MANAGEMENT DISCUSSION AND ANALYSIS
The global economy began its modest recovery in FY 2013-14. The year initially began
with a noticeable slowdown in the beginning half of the year in emerging markets and
developing economies alike due to a deceleration in demand from advanced economies, the
end of investment booms in some of the major emerging markets and domestic policy
tightening. But due to the resilience of consumer demand, activity stabilised in advanced
economies and picked up in emerging markets towards the end of 2013 thus bringing about
renewed confidence.
The Indian Textile Industry has a stron base of diverse raw materials, encompassing all
the natural, synthetic, and man-made fiber and filament yarns.
MW Unitexx, the textile arm of MW Corp witnessed a robust growth in the Financial Year
2013-2014. Your Company reported a consolidated turnover of INR 1077.13 cr.
MW Unitexx comprises of S.Kumars Limited - a market leader in uniform fabrics in India,
Klopman International – Europe’s largest player Work Wear and Protective Wear
brand and S.Kumars Unimart - the Ready-To-Wear uniforms division, making MW Unitexx the
largest uniforms fabric manufacturer in the world with a combined capacity of more than 70
million meters per annum.
Your Company is poised to witness tremendous growth in the textiles and uniforms market
as MW Unitexx covers the entire gamut of uniform needs, with operations spread across
three continents: Asia, Europe and Africa.
INDUSTRY OVERVIEW
The textile industry provides ample scope for business opportunities by way of textile
tenders, textile public tender notice, textile bids, international textile tender and
global textile tenders. After the exclusion of global quota scheme, the textile industry
is flourishing at high speed. The world is on a new corridor of industrial revolution.
The global demand is expected to reach 30.71 million tons by 2018, growing at a CAGR of
3.3% from 2012 to 2018. Factors such as product durability, advancement in the automotive
industry are some of the factors that would drive the market for textiles and apparel.
However, factors such as high cost of the finished product impacting end users and
fragmentation of the current market are aspects that need to be addressed.
The European Union (EU) textile and clothing market
The European Union market presents a perfect platform for foreign investors to invest
in the textile and clothing sector. The textile sector is slowly but steadily is gaining
importance in new and emerging markets of the third world countries. The use of new
innovative methods to produce textile fibers and many other textile products in different
sectors like medicine, science, architecture, aerospace, transport and automobile have
opened up several avenues for foreign investors to exploit the textile market and cater to
the needs of the market.
European companies provide goods that are fashionable, with a wide array of functions
that are in keeping with the current requirements but that are also equipped with flexible
solutions. This is one of the key reasons for the success seen in the market. Thanks to
the support provided by the European Government as well, the European textiles market has
managed to lead the rest of the global market and measures need to be constantly taken in
order to nurture the textiles and apparel industry and remain active in this ever-changing
global scenario that is defined by multi-dimensional developments and fast changes.
The European market for Work Wear and Protective Wear
The European work-wear market is said to have approximately over 700 work-wear producer
brands. There is now an increasing demand for more stylish and functional as well as
comfortable garments for work-wear thanks to the increase in focus on health and safety.
Companies are also looking to offer a more well-rounded service package in order to bring
about an increase in demand in work-wear seeing as both corporate and employees alike have
become increasingly more concerned with the corporate and personal image. There are more
opportunities in the United Kingdom within the EU as the UK market offers companies that
have already captured a sizeable share of the rest of the EU marked a new platform for
their products.
The EU is also known for its advanced technology and constant innovation in producing
protective-wear fabrics. High tech domains like the military and space sector depend
vastly on the protective-wear market for the supply of fabrics and other customers include
interior textiles for transport materials and buildings, consumer products like
sportswear, garments and industrial and outdoor wear.
The Indian Textile Industry
The Indian textile industry has a significant presence in the economy as well as in the
international textile economy. Its contribution to the Indian economy is manifested in
terms of its contribution to the industrial production, employment generation and foreign
exchange earnings. It contributes 20 percent of industrial production, 9 percent of excise
collections, 18 percent of employment in the industrial sector, nearly 20 percent to the
countrys total export earning and 4 percent to the Gross Domestic Product.
