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Presentation on Welspun India Limited Seizing The Emerging Global Textiles Opportunity Presentation on Welspun India Limited Seizing The Emerging Global Textiles Opportunity

Welspun Group Profile US$ 400 million, engaged in Terry Towels n Largest Terry Towel Welspun Group Profile US$ 400 million, engaged in Terry Towels n Largest Terry Towel producer in Asia Polyester Filament Yarn n One of the largest Specialty Polyester Filament Yarn producer In India Polyester Buttons and Resins n Largest producer of Polyester Buttons in Asia Cotton Yarn n One of the prominent players in India Saw Pipes n One of the largest capacities of Saw Pipes in Asia, outside Japan. Strictly Private & Confidential PAGE 2

WELSPUN INDIA LTD- Overview Ø Asia’s largest and world’s 4 th largest Terry towel WELSPUN INDIA LTD- Overview Ø Asia’s largest and world’s 4 th largest Terry towel producer Ø Current Terry towel capacity : 10, 800 Tons being expanded to 23000 tons Ø Becoming a complete home textile player by addition of bed linen Ø Plant at Vapi Gujarat and Anjar, coastal Gujarat, India Ø Distribution network in 32 countries Ø Exports revenue- 94% of total revenue ( 68% to the US market) Ø Certification: Ø ISO Ø 9002/14001 and SA 8000: 2001 by M/S BVQI Only Indian company to license life-style brand in Home Textiles Ø Nautica for towels in US and Canada Ø Tommy Hilfiger for Home Textiles in India Strictly Private & Confidential PAGE 3

Welspun – Journey to become a Global Home textile Player PAGE 4 Welspun – Journey to become a Global Home textile Player PAGE 4

CIRCA 1994 Ø Polyester yarn manufacturer Ø Turnover was Rs 90 Crs, Net Profit CIRCA 1994 Ø Polyester yarn manufacturer Ø Turnover was Rs 90 Crs, Net Profit of Rs 4 Crs Ø Started Towel Business Ø Challenges: ØTo produce Towel – New Business Line ØTo produce Quality Towel ØTo Export Quality Towel – EOU status ØTo Export Quality Towel to Knowledgeable Matured Market Strictly Private & Confidential PAGE 5

CIRCA 1994 – Cont…. . ØEmphasis on Maximum Production ØQuality improvement at each stage CIRCA 1994 – Cont…. . ØEmphasis on Maximum Production ØQuality improvement at each stage of production ØProduct Analysis based on Customer feed-back ØEmphasis ØFocus on Volume Growth on Sales from the maximum Outlets ØStarted Business through Intermediaries – Exporters, Buying Houses. Strictly Private & Confidential PAGE 6

CIRCA 1999 ØProduced ØExported Quality Towels ØExpanded ØGrew Capacities from 2500 Tons to 7800 CIRCA 1999 ØProduced ØExported Quality Towels ØExpanded ØGrew Capacities from 2500 Tons to 7800 Tons in Volume and Value Terms ØEmerged as largest Exporter of Towels from India ØTurnover – Rs 325 Crs – significant for Towel Co ØProfit after Tax of Rs (31. 5 Crs) Strictly Private & Confidential PAGE 7

CIRCA 1999 - Cont…. . ØExternal Dependence- All Business through Intermediaries ØPresence ØFocus in CIRCA 1999 - Cont…. . ØExternal Dependence- All Business through Intermediaries ØPresence ØFocus in Generic Products – Yarn and Plain Dyed Towels on Sales rather than Marketing ØLimited Designing Efforts ØLimited Processing capabilities – right color/right shade/right mix was a challenge ØFinancial ØIn Crunch nut shell Innovation was a missing Link Strictly Private & Confidential PAGE 8

CIRCA 2000 - Putting heads together for a New Beginning PAGE 9 CIRCA 2000 - Putting heads together for a New Beginning PAGE 9

Strategy ØAdopted Vision to become a Truly Global Player and communicate to all our Strategy ØAdopted Vision to become a Truly Global Player and communicate to all our employees ØBreaking the midriff - middle-men/agents from the business cycle – Jettisoning Extra Baggage ØDirect Relationships even at the cost of dip in sales ØDecided to invest in Product Developments and Design Capabilities ØIn Essence Adopted Innovation in entire Business Operation Product, Processes, Practices and People Strictly Private & Confidential PAGE 10

