In-Depth Analysis | Interviews

SANGAM INDIA’S EXPORTS SOAR 114% PLAN BIG EXPANSION: S.N.MODANI

Published: February 22, 2022
Author: DIGITAL MEDIA EXECUTIVE

Established in 1984, Sangam India Ltd is one of the leading manuafacturers in PV dyed yarn, cotton and OE yarn and also ready to stitch fabric. The company produces 35 million meters of PV fabric and 48 million meters of denim fabric annually. The Group has also introduced a seamless garment manufacturing facility with 52 seamless knitting machines. Sangam started with only eight weaving machines in 1984 and is now being recognised as a leading brand in the textile industry, with presence in over 50 countries.

The company’s major expansion kick-started in 2014, as the group saw an increase in Denim capacity to 35 million meters p.a. Installation of state-of-the-art Seamless Garment Machines with a capacity of 3.6 lakhs pieces p.a. The next big step was venturing into the B2C market space with the launch of C9 Airwear, a casual wear & active wear apparel brand for women in 2015. C9 Airwear is available across 1000 multi brand outlets in India and all major digital retail portals.

Dr. S N Modani, CEO & Managing Director, Sangam India Ltd replied to a Questionnaire sent by the Textile Value Chain. Excerpts:

1. How has the Sangam Group managed the Covid times for nearly two years?

Covid-19 had a profound effect on the textile sector of India, forcing garment factories to shut down or work at half capacity to stem new cases. We saw a historic drop in local sales and exports at an industry level, which continued for the better half of 2021 as well. Sangam India took this opportunity to rework our strategy by improving internal efficiencies and focusing on the opportunities in the global market. We invested our time in refining our systems and processes to ensure our business readiness once the markets open.

Now, with the vaccination drive in full swing and the markets bouncing back to pre-covid levels, the textile sector has also witnessed tremendous growth in the last 2 quarters, enabling us to operate at 90% capacity utilisation. The extra impetus given by us in laying down our export strategy paid rich dividends when our exports grew by 114% in Q3 FY 22.

2. Sangam Group signed an MoU with Rajasthan Government? Please give us some details.

As a part of our larger expansion strategy, we signed an MoU with the Government of Rajasthan, to invest INR 1,521 crore to set up multiple manufacturing units focusing on Spinning, Weaving, Garments, Knitting and Processing in the Bhilwara district of Rajasthan. The funding for the same would be raised in a combination of debt, internal accruals and equity.

3. What is the current situation in yarn manufacturing? What are the plans for expansion/diversification in the near future?

SIL is running on optimum capacity utilisation and we feel there’s scope to increase market share across all our businesses. Our current focus is to expand our Yarn business and we have divided our expansion strategy into two phases. Over both phases, we would be installing 65,664 spindles for the manufacture of cotton yarn at Spinning Unit-II, Village Sareri, at an estimated cost of INR 274.5 crore. The expansion will pan out over the next 3 years. This will help us increase revenue by 25%

We are also looking at expanding our Garments vertical by installing 106 knitting machines at an estimated cost of INR 157 crore. This project is proposed to be implemented under Production Linked Incentive Scheme (“PLI Scheme”).

4.Give us some information on export performance in various Divisions?

 Sangam India has posted a record sales of INR 1691 crore with our exports division contributing 36% at INR 607 crore (Yarn at Rs. 289cr, Fabric at Rs 316cr and Garments at Rs. 3cr). With this, the company’s exports have recorded an impressive jump of 114% on a YoY basis.

5.What should the Government and industry do to achieve the export targets?

The Government has already introduced key incentives like Remission of Duties and Taxes on Export Products, Rebate of State & Central Taxes and Levies which will help boost exports and give the nation a competitive edge at a global level. Recently, the government even announced the omission of anti-dumping duties on Viscose. Apart from that, we also need to look at building a robust and disruptive textile infrastructure through dedicated textile parks, which could create an ecosystem for achieving the nation’s export targets.

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