Written by Avinash Mayekar, MD & CEO, Suvin Advisors Pvt. Ltd.
Value addition as term suggests “when value is added to something”. But in many cases value addition term referred when financial value is added to the product or process so value addition term is taken in the wrong sense. Real value addition comes from the augmentation of process, innovation of technology, re-engineering of processing parameters or reduction in operating cost e.g. technology advancement in Technical Textiles leads transformation of fibre to fabric in shorter duration is kind of value addition in process unlike in conventional textiles where it takes longer duration whereby increasing total product cycle.
So, the time has come to understand, where actual value lies. Value lies in converting low price raw material into final product for various applications which can be marketed at very high price. Similarly value addition is achieved by having proper waste management system to reduce total raw material cost. There are various plants in Israel & Italy where waste materials from textile industry is used to manufacture various types of textile products like carpets, rugs etc. This waste material is bleached & then converted into value added product & sold in market at higher value. One cannot identify that these products are generated from waste materials, so this is real value addition.
Value addition is process driven. The process where overall power cost is reduced by altering conventional process is a value addition. The process where overall product cycle is altered is a value addition. The process where dyes and chemicals are reduced is a value addition. So, value addition leads to increase in profit levels cutting down overall cost involved in product manufacturing. One cannot control some costs like raw material cost, utilities like water & power cost but he can definitely bring value addition in technology & process. Especially, in case of conventional textiles where value addition plays very important role as market faces very high level of competition. There are ample numbers of producers of yarn, fabric & garments in the market, so value addition cannot be just done only from fibre to yarn, yarn to fabric, fabric to garment but it has to be done by various other methods like by optimization of overall operating cost, by improving the spinability of fibres with the use of various spinning techniques so that one can use inferior raw materials & produce best quality of yarn , by optimizing weaving costs with the use of various weaving techniques like reduction in Cover factor, EPI ( Ends per inch) & PPI (Picks per inch) keeping fabric structure same, by generating best recipes to increase pick up ratio dyes & chemicals. So, value addition is the key to survive in the competition & thereby to bring about sustainable growth in long run.
Value addition can also be brought by various techniques of improving efficiency & productivity of the plant and quality of the products. In fact our associate Werner International USA is providing such services since past 7 decades in 70 countries. They are also involved in training manpower as per international standards to improve productivity, efficiency, utilization and reduce operating cost. Such trainings are very crucial in Indian market where many companies have infrastructure & machineries of global standards but workforce which is required to operate such high standard machineries are not trained enough.
Innovative product development is also a value addition. These products are developed considering market demand. For example, various kinds of wipes are seen in the market nowadays ranging from kitchen wipes, baby wipes, industrial wipes & many more. Freudenberg is a German company involved in production of such wipes & they are specialized in production of such wipes. Beauty of these wipes is they are becoming thinner and thinner day by day & at the same time they are using finishes which are utmost necessary. So, depending upon the end use ranging from household to industrial purpose, wipes of various GSM, various fibres, and various finishes are available in the market. This indicates how wide range of technology innovations can be brought in the single product & can be used for multipurpose. This kind value addition required for textile value chain.
In India, value addition is always considered from fibre to yarn, yarn to fabric, fabric to garment barring few examples. But we have to understand need of setting up R & D facilities, generating new techniques & innovative methods.
In India, there are various low cost natural fibres available in the market e.g. Jute fibre which is abundantly available as resource in eastern part of India. This is used for producing various end products like geotextiles, mats, bags & other decorative products since years. But it’s time to innovate these products by reducing GSM, by applying various finishes, by beautifying products with different dyeing techniques. Thus there are many ways to convert conventional products into value added products.
Conclusion: value addition is not just a process, but it is science, it is an art, it is commerce & it is engineering. Ultimately value addition brings about profit. However, profit is not the only criteria to characterize value addition but it also reduces the resources required in the manufacturing process saving it for future as they are limited, it sets skills & brings about technology advancement which is necessity of any industry!
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