The Indian Texpreneurs Federation (ITF) will set up an Advisory Cell with industry and external experts to guide its members to step into integration with the aim of making high value-added products to improve their financial performance. For 2020-21, ITF will also focus on value creation through sustainability, financial restructuring and empowering people.
Coimbatore-based ITF is a textile industry association representing the entire value chain of textile manufacturing in Tamil Nadu. To improve the overall business performance of the textile industry in Tamil Nadu, it has identified four core focus areas as the mission for the upcoming financial year that begins on April 1.
As per the ITF – CRISIL Research report on ‘Financial Performance of Textile Sector’ for the past 4 years and 9 months ending December 31, 2019, listed company financials show a clear trend of differentiation in margins between standalone spinning vis-à-vis semi-integrated and integrated companies.
“At EBIDTA level, there is a clear difference of 250 to 350 basis points, and 500 basis points difference in ROCE levels between standalone spinning and integrated / semi-integrated companies. Within our member base of 87 lakh spindles, only 20 per cent have built integration as a business model. Therefore, it’s right time for standalone spinning companies to move up the value chain towards the target of making value added finished products,” ITF convenor Prabhu Dhamodharan said in a press release.
To guide its members to move towards integration, ITF is going to set up an Advisory Cell. “Spinning mills are nowadays selling yarn at 60 days credit due to a changed credit environment, and this integration will help them to use a portion of their own yarn as raw material instead of long credit selling,” Dhamodharan added.
The textile sector in Tamil Nadu has built all major aspects of sustainability—zero liquid discharge (ZLD) processing, efficient water management, waste reduction, maximum usage of green energy in manufacturing, achieving global benchmark in energy conservation, recycling, and circular economy. ITF is also driving its members to get their GreenCo certification and Higg Index.
“We have formed a committee with younger generation entrepreneurs to study all the positive aspects of our sector and brand the sector to position itself as the most sustainable textile cluster of India. We shall be taking up more digital strategies to reach Indian and global brands with this theme,” the ITF release said.
ITF had submitted CRISIL Research report with a large sample size of 1,800 spinning and RMG companies to the ministry of textiles, requesting financial restructuring package for the needy units. Around 30-40 per cent of ITF member units are facing working capital issues, according to Dhamodharan. “Our textiles ministry assured support in taking the issue forward to the ministry of finance. We will focus on this subject to resolve working capital issues to turnaround and improve efficiencies.”
ITF initiated ITF Leadership Academy to build a robust leadership ecosystem in the textile sector. Unleashing people power, the Academy had trained 400 managers and supervisors over the past one year through a 9-month unique programme. “After witnessing a great transformation, ITF has now decided to extend the leadership series and is aiming for imparting leadership training to 1,000 managerial and supervisory employees from the textile industry to create more happy workplaces,” the release added.
