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It gives me immense pleasure to present the annual report for year under review for RSWM Ltd.
RSWM Ltd. is an integral part of LNJ Bhilwara Group. We are a leading textile manufacturing company that deals in three business segments, namely, yarn, denim, and fabric.
To begin with let me present you highlights for the year 2017-18. The global 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 high tariff for products imported from China, quantitative tightening adopted by various countries, and rise in crude oil prices. It is expected that this growth in global economy will be driven more by the emerging markets and developing economies like China, India, and Euro Area than by advanced economies like UK and USA.
The Indian economy which experienced a cyclical trend growing at a rate of 6.7% in 2017-18. During the year, Indian economy was driven by various reforms such as the Make in India and the new tax regime, GST. The new indirect tax, GST that was introduced during the 2nd quarter of the year brought with it numerous challenges for the Indian industries. Textile industry was one of those industries that was hit the most first by demonetization and then by GST. With easing out of the effects of these reforms the country is expected to grow at 7.5% in 2018-19.
It is expected that in coming years the Indian economy will grow to be a worth $5 trillion economy.
Over the years, the textile industry has witnessed changes in consumption patterns which required the players like us to focus more towards value added products. China is one of the dominant players in the textile industry, but with lower labour and production costs, India is emerging to be the top player in textile industry all over the world. Indian textile industry is the third largest textile exporter of world with a value of $40 billion.
During the year, the textile industry of India faced various challenges, such as volatility in raw material prices, rise in cotton prices due to pink ball worm attack, and GST which made it difficult for the dealers and retailers to adjust with the country''s new tax regime. The Indian textile industry was witnessing a price war along with a tough competition from big players in the market. Despite these challenges, the textile industry is expected to grow with increase in demand from exports side and stabilization in GST.
We at RSWM Ltd., being an organized player were not free from the effects of challenges posed in front of the textile industry. Despite this, we were able to perform better than other players of the industry. We did so by shifting our focus towards production and selling of value added products. In an industry where consumers are demanding more of value added products, shifting towards value creation helped us to retain our market share. We also moved towards a cost rationalization process where we took various measures to reduce our costs in terms of operational costs and raw material costs. During the year, we saw a cost saving of H19.16 Crore. We have also taken various expansion measures by incurring a capital expenditure of H56.55 Crore. We expanded our RCPF plant at Ringus, expansion of Ringus spinning plant and conversion of Kharigram plant from Grey to Dyed spinning.
The global economy as well as the Indian economy is expected to grow in the coming years. The textile industry is expected to experience an increased demand with players of the industry focusing towards value creation as well as cost reduction. In the time forward we have planned to shift our focus of customer base from unorganised customers to Indian and International brands. This is mainly due to the diminishing pattern of local customers. In the coming years, we will also be focusing towards the various expansion activities we have planned to undertake.
I would further like to take this opportunity to thank our stakeholders in being with us in a time where our industry is going through a tough situation. I would like to thank the management and board of directors for their support and coordination. I would also like to thank our shareholders for keeping their faith upon us. I hope that we will receive support from all of you as we keep on moving forward.