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Welcome to the 26th annual report of your company Kitex Garments Limited.
Kitex business is undergoing a dynamic transition taking the company to the next level. The management is deeply involved in further improving our global advantage. The succeeding few years are going to be very important to our company as we capitalize on the company''s inherent strengths which are primarily our profoundly advanced processes, practices and the way we engage with our customers.
FY17-18 has been a challenging year with respect to our top line and margins.
Revenue from operations grew by 2% on year to year basis. Our margins and performance were adversely impacted due to Increase in raw material costs, Reduction in export Incentives due to GST implementation and further one of our client has filed a petition in the bankruptcy court in USA to wind down its US operations. A motion before the court is pending from suppliers including our company. The company is in the process of recovery of receivables. We consider this as an impact limited to FY18 as the allocated capacity for the client has already been taken up by other clients.
Innovation is our key constituent for increasing our competitive advantage. Despite the unforeseen challenges from the external environment we continue to strengthen our internal operations by upgrading technology, streamlining processes and rationalization of human resources. This is in line with our goal to enhance our capacity by the year 2021. This strategy is also consistent with supplier consolidation trend among major infant garment buyers in our markets. To ensure quality, reliability and for the better co creation of value, many buyers are doing away with multiple suppliers and are consolidating the purchase from large and more dependable partners. Our company being one of the largest infant garment manufacturers in the world is poised to benefit from this trend. The Kitex USA LLC licensed brand “Lamaze” and Own Brand “Little Star” have already started establishing their market presence. The company is providing value added service in the form of design services to its clients.
The global market is abuzz with debates and impact analysis on the recent escalation of trade sanctions between USA and China. In the event of further escalation of this development, global buyers particularly those based in the US may restructure their supply chains and opt for sourcing products from countries other than China. This could create a substantial opportunity for manufacturers in other countries including India. The supplier consolidation trend as well as the Trade war related fallout is already unfolding more opportunities that support growth in the near future as well as long term.
Stepping into FY19 towards the vision of becoming a global player of substance, due attention is being given to our quality processes with focus on health, safety and comfort of Infants - who are end users of our products. Read Page 8 and 10 for more details on our value chain and product stewardship
Corporate Social Responsibility
In our founding principle adding socio economic value is considered as the essential core outcome of doing business. Over the years we have been able to transform lives in Kizhakkambalam Panchayath, where our unit is located, with respect to improving livelihoods, creating housing and public infrastructure, food security programs, education, agriculture and health.
During the year we carried out several social initiatives and took up many new initiatives touching upon Housing, Food Security, Education, Health, Drinking Water and Livelihood. Read Page 14, 15 & 16 for more details.
The Board joins me in expressing our deep appreciation for the interest shown by various stakeholders and this is clearly depicted by the growth in numbers of our Shareholder community from 28000 to 40000 shareholders as on the close of the financial year 2017-18. I take this opportunity to thank our employees, customers, bankers, investor''s suppliers and Government for reposing their trust in the management. We assure you our commitment for continued growth.
Sabu M Jacob
Chairman & Managing Director