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29 Sep 2020, Edition - 1904, Tuesday

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Coimbatore

Four core focus areas to improve textile sector business performance

Covai Post Network

Coimbatore, Feb 22 : Indian Texpreneus Federation (ITF) an association representing the entire value chain of Textile Manufacturing in Tamil Nadu has decided to focus on four core areas to improve the overall business performance of textile industry as the Mission for 2020 – 21 Financial Year.

The ITF–CRISIL Research report on Financial Performance of Textile Sector for the past 4 years and the recent 9 month ended listed company financials show a clear trend of differentiation in margins between Standalone Spinning (Vs) Semi-integrated and Integrated companies. 

At EBIDTA (Earnings before interest, tax, depreciation and amortization) is a measure level, there is a clear difference of 250 to 350 basis
points; and 500 basis points difference in ROCE (Return on capital employed) levels,between
standalone spinning and integrated semi integrated companies,  ITF convenor, Prabhu Dhamodharan said in a release today

Within ITF member base of 87 Lakh spindles, only 20 per cent have built Integration as a business model and therefore, it was right time for standalone spinning companies to move up the value chain towards the target of making value added finished products, he said. 

ITF shall be setting up an Advisory Cell with Industry and External experts to guide the members to step into integration with the aim of making high value-added products to improve their financial performance.

Spinning Mills are nowadays selling Yarn at 60 days credit due to a changed credit environment; and this integration will help them to use a portion of their own yarn as raw material instead of long credit selling.

Value Creation through Sustainability as Competitive Advantage:
       
Tamil Nadu Textile sector has built all major aspects of Sustainability-ZLD processing, Efficient Water management, Waste reduction, maximum usage of Green Energy in manufacturing, Global benchmark in energy
conservation;recycling & circular economy in Textile products and as an Association,we are driving members towards getting their GreenCo
Certification and Higg Index.

ITF has formed a committee with younger generation entrepreneurs to study all the positive aspects of our sector and brand the sector to position itself as the most Sustainable Textile cluster of India and be taking.up more digital strategies to reach Indian and global brands with this theme.

Financial Restructuring

Thirty to 40 per cent of the members’ units are facing working capital issues and ITF submitted CRISIL Research report with a large sample size of 1,800 Spinning and RMG companies to Ministry of Textiles and requested for Financial restructuring package for the needy units.

Textile Ministry has assured support in taking the issue forward to Ministry of Finance and ITF will focus on this subject to resolve Working capital issues to turnaround and improve efficiencies.

Empowering People and Unleashing People Power

Every Business will still be a People’s Business. Embracing Technology as a key enbler was crucial for companies in all industries and economic sectors; but at the end of the day, it is the people that will still make a difference.

ITF initiated ITF Leadership Academy to build a robust leadership ecosystem in tne textile sector and trained 400 managers, supervisors over the
past one year through a 9-month unique program.

After witnessing a great transformation, ITF has now decided to extend the leadership series and is aiming for training on Leadership to 1,000
Managerial and Supervisory employees from Textile industry to create more happy workplaces,
Prabhu said.  

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