansion
In 1982, Vardhman commenced the production of sewing threads and is currently the second largest Indian manufacturer in this segment. A further diversification took place in 1990 with weaving — by building a production facility in Baddi (Himachal Pradesh) with a daily capacity of 150,000 meters to supply poplin, shirt and trouser fabrics. The group later created the Auro Textiles finishing operation in Baddi to further expand vertically. The operation currently has a capacity of 160,000 meters per day.
Activities of Vardhman Group in different sectors |
The company expanded from yarn production to downstream activities in the 1990s. In 1994, the company entered the dyeing market by setting up a fully integrated dyehouse for fibers, yarns and tops. The capacity has been continually raised to its present level of 27,000kg of yarns and 22,000kg of fibers per day.
A joint venture, Vardhman Acrylics Ltd in Bharuch, Gujarat, was founded with the Japanese companies — Marubeni and Exlan in 1999. The joint venture provides the raw materials for acrylic fiber production to tap the domestic market of India, as well as to meet the strong demand from Japan, Hong Kong, Korea, the UK and other EU countries. The group's stress on quality was underlined by the accreditation according to ISO 9002/ ISO 14002 in 1999; Vardhman was the first Indian company of this category to receive the certificate.
Today, the Vardhman Group comprises the following companies.
Listed companies:
Vardhman Textiles Ltd [VTXL] (formerly Mahavir Spinning Mills Ltd)
Vardhman Acrylics Ltd (VAL)
Vardhman Holdings Ltd [VHL] (formerly Vardhman Spinning & General Mills Ltd)
Unlisted companies:
VMT Spinning Company Ltd (VMT)
Vardhman Threads Ltd (VTL)
Recently, the group has slightly reorganized the corporate structure. Early this March, it approved a proposal for setting up a separate unit for sewing threads business, now under Vardhman Threads Ltd, which comprises thread units located at Hoshiarpur and Ludhiana (Punjab), Perundurai (Tamil Nadu) and the spinning unit at Hoshiarpur.
One of the largest textile operations in India
The Vardhman Group has the largest spinning capacity in the country and is the biggest producer of cotton, synthetic fiber and mixed yarns, as well as a giant dyer of fibers and yarns. The group is also one of India's biggest exporters of cotton yarns, the Indian hand knitting yarn market leader and the second largest producer of sewing threads.
Annual fiber consumption by Vardhman |
Currently, the total consolidated sales turnover amount to around US$500 million a year and some 20% of all yarns are exported to countries such as the US, the EU, Canada, China, Japan, Korea, Mexico and Brazil. Vardhman has a 6% share of Indian yarn exports.
SP Oswal, the chairman of the Vardhman Group commented, "We are well established in the market and cotton yarns are selling well. At the moment, we are operating with 550,000 spindles, which we intend to increase to 800,000 by March 2008. India is a good market for us and there are relatively few yarn imports. The market is sure to grow further, but is set to become somewhat quieter."
SP Oswal, chairman of Vardhman, said Indian yarns had established excellent reputation |
Mr Oswal is optimistic with the Indian market. "India has to raise its yields. Today, with around 9 million hectares under cultivation, yield currently amounts to 470 kg/ha, while good yield amounts to some 700 kg/ha. We aim at being the top player in the cotton field and we are optimistic, given that there is a huge domestic market and the per capita income is rising among the Indian population. In addition, the share of exports in the Indian textile industry only amounts to 35% and there is tangible potential for expansion, too. It also explains in part why investment in the Indian textile industry is constantly increasing," he said.
Addressing the quality of cotton produced in India, Mr Oswal was pleased that Indian yarns have established an excellent reputation. Cotton standards have improved and gained acceptance in overseas markets, especially among neighbouring countries in Asia, such as Pakistan. Indian ginners now also offer organic cotton. However, the major challenge lies in contamination, though the country is working to reduce soiling.
Mr Oswal said, "We offer finer yarn counts than a decade ago in a range from Ne50/1 to Ne 100/1 and Ne 200/1. Gassed or mercerised yarns are today essential to survival in the international market. For Vardhman, it would be impossible to attain this market position without qualified personnel and that is what we have. I would say that 10 years ago, machinery formed 90% of the production. Today, I believe the human factor accounts for 70% and this is why we have a positive image among our customers." To date, the Vardhman Group has a total workforce of 19,000 employees.
Looking ahead
Talking about the company's future development, Mr Oswal said: "I do not expect further strong growth in yarn trading except in the domestic market, and therefore, we must attempt to export more clothing. In addition, we must ask ourselves if we should import yarns from China, because today they make up 15-20% of the market."
Meanwhile, the group continues to invest in capacity. In 2005, its sales amounted to around US$500 million and its target for 2012 is US$1 billion. The number of spindles will be increased (mentioned earlier), and so as looms in the weaving mills from 432 to 800 units. The group projects that domestic sales in India will be rising continually by 9% per year.
Source: Xorella AG
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| Copyright © Adsale Publishing Limited. Any party needs to reprint any part of the content should get the written approval from Adsale Publishing Ltd and quote the source "ATA Journal for Asia on Textile & Apparel", Adsale Textile English Website - www.AdsaleATA.com. We reserve the right to take legal action against any party who reprints any part of this article without acknowledgement. For enquiry, please contact Editorial Department. |
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| Copyright © Adsale Publishing Limited. Any party needs to reprint any part of the content should get the written approval from Adsale Publishing Ltd and quote the source "ATA Journal for Asia on Textile & Apparel", Adsale Textile English Website - www.AdsaleATA.com. We reserve the right to take legal action against any party who reprints any part of this article without acknowledgement. For enquiry, please contact Editorial Department. |
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