Welspun: Well Spanned Over The World


O
ver the last few years, Welspun India Ltd. has become one of the top players in the
global markets for home textiles and man-made fibers. During a recent visit to India,

Textile World Asia
met with Updeep Singh, president – Projects & Commercial, who organized a visit to
the Anjar plant as well as an interview with Rajesh R. Mandawewala, joint managing director. Here
is the story.

welspunent

Welspun’s Anjar entrance gate


Impressive Figures

Welspun owns two major production plants in Gujarat province. The first is in
Anjar for producing, finishing and making up towels and bed sheets. The Anjar plant produces cotton
yarns using 73,000 spindles, mainly ring spinning, with some open-end. More than 500 weaving
machines produce 65 metric tons (mt) of terry towels per day and some 100,000 meters of bed
sheeting 340 centimeters (cm) wide. Welspun’s goal is to increase production to 180,000 meters of
bed sheeting per day.

The second plant, the Vappi plant, also produces yarns. Vappi operates 34,000
spindles and rotors producing 50 mt of yarn per day, 80 percent of which is ring-spun. Some 15,000
mt of terry towels per year are produced on 150 weaving machines. All roll goods are converted into
ready-made products. Most of the products are sold under brand names of big customers; 20 percent
of products are sold under Welspun’s own brands — Spaces, Welhome and Umbra.

rajesh

Rajesh R. Madawewala, joint managing director of Welspun India Ltd. 


TW Asia:
When did the company start its activities? Can you tell us some important milestones in
the history of the company?

Mandawewala: Yes, with pleasure. The company was founded in 1986 as a texturizer.
In 1993, we diversified into weaving and started the production of terry towels. Later, in 1996, we
wanted to have our own spinning plant and began spinning. To be more flexible in the man-made fiber
business, we enlarged the production with extruding POY and FDY polyester yarns, as well as
filament and package-dyed. The year 2004 was very important for Welspun, when we further enlarged
the weaving program with bed sheets. We enlarged again in 2007 with comforters.


TW Asia
: This is quite a large production portfolio. You are today active in spinning, weaving,
finishing and making-up. What is the idea behind this large production program?

Mandawewala: The basic idea is to sell all our products directly to retail. To
control the quality along the production chain, it was necessary to diversify in all these sectors.
Seventy-five percent of all goods are our own production, and in weaving it is 90 percent.


TW Asia
: Big retailers around the world are the most important target groups for the company. Do
you have any other markets in mind?

Mandawewala: Yes, the big global retailers are our customers, such as Wal-Mart,
JCPenney, IKEA, Christy and Marks & Spencer. Now we want to enlarge this market into the
contract business for hotels and institutional customers, for example.


TW Asia
: Is there any area where you think the company is in a leading position?

Mandawewala: It is our group’s philosophy to play in the premier league of every
sector we’re working in. In all areas, we are in the top four. In towels we are second, and in
sheets second to third.


TW Asia
: In 2006, Welspun was awarded the prize of “Outstanding Textile Exporter of the Year
2006-07” by CNBC TV 18s International Trade Awards. How does it feel to be awarded this prize?

Mandawewala: It’s a big satisfaction for all of us. This is a special reward for
all our endeavors to be a top player.


The Person, The Job


TW Asia
: Mr. Mandawewala, who are you?

Mandawewala: Oh, I’m 45, married, two boys, 16 and 20, and a studied economist.
Together with my cousin, B.K. Goenka, vice chairman and managing director of Welspun, we are the
fifth generation of the owner family and are leading the company.


TW Asia
: As the joint managing director of Welspun you must be quite a busy man. Is there any
time left for a hobby? Do you have any hobbies?

Mandawewala: Yes, of course. In spite of working six days a week, I try to spend
as much time as possible with my family. Like every Indian, I love cricket very much, and
traveling. Traveling is a perfect blend of business and hobby.

goenka

B.K. Goenka, vice chairman and managing director, Welspun


Research And Development


TW Asia:
Welspun is getting bigger and bigger. How do you manage new products? Is research and
development an important part of your success?

Mandawewala: This is a very important question. R&D is of extreme importance
for our company. We conduct a lot of market studies so that we are able to follow the markets. We
have to produce what the customers are requiring, and all these activities and many more are not
possible without extensive R&D work. The outcome is that we are seen in the markets to be an
innovative company.


TW Asia
: Do you develop any of your own products?

Mandawewala: Yes, one of our recent and successful developments is the “Hygro
cotton.” This is our own cotton treatment designed to improve the characteristics of terry
towels.

Since 2004, Welspun has invested US$400 million. According to Mandawewala,
there is another US$300 million in the pipeline. However, the whole plan is to invest US$1
billion.

welspunrieter

Welspun’s Anjar spinning plant produces cotton yarns using 73,000 spindles, mainly
ring-spinning, with some open-end.


The Markets


TW Asia
: What percentage of your business is represented by exports?