India has emerged as a primary sourcing hub in the liberalized post-quota era,
attracting buyers from all over the globe. This can be seen by a number of reputed houses
having opened their sourcing offices in the country. Retails from around the globe are
exploring options to increase their sourcing from the Indian markets and Indian
manufacturers are also increasing their capacities to meet with this increase in demand.
Thanks to the support of the Government, the textile industry in India is slated for
continued growth and expansion as a result of these new global developments.
The Government has been continually supporting the textiles exports sector through
various policy initiatives to enable the sector to increase market share in the global
textiles markets. The Government has introduced several types of export promotion measures
in the Union Budget 2013-14 as well as through schemes of Foreign Trade Policy 2009-14,
including incentives under Focus Market Scheme and Focus Product Scheme; enhancing the
coverage of Market Linked Focus Product Scheme for textile products and extension of
Market Linked Focus Product Scheme etc to increase India’s share in various
countries.
The Work Wear Market in India
India in increasingly becoming a significant player in the world economy and is
witnessing a rise in employment figures in the organised sector. The work-wear market in
India has a lot of potential to increase in leaps and bounds despite the consumption of
work-wear in the country being low. The identification of branding and uniforms as being
necessary for businesses has enabled growth in the segment. Thanks to these new
developments, the future of the work-wear segment in the country is certainly bright.
However, in order for the business to become more well-defined, the work-wear industry
needs to become more modernized and be more technology driven, offering innovations such
as stain-free, anti-creasing, and fire-resistant products to make them more functional and
in order to increase the need for work-wear in the country. Also, promotional events are a
huge opportunity to players in the work-wear segment.
Workers employed in the manufacturing sectors and other allied industries such as
automobile, construction, oil and gas etc. are becoming aware of occupational hazards and,
thanks to the importance of Social Compliance as well, companies are developing a safe
working environment. Vendors are required to meet international safety requirements as
prescribed by buyers. This, together with the growing importance of building a strong
corporate identity has increased the demand for basic work-wear and protective-wear.
The Uniforms Market in India
There seems to be an increasing focus in the uniforms sector, as people are becoming
increasingly aware of the importance of uniforms as a branding tool. Mental attitudes and
financial issues associated with uniforms are being done away with which is what is
leading to a mass growth in the sector. A change in the cultural scene, education and
globalization are some of the important factors responsible for this. While the earlier
view was that uniforms were something that were forced upon people, modernization of the
types of uniforms and a wide range of fabrics, colours and designs is what is leading to a
change in perception.
Also, most industries, some of which have numerous branches all around the country have
incorporated the use of uniforms in their daily workings as a form of branding which is
what has led to an increase in demand in uniforms.
Opportunities and Threats
The biggest threat for the School Uniforms Market would be the huge unorganized market.
Unorganised players tend to enjoy a relatively higher profit margin compared to their
organised counterparts as there are still a lot of foundation stones that need to be set
by organised players to create a robust school uniforms network. One of the main
challenges that remain would also be the inferior quality of uniforms available and
unbranded fabrics used for the same. There also needs to be more government initiatives to
be able to build the organised school uniforms market in the country. Also, the importance
of using branded material to produce school uniforms also needs to be emphasized at all
levels.
BUSINESS OVERVIEW AND GROWTH PLANS
MW Unitexx was formed in 2011 out of the merger of three textile entities S.Kumars
Ltd., the leading 64 year old leading textile brand, S.Kumars Unimart, the Ready-to-Wear
uniforms division and Klopman International. The total combined production capacity is 70
million meters per annum, making MW Unitexx the largest uniform fabrics manufacturer in
the world. MW Unitexx is the textile arm of MW Corp, a diversified business conglomerate
with interests in Hydro-power, Textiles, Renewable Energy and Infrastructure Development.
MW Unitexx, with its end-to-end range of products and services, successfully covers the
entire gamut of the uniforms market, thereby providing ‘Total Uniform
Solutions’.
S.Kumars Ltd. –
S.Kumars, a household name in India, is synonymous with the term, ‘Value for
Money’ and is a market leader in uniforms. A front runner in the manufacturing and
marketing a range of textile products and with a production capacity of 20 million metres
per annum, S.Kumars Ltd. has an extensive retail network across the country comprising of
over 200 dealers.
