How have oil prices affected polyester yarn business, both in India as well as at the international level?
Pinkesh Jain: Oil prices have been dropping all over the world for almost a year now. But we realise that this price (the current price) is rock-bottom; it can't go lower than this. The market has been improving only of late. The prices of yarn and fibres have been improving a bit. All spinners and manufacturers know that these prices (of crude oil) are the lowest. So, that offers a scope to do better business. Moreover, earlier with the forever-climbing foreign exchange rates, it was difficult to manage imports (of polyester yarn).
You are both a manufacturer and an exporter, and you are into both polyester and cotton yarn. What are the changes that you have been noticing on all these distinct fronts over the last few years?
Pinkesh Jain: Cotton is something that India keeps exporting, both in terms of fabric and yarn. But in case of polyester, we are not so competitive as yet. Excise duties on polyester are still a handicap. Moreover, China exports polyester to India, and also to the rest of the world. It would help if duties are reduced by say 6 per cent or so. This will also help the cotton sector, since a drop in polyester prices will help boost the market for blended yarn as well. In case of cotton yarn, about 65-70 per cent of the exports are made to China. But now, since the Chinese don't find our rates comfortable, we (India as a whole) have been exporting more to other countries like Portugal, Egypt, Turkey, Bangladesh and even Pakistan (particularly yarn of lower counts).
Your website mentions only one foreign partner, that too coincidentally a Chinese company. How has the Chinese downturn affected your business?
Pinkesh Jain: In general, a Chinese downturn always benefits Indian businesses; it never affects adversely. The Chinese export to us (Everflow Petrofils). They are exporting polyester yarn only because India is not competitive. The reason obviously is the higher duties.
Your website also talks a lot about recycled yarn. During times when the talk is about reduce, reuse and recycle, do you think the Indian textiles industry has woken up to the fact that we should be recycling more?
Pinkesh Jain: Around 2009, we started producing recycled spun yarn. We would get the fibre from China and do the spinning here. In the past in India, it was not easy to produce recycled staple fibre for making yarn. Whatever was done was for pillows, soft toys, etc, but not for making yarn. But now the technology has grown in India as well. Now, many big houses have started producing recycled spun yarn. We believe this will grow to around 20 per cent of the market (in polyester). As far as we are concerned, we have even made garments from recycled spun yarn.
How organic are you? Do you have a long term policy of looking at organic textiles?
Pinkesh Jain: Organic textiles are only going to grow. Right now those are on the expensive side. But then, most of our cotton exports are organic.
Your website also talks a lot about going green. How do you maintain sustainability standards across your supply chain?
Pinkesh Jain: When you are supposed to show your certifications (like that for recycling) to your buyers, all standards have to be in any case maintained in the factories. So, all processes too have to be maintained throughout the chain. Second, we are getting eco-friendly recycled yarn, and spinning the same here to get knitted fabrics out of those. Finally, we supply all that with a certificate from the Global Organic Textiles Standard (GOTS) which we got in 2010.
You lay special emphasis on increasing your number of specialised products every year. That means a lot of emphasis on research and development (R&D), besides heavy investments. Could you elaborate on that?
Pinkesh Jain: This year itself, we have launched three brands of specially knitted fabrics. Among those is a knitted denim product called Indigo. Knitteds are better than weaves since those are body-hugging, and comfortable to move around in. The Philcot brand incidentally has been made of recycled yarn. We put in around Rs 5 crore into R&D every year. There are 25 people just in the R&D wing.
What are your main exports markets?
Pinkesh Jain: We are exporting cotton yarn to Portugal, China, Egypt, Turkey and Bangladesh. In case of Portugal, they ask for quality (of double yarns), and we deliver the best. We may soon also be exporting our Venetian Rayon and Indigo fabric brands to European countries.
What about your domestic market?
Pinkesh Jain: We supply our yarn to markets throughout the country. We have nine depots all over India. In all, we manufacture and import around 70 different yarns. We are in fabrics right now. But for sure, within one or two years, we will be in garments as well. As of now, we are trying to understand the market: the local sensibilities, the best price points, and working on R&D too.
So, would you be going in for the denim market first?
Pinkesh Jain: (Laughs) Yes.
What is your turnover like?
Pinkesh Jain: Last fiscal (2014-15), it was around Rs 650 crore. Now we are targeting more than Rs 800 crore (2015-16). About a quarter of our turnover is from exports. If we are able to get into garments, we will surely cross Rs 1,000 crore. We are now trying the best to convert our fabrics into garments.
How are you planning to increase your geographical footprint in the next few years?
Pinkesh Jain: A lot also depends on government policies. If duties are reduced, we will be able to export polyester fabrics as well, especially since costs in China are rising by the day. We will be looking at garmenting, and fabric manufacturing of knitteds, on both the export and domestic fronts.
How has the Make in India initiative helped you, if at all?
Pinkesh Jain: It is only because of the Make in India campaign that our Chinese partner has been thinking of setting up a plant in India, maybe in Gujarat or Maharashtra. One cannot divulge more at the moment because discussions and planning are still going on.
