SW: We have seen that Vardhman & A&E are working very hard towards sustainability but all this means cost. Do you think that your buyers and suppliers are prepared to share the incurred cost with you?
DL: I think that this commitment on sustainability cannot be valued in terms of cost recovery. This is a commitment to service the customers and give the benefit to the society in the long run for sustainability in perpetuity. First of all no customers or no supplier shares the costs but certainly if you are doing the right thing like sustainability, you can be a preferred supplier. You can get preference from your buyer because ultimately the consumers pay for it. There are indirect advantages that come and it is actually a part of social responsibility; one is not always looking at profitability, it is about the right way of running the business.
SW: What has been the expansion strategy for Vardhman?
DL: We have benefited from our expansion into other states. Initially the focus was only Punjab, but when the political crises in the late 80s compelled us to move to locations outside Punjab, it opened a whole new door of opportunities. Our factories in Himachal Pradesh and Madhya Pradesh were more cost-effective at that time as Himachal Pradesh has huge hydro-electric projects with lower energy cost, while Madhya Pradesh was economical because of availability and economical land prices. The location in Madhya Pradesh had better access to the ports. Our expansion into Gujarat marked the establishment of our acrylic fibre plant and we moved into Tamil Nadu to service customers in the South as it’s a critical market for apparel sewing.
SW: Other than sustainability, which all are the critical areas in your business which need attention?
DL: In the thread business we need to do a lot more on sustainability, the key is how to optimize your cost of manufacturing and cost of social obligation. The need is that we work out the right technology, reduce our water consumption, save on energy consumption, recover as much thermal energy and save on electrical consumption. All costs are going up and energy is the most expensive component today.
Then we have to work on improving the skills and productivity of the people working with us, so that along with improving the skills to produce the right product in the very first time the cost of wastages are reduced. We still have to work a lot in these areas. We have to work harder on seamless supplies with on time deliveries as it is an extra cost on us if we do not deliver on time. It’s more to do with consolidation of our internal systems and processes against any further facility build-up.
SW: Any further expansion plans?
DL: We have created our manufacturing structure in such a manner that even if the demand increases, we will be able to satisfy the same with the present capacity or by marginal addition of certain equipments and machines. There will be some addition in machines for speciality sewing threads or for non apparel sewing applications like filament threads, industrial applications and technical textiles, which is the major focus area for the future.
