These include setting up an advisory cell with industryand external experts to guide members to step intointegration, value creation through sustainability ascompetitive advantage and empowering people and unleashingpeople power. The ITFCRISIL Research report on Financial Performance ofthe textile sector for the past four years and the recent ninemonth ended listed company financials show a clear trend ofdifferentiation in margins between Standalone Spinning (Vs)Semi-integrated and Integrated companies
At EBIDTA (Earnings before Interest, Tax, Depreciationand Amortization) is a measure level, there is a cleardifference of 250 to 350 basis points and 500 basis pointsdifference in ROCE (Return on Capital Employed) levels betweenstandalone spinning and integrated semi-integrated companies,ITF convenor Prabhu Dhamodharan said in a release Saturday.
With ITF member base of 87 Lakh spindles, only 20 percent have built Integration as a business model and therefore,it was the right time for standalone spinning companies tomove up the value chain towards the target of making valueadded finished products, he said.
ITF would set up an Advisory Cell with Industry andexternal experts to guide members to step into integrationwith the aim of making high value-added products to improvetheir financial performance, Damodaran said. Spinning Mills are nowadays selling Yarn at 60 days creditdue to a changed credit environment and this integration wouldhelp them use a portion of their own yarn as raw materialinstead of long credit selling.
On value creation through sustainability as competitiveadvantage, he said the Tamil Nadu Textile sector has built allmajor aspects of Sustainability-ZLD processing,efficient watermanagement, waste reduction, maximum usage of green energy inmanufacturing, global benchmark in energy conservation,recycling and circular economy in Textile products. "As an Association,we are driving members towards gettingtheir GreenCo Certification and Higg Index," he said.
ITF has formed a committee with younger generationentrepreneurs to study all positive aspects of the sector andbrand it to position itself as the most sustainable textilecluster of India and would take up more digital strategies toreach Indian and global brands with this theme, he said.
Referring to Financial Restructuring, he said 30 to 40per cent of the members units were facing working capitalissues.
ITF had submitted CRISIL Research report with a largesample size of 1,800 Spinning and RMG companies to theTextiles Ministry and requested for a financial restructuringpackage for needy units.
The Ministry has assured support in taking the issueforward to the Finance Ministry and ITF would focus on thissubject to resolve Working capital issues to turnaround andimprove efficiencies, Damodaran said.
On Empowering People and Unleashing People Power, he saidevery business would still be a peoples business. EmbracingTechnology as a key enbler was crucial for companies in allindustries and economic sectors, but at the end of the day, itis the people that would still make a difference.
ITF, he said, initiated the ITF Leadership Academy tobuild a robust leadership ecosystem in the textile sector andtrained 400 managers, supervisors in the past one year througha 9-month unique program.
After witnessing a great transformation, ITF has decidedto extend the leadership series and was aiming to providetraining on Leadership to 1,000 Managerial and supervisoryemployees from the industry to create more happy workplaces,Damodran said. NVM APRAPR APR