India’s largest manufacturer, exporter of bed-linen and recognised among the top three global bed sheet suppliers to the US, 33-years-old Indo Count Industries Limited (ICIL), Mumbai is working with many big-box retailers like Walmart, Target, Kohl’s, Costco, TJ Maxx, ASDA, The White Company and JCPenney… Overall exporting its products to 50 countries, the company in FY ’21 registered a record volume growth of 26 per cent to 78.2 million metres and its revenue from operations grew on a consolidated basis by 21 per cent to Rs. 2,519 crore while net profit was up by 241 per cent to Rs. 249 crore. Indo Count is growing by around 15 per cent CAGR which is further expected to grow more aggressively as market development is in favour of the industry as well as the company. In an interview with Apparel Resources, CA. Kailash R. Lalpuria, ED and CEO of the company shared the future plans and focus of the company, further directions of the home furnishing market…
With an overall experience of around four decades and expertise in strategic growth, planning of joint ventures, developing the overseas sales team, business development, sales and marketing, Kailash R. Lalpuria is highly optimistic about the future scenario of the home furnishing industry as well as good growth of his company.
“I strongly believe that there is overall good demand and Indian textile sector is well-positioned. Due to work from home, there will be a structural shift as people are spending more time at home and accordingly, some of the product categories will perform better. It will help the industry to grow further. India has a formidable presence and position in the home furnishing industry and buyers are looking at India as an alternative to China,” he says and further adds that to grab these opportunities, Indo Count is already aggressively active on all fronts be its own brands, collaboration on the international front, presence of various retail platforms.
As per him, cotton ban and increasing cost issues in China are also helping India. At the same time, China is focusing on its domestic market. Buyers are also working on the China plus one policy to spread their supply chains elsewhere and India will be gaining due to this.
“The fashion bedding is a category where China has a share of 75 per cent while India has a share of 5 per cent to 6 per cent only. Even if India gets 10 per cent of products like fashion bedding, comforts, quilts, mattresses etc., which are the strength of China, it will be a huge growth opportunity for Indian companies in the next few years,” he says.
Indo Count is focusing on sheet set, fashion bedding which are bound to grow in the next 3-4 years. It is projected that about 30 per cent revenue of the company will be from fashion utility and institutional bedding in the next few years which is currently around 15 per cent. These segments are more margin-driven, so the margin of the company shall also grow.
Overall good demand and better performance are motivating the company to expand, so Indo Count is geared up for brownfield investment capex plan and embarked Rs. 200 crore to increase the bed linen capacity by 20 per cent, adding adequate cut and sew facilities and modernising the existing spinning capacity. “Currently our capacity is 90 million metres per annum and our plan is to increase it to 108 million metres. Around Rs.150 crore will be an investment in the same. This project is expected to complete by FY 2022 and we are expecting that it will add revenue of Rs. 600 crore in two- and-a-half years in our balance sheet,” Kailash says and further adds that as far as product categories are concerned, the company will be focusing on fashion bedding.
Having state-of-the-art manufacturing facilities in Kolhapur (Maharashtra) only from three decades, the company is happy with overall facilities and smooth functioning here. But as other states are also offering very lucrative options, the company is reviewing possibilities to start units in Karnataka, Andhra Pradesh and Telangana, what these states are actually offering and also waiting for National Textile Policy. Accordingly, the company board will take any decision to start new unit.
“As far as a unit in overseas is concerned, India is very well positioned in terms of raw material as well as skilled labour availability. By having manufacturing operations in India, one can easily focus on Indian domestic as well as overseas markets, so we don’t have any reason to expand out of India,” he says.
Coming up with new brands and collaboration
Having 10 in-house developed brands, Indo Count is continuously focusing to add more brands in its portfolio so that it can offer more varieties to the customers. Kailash believes that the company’s established brands are successful and have good recall value but to cater to the customer’s changing demand with new concepts, their growing desire, better functionality… new brands are necessary. “We have recently come up with ‘Wholistic’, ‘Sleep Rx’ and ‘Pure Earth’ in international markets to meet the emerging consumer needs. Our brands have niche and offer value in terms of the target audience, sustainability, design, functionality and price point etc.,” he says. In the domestic market, the company continues to focus on brand and community building for its domestic brand ‘Boutique Living’. The company has also launched ‘Layers’, a new value-driven brand in the Indian market. It recently also collaborated with UK Designer Jasper Conran, focusing on Spring 2022.
