India's denim king on how he plans to clothe the world

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He has come to be popularly known as India's denim king. Sanjay Lalbhai, Managing Director of Arvind Mills, in a freewheeling interview to CNBC-TV18, spoke about the textile industry, the company's history and its global focus going forward.

Here is a verbatim transcript of an exclusive interview with Sanjay Lalbhai on CNBC-TV18. Also watch the accompanying video.

Q: I could not miss the irony when I was looking at your website. Your forefathers were inspired by the Mahatma in setting up this business in some way. Almost 80 years down the line, you are called the Denim King. Run me through a sense of how this whole transformation happened - inspired by a man who made khaki and you have clothed the whole world in denims?

A: Arvind was formed in 1931. We have been in textiles for more than 100 years so it was started in 1890s. We have been in this business for some many years. My grandfather, Kasturbhai Lalbhai was the person who founded all these companies. We had seven composite textile mills and we were one of the major players in textile. When I joined in 1978, the company was always profitable but unfortunately when I joined the first signs of problems were faced by the entire textile industry. The emergence of power looms had taken place and as a result the composite mills were threatened. So there was no other alternative but to come up with something new, to come up with game changing kind of a strategy and that is when we started thinking in terms of new products, new fabrics which will cloth the world or at least India.

Q: You seem to be on another phase of doing something, which is game changing as far as your group is concerned in the sense that you are looking beyond just being looked at as a denim player so to speak. Do you find it a little disturbing when you are still called denim king or you would much rather be called something else in the next five years?

A: I think we are very happy that we brought this entire lifestyle to this country. Denim as a lifestyle is a very logical product category for India in casual wear. So we are always happy about it.

Q: Is it going well?

 A: It is going very well. Indian markets are growing by 15%. It is around 300 million meters. So around 260 million pair of jeans are been worn every year and growing at 15%.

Q: What about the global market, you have been a big player there as well. In the last one year the kind of trauma we have seen through in the economy of many developed countries is that upset the entire mix of products or the business?

 A: Absolutely. I think in the last year there has been de-growth of 4-5% but things should improve. Now America is coming back. Europe has a little way to go. France and Germany have come back, so we believe that good times will start again and the growth will start coming back as far as denim is concerned.

Q: Normally in a situation when jobs are being lost, when you have a situation of an economic downturn people will normally like to source product from more price competitive markets. To that extent do you think in the last one year people like you have been competitive enough to actually bag more orders there because they are looking at more competitive prices?

A: India has never been able to compete with China and places like Bangladesh because our cost structures have been higher. But because the rupee is devalued to 48-49.50, we have been extremely competitive. This could be a temporary kind of respite. Because as our economy is poised we believe that rupee will strengthen over the next few years. So I do not think it is a sustainable kind of advantage. As of now we are competitive. China has become more expensive. India's devaluation has become much more competitive than China. So all the core business which is 70% of the world business has started coming to India.

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