Mandawewala: In 2004, 97 percent of Welspun product was exported. Today, it is
some 90 percent. We made a lot of effort to increase the domestic share. The aim is to have a
domestic percentage of 20 percent by the year 2010.

The export sales are mostly done by Welspun’s own worldwide employees, except
in France, Italy and Turkey. This is very important according to the company’s philosophy.


TW Asia
: And how do you view the actual market situation?

Mandawewala: The markets are polarizing and shifting from Europe to Asia. There is
much less production in Europe, and limited manufacturing is left in the United States. This shift
started 15 years ago, and accelerated heavily in 2004. We think that the move will stop by the end
of 2008, then we will see a consolidation of the markets.

We see another big trend: Customers want to work more and more with fewer, but
bigger suppliers. Small to medium-sized businesses are facing more problems than ever to survive.
Being a big supplier is a great advantage — we are closer to the customers, especially with
cut-and-sew, and we want and are able to be a solutions provider. The markets want solutions, and
not only products. This is good for us, because our customers know our commitment to growing in all
directions. This will bring us even more business in the future.


TW Asia
: Welspun’s figures last year confirm this trend. Turnover for the fiscal year that ended
March 31, 2007, was 9,735.61 million rupees compared to 6,537.34 last year. What are the main
reasons for such a big step in only 12 months?

Mandawewala: In addition to what I’ve said before, is the reason that from 2004
onwards the quotas were abolished. From that time, we were able to become a true global player. Our
target by 2010 is to be one of the three biggest players in home textiles. In terry towels alone,
we increased the turnover from US$75 million in 2004 to US$335 million in 2007.


TW Asia
: How do you see India’s importance in the world market in general, and for textiles in
particular?

Mandawewala: We have well-educated people full of strong will to go to the top,
the English language and a democratic system. Apart from the strong rupee, we have all the
advantages of an emerging country. Due to the weak US dollar, we are trying at the moment to
invoice more and more in Indian rupees to cover the loss in dollars.

In textiles, we are number two as cotton growers, and with an improved yield
over the coming years, we will become even stronger. At the moment, India is holding 4 percent of
the global textile trade and has a 15-percent market share in home textiles. In 2015, experts
forecast a 6-percent market share for India in the global textile market with some US$50 billion in
turnover.


TW Asia
: Are there any weak points for India?

Mandawewala: Not really. As an industrialized country, we must be
solutions-oriented, having more time for marketing and product development as well as sales. We are
forced to help customers — they need small stocks, a higher level of quality — and India is able to
do that. Decades ago, Western people bought Indian companies, now it’s the other way around.

welspunweaving

At Anjar, more than 500 weaving machines produce 65 metric tons of terry towels and some
100,000 meters of bed sheeting per day.


The Future


TW Asia
: If you compare today’s market requirements with those of 10 years ago, what are the
biggest differences?

Mandawewala: Certainly that we are selling much more today to bigger customers.
There are fewer customers than 10 years ago, and many products became commodities. Ten years ago,
the cost of a towel was 40-percent higher than today. In the retail trade, it is more and more
difficult to diversify from the competition. On the other side, the whole industry is having many
more opportunities thanks to better machinery.


TW Asia
: And how do you see the global markets over the next few years from an Indian
perspective?

Mandawewala: The pace will slow down compared to the last 10 years. Quite recently
it was enough to be a “good producer.” These times are gone; everything will be consolidated among
the whole production chain. In each industry, and now in textiles too, we will experience global
consolidation in the marketplace. Big companies will get bigger, and smaller ones will
disappear.

Mandawewala is convinced that India, Pakistan and China will further grow and
strengthen their positions, mainly in the textile marketplace.


TW Asia
: Is there anything that should change in the future?

Mandawewala: Well, we have to strictly follow our company philosophy. Up to 2004,
we showed our products to the customer and asked, “Do you want this or that?” This changed 100
percent: We are producing commodities — not in real terms, but from the amount of products, it is
so.

p21


New Sectors To Be Discovered


TW Asia
: We’ve heard that you are planning to invest in technical textiles and nonwovens. Why is
that so?

Mandawewala: We are always searching for new opportunities. Technical textile
applications are endless; we only see the tip of the iceberg. This is very attractive, and it is
promising new business.


TW Asia
: You generate 60 percent of your turnover in the United States, and 20 percent in Great
Britain. What are the reasons for that?

Mandawewala: The United States and Europe are consuming 70 percent of the world
consumption for our kind of products. We are where the markets are. If you are close to the
existing markets, you have a moment to watch the markets, and this is what we are doing all the
time.


TW Asia
: You are a considered to be the market leader in your business. From your point of view,
what are reasons for that, and what do you want to do to keep this position?

Mandawewala: We are not the market leader, but we are in the top positions. In the
future, we don’t want to be a textile manufacturer. We want to be different. If we become even more
customer-oriented, we can further enhance our market position and stay in the business for quite a
long time.

January/February 2008

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