R&D is the key for Indo Count
The company has two patents on its name. The first is True Grip® Fit Technology to maintain a snug smooth fit on mattresses ranging from 7 inches to 18 inches in depth. Its patented special stitch combined with the heavy-duty 1 inch thick bottom elastic creates the perfect fit. The second patent is Infinity™, a patented fabric technology that ensures sleep easy in finely crafted sheets, exquisitely designed to last longer, feel softer and keep you cooler than ever. Both patents helped the company to increase its revenue in a good way.
“For continuous R&D, we are associated with Leeds University as our target is to give new experience to our customers. In the future we will have more patents as we are quite inclined towards R&D,” Kailash says.
The company has an edge in being highly sustainable. It has launched ‘GAGAN’ initiative to help farmers cultivate sustainable cotton through BCI and it is geared up to contribute to SDGs and take a greener approach across its value chain. Thanks to the various initiatives of the company, it has been felicitated with the title ‘Giga Guru’ for three consecutive years and recognised as a top performer in the recent Walmart’s Global Sourcing Sustainability Summit. Similarly, with a focus on healthcare and education, its CSR initiatives have touched the lives of 4,00000+ people.
Products that can have strong demand
Kailash strongly believes that in products like sheet sets, fashion utility, towels, toilet linens, kitchen linens, curtain (blackout fabric) comforters, duvet covers, there is a growing focus on health and hygiene. Earlier anti-order, antibacterial, antiviral and breathable products were optional but now these are a must. It is a necessity for retailers to have such products on their shelves.
“Out of US $ 28 billion retail market of home furnishing in US, around 50 per cent is bed linen. Further, in bed linen, there are different categories like utility bedding, fashion bedding, commodity, mattress protectors, comforters, decorative items for bed. So it’s overall a very big category and growing very well,” Kailash avers.
It is also worth mentioning here that Indo Count’s 75 per cent export is into US. The home furnishing market in US is large as well as more organised as the US has bigger homes, people spend there more on home decoration. It’s also in the favour of the company. The company also has a strong presence in UK and has its office, showroom and distribution centre in Manchester, Dubai and Australia.
Next five years for home furnishing industry
Overall home furnishing industry is growing at a rate of 4 per cent which is a good sign. New homes are being made and people are spending more time at home. They are inclined to decorate their home in a much better way. Kailash believes that next 5 years should be tremendous for the industry as demand is growing across the globe as well as in India. With the support of Government, we may get a level playing field to be compared with our competitors like Pakistan. The target of textile export of worth US $ 100 billion in the next 5 years will also give a big push to home furnishing export and this industry will get very substantial growth. He sees growth in China, EU and the Indian domestic market.
“Sleeping bags, tents and tarpaulins, blankets and MMF-based categories are some of the segments where India is still costly than China and has nominal market share. But with the rationalisation of duties and promotion of MMF, India will gain in these categories,” he says.
He also highlights that with US $ 31 billion of home furnishing market, Europe (including UK) is much bigger market than US in this industry. And Indian home furnishing industry has just 5 per cent share in this market. So India has full opportunity to grow in this region.
As the Indian economy is moving towards becoming a US $ 5 trillion economy, it will benefit India’s domestic home furnishing sector also.
Expectation from the Government
Kailash believes that the Government is doing a wonderful job for the industry and it will definitely have good results. “I have never seen such positivity and aggressiveness by Government on various fronts for the textile industry. Our Textile Minister has a strong understanding of global, regional as well as business issues. There is a requirement to have long-term planning like Interest Equalisation Scheme being extended for every 3 months. So there has to be a quicker solution. There should nothing on an assumption basis,” he says and further adds that the 10 per cent Basic Customs Duty (BCD) on imported cotton is also a decision that needs to be relooked as it is hurting the industry and at the same time not benefiting Indian farmers. To grow in export, our country will have to focus on these issues also.
“Every disruption is an opportunity of how we can serve the customer best in every situation. Our vision, strategy, company policy, PD… every step has this in mind always ,so we are doing well and will grow further also,” he concludes.