Innovation In Products ØParadigm shift from USE to COLLECTION range of products ØNew Value Innovation In Products ØParadigm shift from USE to COLLECTION range of products ØNew Value added product lines – Egyptian Cotton, Embroidery, Supima (American Cotton), Kid Centric Towels. ØExperimented ØNew with different inputs like PVA fibers Product development – Hygro Cotton – Zero-twist – Subslistatic Printed – Blister Pile Towels Ø Developed new shades and floral prints that are trendy and inline with the Fashion Industry Strictly Private & Confidential PAGE 11

Innovation In Processes ØProcess House: Fully Atomized color mixing ØDesign Innovation Developed new Designs Innovation In Processes ØProcess House: Fully Atomized color mixing ØDesign Innovation Developed new Designs by creating one of the best Home textile designing team Design Studios Design house in India - 5 people 2 designers each in US and UK Appointed World class Designer from the Industry Strictly Private & Confidential PAGE 12

Innovation In Processes Innovation in Sales and Marketing Processes ØSelection of Right Business Partners Innovation In Processes Innovation in Sales and Marketing Processes ØSelection of Right Business Partners ØCreated Marketing Infrastructure Ø Sales team in US Ø 6000 sq. ft. exclusive showroom in New York ØDistribution alliance in the US for distribution and warehousing Ø Created Welspun USA - 100% subsidiary to handle customers directly Product Development skills complimented by Global Sales Network Strictly Private & Confidential PAGE 13

Innovation In Practices ØUtilizing –EDI IT as Integrator & RFID in Welspun USA –Integration Innovation In Practices ØUtilizing –EDI IT as Integrator & RFID in Welspun USA –Integration with Customers –Electronic Coloring and Design Matching which integrates Product Design & Development –SAP R/3 - Integrates Operations, Marketing and Supply Chain –Reverse Auction Strictly Private & Confidential PAGE 14

Innovation In Practices ØMarket Intelligence : Conducted Grid analysis of top retailers with respect Innovation In Practices ØMarket Intelligence : Conducted Grid analysis of top retailers with respect to: • • Product range, Fast Moving Items best selling SKUs Profit margin expectation Collection of Samples to understand global developments Strictly Private & Confidential PAGE 15

People Ø Paradigm shift in Mindset from Manufacturer to Marketer. ØAdequate Training in SAP People Ø Paradigm shift in Mindset from Manufacturer to Marketer. ØAdequate Training in SAP enabled Production and Operations ØAppointed International Textile consultant to improve skill sets of employees ØAppointed Experienced and result oriented people from the Industry. ØPerformance based Reward system Strictly Private & Confidential PAGE 16

YEAR 2004 - Revisited Strictly Private & Confidential PAGE 17 YEAR 2004 - Revisited Strictly Private & Confidential PAGE 17

Product wise sales – in terms of % (based on ex-mill values) The proportion Product wise sales – in terms of % (based on ex-mill values) The proportion of the value added products has increased Strictly Private & Confidential PAGE 18

Progress in Value Chain Value Creation Choose & Pick amongst Retailers Direct Export Marketing Progress in Value Chain Value Creation Choose & Pick amongst Retailers Direct Export Marketing & Outsourcing High end products Branding Indirect Export ‘ 95 2000 Strictly Private & Confidential 2003 2004 2005 Time PAGE 19

Customer Relationship ØLong standing relationship with 12 out of 20 top retailers in the Customer Relationship ØLong standing relationship with 12 out of 20 top retailers in the world ØCustomer centric Planning and Production mechanism BETTERNWELT MITSUKOSH Strictly Private & Confidential PAGE 20

