Gokaldas Exports, an apparel manufacturer and exporter, is investing ₹280 crore over the course of two years to build three new manufacturing facilities in Madhya Pradesh, Tamil Nadu, and Bangladesh. According to Sivaramakrishnan Ganapathi, Executive Vice Chairman, and Managing Director, Gokaldas Exports, the new facilities will add an extra five million pieces annually to the company’s existing yearly production capacity of 30 million pieces.
Financial performance
The company said it has improved its bottom line from incurring a loss of ₹47.23 crore in FY17 to a profit of ₹117 crore in FY22.
“Our company has grown substantially over the last five to six years as a result of a number of factors, including the fact that factory-level margins are higher than corporate-level. The emphasis on operational improvements and the increased focus on value-added pricing have helped us gain better realisation from our customers. With all these factors, we are able to deliver better bottom lines,” explained Ganapathi.
In FY22, the company generated revenues of ₹1,801 crore and expects to have a 25 per cent growth in revenues in FY23.
Factory expansion
Currently, the facility operates 19 manufacturing units. According to Ganapathi, “The Madhya Pradesh facilityspread over 10 acres is being developed in two phases, with the first one to be operational by the first quarter of FY24.” The unit is expected to generate revenues of ₹150–200 crore. By the end of FY24, it would also open its first international factory in Bangladesh to produce ready-made garments, he added.
Gokaldas is investing another ₹100 crore in the construction of a fabric processing facility in Tamil Nadu; the facility “would manufacture 20 tonnes of fabric per day and would be commissioned by Q1 FY24,” he said. Additionally, it annually invests ₹25- 30 crore in the maintenance and modernisation of its facilities.
Apparel exports
According to the MD, “In the next two to three years, India’s apparel export sector will see strong tailwinds. As seen in recent years, China’s share of exports has declined from $193 billion in 2014 to $132 billion in 2020. With higher labour costs and tougher trade restrictions imposed by the US, manufacturing would continue to shift from China to India; As more foreign trade agreements fructify, it will result in increased exports to the European Union as well. This is a great growth opportunity for India’s apparel exports.”