Thanks to the newly modernized spinning unit at Pithampur and the weaving, processing
and finishing unit at Dewas, S. Kumars covers all fabric requirements of the uniforms
market, with a wide variety of fabrics that include work-wear fabrics, uniform fabrics,
corporate-wear fabrics and fabrics with special finishes. The fabrics include poly-viscose
suitings and shirtings, polyester cotton suitings and shirtings, polyester-viscose denim
suitings and fancy fibre dyed suitings and shirtings in checks and stripes.
Klopman International –
Klopman International, Europes No.1 Work Wear and Protective Wear brand with over 30%
market share in Blue Work Wear, over 70% market share in Rental and Laundry and a
significant market share in healthcare and food processing. Klopman is the largest
European manufacturer (50 million meters per annum capacity) of Work-Wear fabrics
(poly-cotton, polyester and cotton) and Protective Wear fabrics (fire retardant, chemical
protective, anti-bacterial, antistatic, water repellent, etc.) with an integrated fabric
manufacturing facility at Frosinone Italy.
Klopman has also expanded its reach to new international markets by establishing a
global sales network in the Middle East. This is with the objective of offering great
value for money work-wear and protective-wear fabrics to cater to the hotel, engineering,
shipbuilding, food-processing, oil, petrochemical and healthcare sectors bearing in mind
the specific requirements of the region.
In an effort to serve new markets outside Europe more efficiently, Klopman has also
expanded its base in Asia by setting up a joint venture with Argo Manuggal Textile (AMT)
and will soon be supplying fabrics directly from Indonesia. Starting with high quality
basic polyester/cotton blends in 210 and 245 g/m in a few months’ time, the joint
venture’s medium term plan includes an extension of the range, to cover a number of
other Klopman fabrics.
S.Kumars Unimart –
S.Kumars Unimart is the Ready-to-Wear uniforms division of MW Unitexx and caters to
various industries including automotive, airlines, infrastructure, manufacturing,
hospitality, pharmaceuticals, healthcare, FMCG, retail, government offices amongst others.
S.Kumars Unimart comprises of ‘Medallion’, the ready-to-wear school uniforms
brand and ‘WorkStarr’, the institutional uniforms brand.
S.Kumars Unimart has diversified its portfolio by expanding its customer base to cover
segments such as Oil and Gas, Iron and Steel, Pharma, Cement and Elevators, to name a few.
S.Kumars Unimart also plans to launch Unimart stores all over India which will be a
one-stop-shop for all uniform needs.
FINANCIAL PERFORMANCE
During the year under review, company achieved revenue of INR 935.72 cr. with revenues
from Overseas business amounting to INR 787.28 cr. and Domestic business amounting to INR
148.47 cr. The focus on sales has continued to be in the local markets of India for
S.Kumars and S.KumarsUnimart products and for Klopman, the focus has been to further
consolidate its position in European markets as well as to explore new international
markets.
INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
Your company has placed considerable emphasis and effort on internal control systems.
On the Financial and Administrative side, the internal checks and balances are augmented
by a formal system of internal and management audits. The Audit Committee of the Board
reviews and will continue to review the adequacy and effectiveness of the internal control
systems and suggest improvements for strengthening them.
MATERIAL DEVELOPMENTS IN HUMAN RESOURCE
Human resource is continued to be recognised as the most valued asset. The company is
adequately managed with a pool of highly talented professionals from the textile industry
to take care of all operations and allied activities. An adequate number of technically
qualified and well experienced staff- members exist for the day-to-day operations of the
Company. Emphasis is give n on qualitative growth of the Company’s human resource by
providing a congenial and constructive work environment.
CAUTIONARY STATEMENT
Statements in this report on Management’s Discussions and Analysis describing the
Company’s objectives, projections, estimates, expectations or predictions may be
forward looking statements within the meaning of applicable security laws or regulations.
These statements are based on certain assumptions and expectations of future events.
Actual results could however differ materially from those expressed or implied.
The Company assumes no responsibility in respect of forward looking statements herein
which may undergo changes in future on the basis of subsequent developments, information
or events.
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