Value Chain contribution Retail Price Expansion 2 x + 13 -15% + 5 -7% Value Chain contribution Retail Price Expansion 2 x + 13 -15% + 5 -7% x Tommy Hilfiger, Nautica, Polo Ralph Lauren, DKNY, Designer Brands Calvin Klein Department Stores Specialty Stores May&Co, Federated, Dillard’s BB&B, LNT, Kohl’s Fashion Stores J C Penny, Target, Shopko Mass Merchants Wal-Mart, K Mart, Costco Indirect Business Strictly Private & Confidential 2005 2004 2003 15% 12% 8% 10% 4% 3% 10% 5% 1% 15% 12% 22% 15% 33% 32% 0% 2% 8% PAGE 21

Comparison FY 1999 (Rs. Crs) Particulars FY 2005 (Rs. Crs) 325 Turnover 374 (35) Comparison FY 1999 (Rs. Crs) Particulars FY 2005 (Rs. Crs) 325 Turnover 374 (35) Net Profit 295 41 Market Cap. 800 - FII Holdings 24% 2. 66% Venture Capital & Mutual Funds 32. 19% Strictly Private & Confidential PAGE 22

Global Opportunities PAGE 23 Global Opportunities PAGE 23

Today’s Global market place Ø Quota phase out – An additional market of $ Today’s Global market place Ø Quota phase out – An additional market of $ 1. 25 bn in Towel and $ 1. 75 bn in bed linen Segment alone Ø Shrinking supplier base released Pillowtex - bankruptcy - $ 450 mn of towel and $ 220 mn of bed linen supply. WPS - Chapter 11 – $ 455 mn of towels and $ 580 mn of bed linen supply. Ø Lucrative European market of $ 600 mn with shrinkage of supplier base. Ø Australian and New Zealand market of $ 50 mn – Dropping duties – 25 to 17. 5%, rendering there capacities idle Ø Increased domestic demand – Few organized player in the home arena to cater to the market Low interest rates and higher disposable income Strictly Private & Confidential PAGE 24

Key Differentiators Strictly Private & Confidential PAGE 25 Key Differentiators Strictly Private & Confidential PAGE 25

Success Algorithm Ø Textiles has been forecasted as another BPO success story, what Y Success Algorithm Ø Textiles has been forecasted as another BPO success story, what Y 2 K did for IT , Y 2 K 5 could do for Textile Industry Mantra For Success as followed by Infoys - ØP: Profitability ØS: Scalability ØP: Predictability ØD: Dependability Strictly Private & Confidential PAGE 26

Vision 2005 and Beyond Strictly Private & Confidential PAGE 27 Vision 2005 and Beyond Strictly Private & Confidential PAGE 27

Innovation in 2005 and beyond Ø Products: Continuous Innovations in Products- Bamboo Filaments, Hollow Innovation in 2005 and beyond Ø Products: Continuous Innovations in Products- Bamboo Filaments, Hollow Yarn, Natural Towels ØNew Business Lines like Bed Linen ØProcesses: Automatic Recipe matching – Orgatex, Automated Operations like Cut and Sew. ØPractices: Patenting of New products to Create differentiators. ØPeople: Knowledge Management, Six Sigma and ESOPs Strictly Private & Confidential PAGE 28

Vision – This is what we are aiming at……………. • Fully integrated textile company Vision – This is what we are aiming at……………. • Fully integrated textile company 4 Fs - from farming to factory to fashion to foreign retailing • Organic and inorganic initiatives to target Growth • Preferred partner in Home Textiles for any global initiative. • Leader in embracing new technologies, product innovation, market intelligence - to offer competitive endto-end solutions to our customers. • Among top three home textile companies in the world. • Market leader in Indian home textile market. Strictly Private & Confidential PAGE 29

RECOGNITIONS National Export Award for outstanding performance from Government of India, for the year RECOGNITIONS National Export Award for outstanding performance from Government of India, for the year 1996 -97 Texprocil* gold trophy for outstanding export performance for successive three years (1999 -00, 2000 -01 & 2001 -02) Best Global Vendor by Wal-Mart in 2002 for Terry towel Vendor of the year , FY 2002 by Shopko Stores Inc. , USA for all its product categories Operational Excellence Award by JC Penney Stores, USA for Year 2003 Strictly Private & Confidential PAGE 30

WE APPRECIATE YOUR VALUABLE TIME PAGE 31 WE APPRECIATE YOUR VALUABLE TIME PAGE 31