Currently, 4-5 percent of its revenues come from the Indian market. This will increase to 20 percent in five years
Prince Mathews Thomas
Welspun India, the world's largest producer of terry towels, is turning its focus on the domestic market as it looks to double its revenues in five years.
"Currently, 4-5 percent of our revenues come from the Indian market. We want to increase this to 20 percent in five years," Chief Financial Officer Altaf Jiwani to Moneycontrol.
Overall, Welspun India wants to double its revenue to $2 billion. "After five years, $400 million will come from India operations," added Jiwani.
The company sells home textile, including rugs, towels and bedsheets, to international retailers. Welpsun also has the Christy's brand, which sells the iconic Wimbledon towels.
While the home textile market in India is worth about $3 billion, the industry is dominated by the unorganised sector.
But Welpsun India is banking on its three-pronged strategy to get a bigger share of the pie.
"We will soon be launching a mass brand," said Jiwani, and added that the brand will hit the market this financial year. "With the launch, we will cover the entire spectrum of the segment, from luxury to mass segments," he added.
Welpsun India currently has a premium brand called Spaces.
The company will expand its network and distribution reach to launch the mass brand.
Welspun India is investing Rs 1,100 crore in setting up a facility in Telangana to produce flooring solutions. The facility will be spread over 27 million square meters. "About 60 percent of the business will be domestic. At its peak utilisation, the facility will generate revenues of up to Rs 2,000 crore a year," said Jiwani. The facility will start operations by December 2019.
The flooring products will be sold under a brand, and will target the Rs 35,000-crore tile market. "Replacing an existing flooring is inconvenient. There are time and cost overruns. But with our flooring products, you can just place them on the existing tile," said Jiwani.
The company spends 1 percent of its revenues on R&D, and this it hopes will get it an edge over rivals. "We have 30 patents, the highest for a home textile player in the world. Also, 37 percent of our revenues come from innovative products," said Jiwani.
The most noted of the patents is the Hygrocotton technology that helps towels occupy less space, thus giving more buck for logistics players (while transporting) and retailers (while displaying products on the shelves). "At the same time, the towels get 15 percent fluffier after wash, thus adding to the comfort value," says Jiwani.
Launched in 2015, the Hygrocotton is now displayed even on private labels sold by major retailers. "It is like our version of Intel Inside... like ingredient branding," says Jiwani.
The company earlier this year launched bedsheets using the same technology. "While the base is small, it is our fastest growing segment. The bedsheets are priced at Rs 4,000, but have got the attention, especially of the millennial population," added Jiwani.
The company is aiming to generate half of its revenues from innovative products in the next five years.
Another pie that Welspun India is targetting is that of advanced textiles. The company generates Rs 200 crore a year from this segment at the moment and wants to increase this to Rs 1,000 crore in five years.
"Through advanced textiles we can get into sectors such as healthcare, auto and railways," said Jiwani.Advanced textile products include use-and-throw bedsheets for Railways, upholstery used in cars and even specialised fabric - developed by the company - to clean satellites.