The textile and garment export industry is making heavy weather and Morarjee Textiles, a subsidiary of the Ashok Piramal Group, is no exception. But there is light at the end of the tunnel. As the company grapples with a rupee that has played havoc with best-laid plans and increases its focus on expanding its garments export division, Harsh Piramal, executive vice-chairman of Morarjee Textiles, tells Radhika Pancholi his plans for the future. Excerpts:
The rupee has treated textile and garment exporters rather badly…
Yes, but I feel the rupee rise was possibly good for the industry as it forced textile and garment companies to improve their efficiencies. The crisis was a wake-up call and while many units that could not deal with it have closed down, many others, like us, have adapted to the changing scenario by working on improving our business models, our efficiencies and, to a certain extent, cost. For example, at our textile division we plan to change the product mix, rather than expand, through manufacturing very high-end fabric.
What about the garment division?
We have some big plans for this division. In the three years since its inception, we reached a turnover of Rs 85 crore and we plan to double this figure to Rs 160 crore by the end of this financial year. Right now we can produce approximately 4 million units per annum and with an expansion in our capacities, we plan to raise this number to a little over 6 million units per annum. Within five years of inception we are aiming at being counted among the top 10 garment exporters of India.
Are these goals a daunting considering the slow growth?
I agree that growth is slow, but I am confident that we will be able to achieve our goals because we have differentiated our division by building a very good design team that develops designs by working with our customers. This not only builds the confidence of our old customers but also attracts newer ones. Apart from that, we have almost completed our capacity expansion, which will help us to complete our orders faster.
What are your consolidated plans for the year?
In the last financial year (2007-08), we were not profitable. We intend to change that this year with a target revenue of between Rs 250 crore and Rs 300 crore and growth of 30-40 per cent. This growth will be driven by both the fabric business, which we will recover through our new products, and the expansion of the garments unit. In fact, we plan to concentrate on increasing our profitability this year.
What about the domestic market? Many of your competitors are focusing on India in a big way…
We have just exited our retail businesses and do not intend to return to them in any form at the moment. However, as wholesalers, the domestic market makes up for about 30 per cent of our turnover. Our main area for growth comes from exports that are giving a lot of new volumes from markets such as Europe and Japan.