Even as India’s exports continue to fall for nine straight months, declining 21 per cent in August, textiles firm Welspun remains confident of pushing up its global sales. In a conversation with Bloomberg TV India, Welspun Group MD and Vice-Chairman BK Goenka says India is well placed in the textile export market.

Textile constitutes an important component of India’s overall exports. How has Welspun fared in the difficult times?

The overall exports have gone down but in home textiles there is good growth. The primary reason is India is very well placed globally because of the cotton prices, because of the overall policies, and the rupee — the currency is in favour when compared to China and Pakistan, and they have their own issues. So in home textiles, we have not seen any kind of growth issue. Rather, it is positive and the growth is more than 10 per cent.

The big concern after the yuan devaluation is that China will once again capture a lot of ground that Indian exporters held. What is the sense that you are getting?

China’s currency, no doubt, has depreciated 2 per cent and there were a lot of rumours that it will go down further. It’s difficult to answer what they will do but overall I think all other currencies in emerging markets have depreciated much more. So, China’s depreciation of the currency is not going to help their exports to increase. I think the basic reason is they have huge costs, which is going up primarily on the labour front. The main situation for a country like India is that now actually it an be a big textile hub for the global market. India can really grab a big market share.

With about 95 per cent of your production exported, give us a sense of how your exports have grown in your key markets including the US, where a bulk of your produce goes?

We have been growing at a rate of 15-20 per cent. No doubt we have a huge market —we have a huge US market which is contributing almost 60 per cent — but in the last 18 months we have added markets in Japan, the UA and Europe, which is also growing. We see this because of issues that Pakistan, China and Bangladesh are facing in their own countries. India has got into a very good situation, particularly in textiles, and we are getting a much bigger market share than compared to last year.

A couple of years ago, textile players said there was a discernible shift from China to India in terms of textiles because of the labour cost going up there. Is that a continuing phenomenon and is that why business is looking good for you — because the stock market is giving you a big thumbs-up?

Again, textiles is a big field and when we are saying textiles, particularly in cotton products, India is very well placed (a) because of the home grown cotton — today India is the second largest cotton growing country while on the other side China is importing (b) we are very well placed on the labour cost where China is again fighting with and (c) the currency is more or less stable. So having devaluation in a big number is not going to help. At the same time you end up creating confusion in the mind of the customer.

So a stable currency, or let’s say a gradual depreciation, is always helpful for the business.

What is your capex plan for this year in the textiles side?

We have not planned (capex) for this year. We had planned a capex plan 18 months back of around ₹3,000 crore, of which we have completed almost around ₹2,000 crore in the last 18 months. In the next 12 months, we will be spending another ₹1,000 crore. So over all our capex plan will be over in the next 12 months, whereby we will be increasing our towel capacity to almost by 30 per cent, sheet capacity by 40 per cent and rugs capacity by 25 per cent.

Is there a possibility of a retail comeback?

Three years back we were trying to open more and more stores of our own but unfortunately that didn’t do well because of the obvious reason — with one a single product, you can’t have a retail strategy. So we closed down more than 200 stores and we have re-launched our brand called “Spaces” as well as “Well Home” primarily through distributors as well as a shop-in-shop kind of new strategy. I think there is a good response and the domestic market is growing at a good pace.

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