It gives me immense pleasure to present the annual report for yearunder review for RSWM Ltd.
RSWM Ltd. is an integral part of LNJ Bhilwara Group. We are a leadingtextile manufacturing company that deals in three business segments namely yarn denimand fabric.
To begin with let me present you highlights for the year 2017-18. Theglobal economy grew at a rate of 3% in 2017 and it is estimated to grow at 3.1% in 2018.The global economy expanded despite various challenges such as US President imposing hightariff for products imported from China quantitative tightening adopted by variouscountries and rise in crude oil prices. It is expected that this growth in global economywill be driven more by the emerging markets and developing economies like China Indiaand Euro Area than by advanced economies like UK and USA.
The Indian economy which experienced a cyclical trend growing at a rateof 6.7% in 2017-18. During the year Indian economy was driven by various reforms such asthe Make in India and the new tax regime GST. The new indirect tax GST that wasintroduced during the 2nd quarter of the year brought with it numerous challenges for theIndian industries. Textile industry was one of those industries that was hit the mostfirst by demonetization and then by GST. With easing out of the effects of these reformsthe country is expected to grow at 7.5% in 2018-19. It is expected that in coming yearsthe Indian economy will grow to be a worth $5 trillion economy.
Over the years the textile industry has witnessed changes inconsumption patterns which required the players like us to focus more towards value addedproducts. China is one of the dominant players in the textile industry but with lowerlabour and production costs India is emerging to be the top player in textile industryall over the world. Indian textile industry is the third largest textile exporter of worldwith a value of $40 billion.
During the year the textile industry of India faced variouschallenges such as volatility in raw material prices rise in cotton prices due to pinkball worm attack and GST which made it difficult for the dealers and retailers to adjustwith the country's new tax regime. The Indian textile industry was witnessing a pricewar along with a tough competition from big players in the market. Despite thesechallenges the textile industry is expected to grow with increase in demand from exportsside and stabilization in GST.
We at RSWM Ltd. being an organized player were not free from theeffects of challenges posed in front of the textile industry. Despite this we were ableto perform better than other players of the industry. We did so by shifting our focustowards production and selling of value added products. In an industry where consumers aredemanding more of value added products shifting towards value creation helped us toretain our market share. We also moved towards a cost rationalization process where wetook various measures to reduce our costs in terms of operational costs and raw materialcosts. During the year we saw a cost saving of H19.16 Crore. We have also taken variousexpansion measures by incurring a capital expenditure of H56.55 Crore. We expanded ourRCPF plant at Ringus expansion of Ringus spinning plant and conversion of Kharigram plantfrom Grey to Dyed spinning.
The global economy as well as the Indian economy is expected to grow inthe coming years. The textile industry is expected to experience an increased demand withplayers of the industry focusing towards value creation as well as cost reduction. In thetime forward we have planned to shift our focus of customer base from unorganisedcustomers to Indian and International brands. This is mainly due to the diminishingpattern of local customers. In the coming years we will also be focusing towards thevarious expansion activities we have planned to undertake.
I would further like to take this opportunity to thank our stakeholdersin being with us in a time where our industry is going through a tough situation. I wouldlike to thank the management and board of directors for their support and coordination. Iwould also like to thank our shareholders for keeping their faith upon us. I hope that wewill receive support from all of you as we keep on moving forward.
Textile industry was one of those industries that was hit the mostfirst by demonetization and then by GST. With easing out of the effects of these reformsthe country is expected to grow at 7.5% in 2018-19. It is expected that in coming yearsthe Indian economy will grow to be a worth $5 trillion economy.