Madhu Sudhan Bhageria, Chairman & Managing Director, Filatex India

Our outlook on business prospects is strongly bullish. We firmly believe, it has been all over the world, Polyester yarns are the future growth engines of Indian Textile industry.

Dec 13, 2018 03:12 IST India Infoline News Service

Madhu Sudhan Bhageria, CMD, Filatex India
Madhu Sudhan Bhageria, Chairman & Managing Director, Filatex India, is a first generation entrepreneur with around four decades of experience. Being the promoter and CMD, Madhu has worked his way up from scratch and has hands-on experience of all facets of the business, be it finance, purchase, marketing or manufacturing. A passionate leader with first class communication skills, in depth knowledge of all current economic, social and regulatory issues, he continues to grow his business in polyester yarns and has taken his company amongst top five in the country. Under his leadership, Filatex received the coveted "Fortune India The Next 500" Award 2018 which recognized it as one of the Top Wealth Creators over the last 3 year. He is the President of PTA Users Association (Regd.) and an active member in several other Industry Bodies and Associations. 
 
In an interaction with IIFL’s Mamta Maity, Madhu Sudhan Bhageria, CMD, Filatex India, said “Looking forward, we are buoyant about future prospects of our business and we fervently are looking for opportunities for strengthening and growing our business.”
 
Brief us about Business dynamics of your company  
Filatex India Limited is amongst top five manufacturers of polyester filament yarns. Its product basket covers all ranges of yarns; by variety POY, DTY and FDY in coarse and fine deniers in all shades, be it semi dull or bright or any shades of colour which are dope dyed. The company’s strategy has been focused around growth through value added integration in polyester filaments.
 
Filatex started manufacturing in 1994. First manufacturing plant was set up in Noida. This facility manufactured 500 TPA specialty polyester, nylon, nylon 6, nylon-66, PBT, polypropylene mono filament yarns in technical collaboration with Reifenhauser GmbH of Germany who are pioneers in extrusion technology.
 
In 1996, FIL diversified into high growth area of specialty polyester filament yarns by putting up its second manufacturing facility at Dadra & Nagar Haveli, Silvassa. This facility is a state-of-the-art plant that was imported from Barmag A.G., Germany.
 
From 1996 to 2010, we were adding capacity in Dadra only. In 2008, FIL started producing polyester fully drawn yarn (FDY) using latest state of the art machines from Barmag. In Dadra, we used to buy polyester chips for conversion into yarns. In 1996, our capacity was around 15 tonnes per day which we gradually scaled it up to around 130 tonnes by 2010.
 
In 2009, FIL installed automatic needle looms for manufacture of narrow woven fabric with warping machines. It is primarily used in manufacture of carpets and mostly exported. In 2012, we started the Dahej unit. It was a step towards backward integration where we use basic raw materials to produce polyester melt which is used directly for making chips or spinning yarn. Keeping pace with the technology trends, FIL planned to move from ‘Chips to Yarns” to ‘Melt to Yarns” and set up its own poly-condensation plant of 600 MT/day and 260 MT/day of POY at Dahej Industrial Area, Gujarat. By putting up this unit, the company joined the league of major POY manufacturers. From there 100 tons polyester chips are transferred to Dadra plant for making yarn, thereby strengthening our operations.
 
Subsequently, we carried out two brownfield expansions in Dahej – first one was in 2016, wherein we added around 105 tons of FDY and texturising capacity for 200 tons per day. In 2018, we added bright polymer stream of capacity 300 MT/day along with 190 TPD of FDY and 25 TPD of POY with the latest state-of-the-art technology. Thus our product basket of POY, FDY and DTY covers full range of multi filament yarns in coarse and fine deniers with all options like bright, semi dull, black and all colour shades.
 
As on date, we have a total capacity of 3,28,000 tonnes per annum.
 
Growth Strategy/ Outlook
Our outlook on business prospects is strongly bullish. We firmly believe, it has been all over the world, Polyester yarns are the future growth engines of Indian Textile industry. Indian manufacturers are going to have a good run for atleast a decade. Globally the polyester market has been dominated by China which produces around 80% of the polyester. The second largest is India, at a distant, at 10%. Slowdown in China on account of sharply rising labour costs and paucity of labour will provide opportunity to Indian manufacturers in coming years.
 
Availability of key raw materials PTA and MEG with in the country has also improved the prospects, eliminating the uncertainties of shipments and volatility of prices as well as exchange fluctuations.
 
The company has recently commissioned its expansion of “Bright” yarns which has led to higher profits margins in H1FY 19 and it is expected to perform well in H2FY19 and FY20.
 
Revenue break up
Products Percentage
Polyester/PP POY 22.05%
Polyester FDY 26.26%
Polyester / PP DTY 36.35%
Polyester Chips 10.97%
Narrow Woven Fabrics/ Monofilament Yarns & others 4.37%
Total Revenue from operations (gross) 100.00%
 
Where are your manufacturing facilities located? Do you have any capex plans going forward?
Presently, the Company has two manufacturing facilities, which are at Dahej Industrial Area, Distt Bharuch, Gujarat and Dadra, the UT of Dadra & Nagar Haveli.
 
Looking forward, we are buoyant about future prospects of our business and we fervently are looking for opportunities for strengthening and growing our business. Over the years a vibrant organization has been built that has rich technical experience laced with conviction, courage and vitality which continuously strives for operating excellence.  We have spotted some debottlenecking opportunities in our plant which will help us increase our polymerization capacity from 900 TPD to 1050 TPD. More polymer availability would also create an opportunity to dovetail more of value added products.  Further expansion has been initiated to debottleneck the melt capacity at Dahej. This capex plan will increase polymer capacity from 900 TPD to 1050 TPD, along with addition of POY capacity of 170 TPD and texturizing capacity of 200 TPD at a capital outlay of 275 Crs. Commencement of production is expected by January 2020.
 
Keeping in view of rising cost of power, we are evaluating economics of captive power plant.  Manufacturing of textile filaments is power intensive. The cost of power through the grid in Gujarat has gone up significantly as compared to competitors in the neighbouring state. We have reached an aggregate production capacity wherein our energy consumption is large enough to consider own generation.  Our captive power generation would certainly strengthen our position as well as the margins.
 
To enhance value addition to our wide array of yarns, we are exploring the options for a tie-up with foreign company to produce high value fabrics, that are being imported.  The tie-up could extend to processing, digital printing and garments.
 
Brief us about your geographical presence in India as well as internationally? What is the contributions of exports to the company's total revenue?
The Company has pan India presence with Marketing offices at Mumbai, Surat and New Delhi, The Corporate office is at New Delhi.
 
The Company has expanded its global foot print to about 34 countries and its exports revenues contributes about 20% of total revenue.
 
Who are your peers in the industry? How are you placed vs. peers?
We are one of the most energy efficient and cost competitive producer. Reliance is the leader in this business. Other companies are Bhilosa, Wellknown Polyester, Sanatan Textiles, Subhalaxmi Polyesters, Sumeet Industries. Some of our peers are unlisted companies who have also done well and have better margins, primarily on account of lower electricity cost in their area. Domestic market is growing @ 7-8% and there is adequate space for everyone to stretch out.

We are amongst the top four in terms of capacity utilization and also capacity.

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