plans capacity addition and wants to move focus from exports to the burgeoning home textiles market even as textile manufacturers continue protests over goods and services tax
Since the GST
was rolled out on July 1, the textile sector has been demanding that the rates and rules be eased for it.
The industry and especially the power loom segment has not been placated by a textile ministry notification that only job workers or units with an annual turnover of Rs 20 lakh or more would need to register for the GST.
However, amid the din, GHCL
has confirmed its plans to solidify its presence in the domestic home furnishings
market. Currently, an overwhelming 85 per cent of its products are exported abroad, mostly to the United States while the rest are sent to domestic market.
But stagnancy in foreign sales growth, booming demand from domestic consumers will change the model, R S Jalan, managing director, said.
India accounts for seven per cent of global home textiles trade. The country has cornered a majority share of the export market in the United States and Britain, contributing two-thirds to their exports.
India's home textile industry
is expected to expand at a compound annual rate of 8.3 per cent during 2014-21 to $8.2 billion in 2021 from $4.7 billion in 2014, according to the India Brand Equity Foundation.
With the industry consolidated among a few players including Bombay Dyeing, Welspun, Alok Industries and the Trident group, among others, other players are increasingly making inroads.
This will only increase since the Rs 6,000-crore textile package announced by the government last year was tweaked later to include the home furnishings
sector as well.
plans to exploit this by first upgrading its spinning mill in Madurai, Tamil Nadu, which can produce yarn. With a total installed capacity of 175,000 spindles and 3,320 rotors, it produces cotton and blended yarns.
The company is banking on this to boost the processing capacity at its Vapi (Gujarat)-based home textiles operations from 36 million metres per year to 48 million metres per year, Jalan added.
Investments in these two areas are expected to drive forward the home textiles' division, which currently accounts for about 20 per cent of the overall bottom line.
However, in the post-production phase, Jalan clarified that they are not going to venture into the retail space, something other companies
are still pursuing. The plan is to leverage wholesale supply to existing partners like Raymonds, Future group, and Bombay Dyeing rather than get into retailing, he added.
The company is also hopeful of bagging orders from foreign entrants into the retail market.
The company posted a standalone revenue of Rs 2,969 crore for the financial year 2016-17, a 8.77 per cent growth over the previous financial year, of which the home textiles business supplied 41 per cent.
"We foresee a good demand in the business in coming years and see a huge demand coming from our existing clients and new clients. We expect improvement in both top line and margin going forward," Jalan added.