What started as an effort to bring transparency into the garment export segment, AO Top 100 has become an annual feature with a majority (60%) of companies coming forward to participate on our first request, a marked improvement from earlier years when most of the companies had to be coaxed to send in their details. Many even asked bluntly why they should share their turnovers as they are not public limited companies… however things are changing, though slowly. Yet many companies are still reluctant to share data and the relevance of the exercise is lost to them. Apparel Online has always maintained that the only way for collective growth is to share information and work out a winning strategy based on experiences and SWOT analyses.
We realize that this list is not exhaustive and certainly many inferences can be made, but it is an honest attempt to decode the industry as a sample… to understand and analyze how the industry is doing, while also interpreting directions noticed. Like the last year many companies that participated earlier have preferred to stay out of the listing, this is indeed very disappointing but then the most obvious reason is the market slowdown due to which many companies have missed growth targets… Without naming companies, some of them specifically requested that their companies should not be listed this time, promising to come back next year, much stronger… Readers will find some big names missing; the interpretation is open to inferences.
Since the set of names this year is different from the last year, making direct comparisons between inferences drawn by two different sample sets is difficult. We have included a few players who did not respond…for whatever reason, based on market feedbacks as the list cannot ignore these players, the same have been clearly marked out.
Many textile mills in AO Top 100
On the positive side, this year’s listing contains names of many integrated setups like Arvind Mills, Malwa Industries, Nahar Industries, Bombay Rayon Fashions, Mandhana Industries, KPR, SEL Industries, Alok and Ginni Filaments to name the bigger ones. Not all of them have focus on garmenting, but the thrust on forward integration cannot be ignored as a trend. For many other integrated companies like Eastman Exports, Gupta Exim, GO GO International, Cotton Blossom, Dhruv Global to name a few the thrust area is garmenting with backward integrated support mainly for in-house production.
Among the 100 companies listed, 70 names are the same with 30 companies joining the listing for the first time. Significantly the first eleven companies on last year’s list were among the first to respond, Shahi Exports excluded. Shahi has always stayed away from sharing figures though the same is available from AEPC records, based on which the company has recently received highest exports turnover award. It is also important to mention that last year, despite repeated requests, some companies did not share their turnover in garment exports and we decided to consider their group turnover for positioning in the Top 100 listing. These companies were specifically indicated for clarity.
This year we have positioned the companies based on their turnover in garment export segment… Of course many feel that it is a misrepresentation of the companies strength when large integrated units like KPR, Alok, Malwa and SEL are placed behind many smaller companies, but the effort is to talk about how garment exports is moving and not how textile industry is moving. Among the companies which participated, 24 are having yarn manufacturing, 16 weaving facilities, 40 knitting facilities and 45 are into processing. Of course many did not fill the domain. Yet the focus on supply chain integration is obvious.
Top 100 going strong
Last year the Top 100 registered a turnover of Rs. 20,502.66 crore a 9.79% increase in turnover from the previous year’s (FY 2008-09) total turnover of Rs. 18,673.89 crore. This year the turnover has been recorded in two segments: Total turnover of companies participating which is an impressive Rs. 41,890.24 crore and the total turnover only generated from garment exports which amounts to Rs. 19,382.88 crore. The decrease is a marginal (-)0.5% from the figures last year.
The collective projections for FY 2010-11 in the last year’s Top 100 Analysis stood at Rs. 23,938.72 crore a growth of around 16.76%… unfortunately the targets could not be met. It is important to remember that 12 companies having revenue over Rs. 100 crore on the list last year have not participated. Their collective turnover was Rs. 2478.39 crore. If we add this to the turnover realised this year the total turnover would be Rs. 21,861.29 crore which is an increase of nearly 7% from last years realised turnover.
While the turnover of the Top 100 listed companies last year accounted for 38% of total garment exports from India, this year they account for 33.6% of total exports.
Analysis top 100 for FY 2010-11
Though many lapses are possible in analyzing the data shared by the companies participating, as some domains in the form were left unanswered by many respondents, the directions that emerge are indicators and not conclusive results. AO urges its readers to be more forthcoming in sharing information, so the analysis can be more representative of the industry.
46% of players on list have revenue above Rs. 100 crore
With 46 companies having garment export turnovers above Rs. 100 crore, the combined turnover of the group is Rs. 16,592.12 crore. This is over 85.60% of the total combined turnover of the Top 100 listed companies.
In last year’s listing 51 companies listed had a turnover of above Rs. 100 crore and the combined turnover of the group was Rs. 19,409.65 crore, which was over 89.60% of the total combined turnover of the Top 100.
If we take into consideration the 12 companies with revenue over Rs. 100 crore that did not participate this year than the total number of companies with over Rs. 100 crore would be 58, implying that the number of exporters crossing the Rs. 100 crore revenue is increasing.
There are 29 companies with turnovers between Rs. 50 to Rs. 100 crore with collective turnover of Rs. 1,917.79 crore and 25 companies form the tail of this group with turnovers of less than Rs. 50 crore but more than Rs. 20 crore accounting for Rs. 872.97 crore export turnovers.
It is important to remember that many companies last year who had over Rs. 100 crore turnover have stayed away from the listing this time, prominent names include Richa & Co., K. Mohan, Radnik Exports, SPL Industries, Venus Garments and SP Apparels. In all 12 companies with turnovers of above Rs. 100 crore in last year’s AO Top 100 listing have chosen to give the list a skip this years for reasons best known to them.
Exporters from Delhi-NCR dominate AO Top 100 listing for the fourth successive year with 36% respondents
Like the past years, the AO TOP 100 listing indicates that the Delhi-NCR region is still the most represented area in the listing with 36% players coming from this region, though down vis-à-vis last year’s 43%. The collective turnover of this region as represented in the listing is of Rs. 6,443.40 crore, which is 33.24% of the total turnover represented by the listing. The collective turnover of the region as represented in the listing last year was Rs. 7,508.52 crore, which was 36.62% of the total turnover represented by the listing.
There are some very big names from the region like Shahi, Orient Craft and Pearl Global. It is important to mention that these companies are not operating in Delhi-NCR alone, while Shahi is having factories in Karnataka, Orient Craft has a unit in Rajasthan, and Pearl Global is a truly global company with operations in Bangladesh, Indonesia, US, UK and Hong Kong. A majority of the players from the region are mid-level making mostly high-value garments with better returns accounting for healthy turnovers. Of course, many companies are facing difficulties with rising labour cost and acute shortage of workforce, but that is not specific to the region.
In all, Gurgaon has 10 companies, Noida 13 companies, Delhi 7 companies and Faridabad 6 companies on the list this year. In the last analysis Gurgaon had 11 companies, Noida 13 companies, Delhi 15 companies and Faridabad 4 companies on the list. Again it is important to mention that many of the companies are having factories in Delhi and the satellite cities, as we have calculated based on where the bosses are sitting.
Of the total players in this region, there are 15 exporters having turnover of more than Rs. 100 crore with a total collective turnover of Rs. 5,440.15 crore. Last year there were 21 exporters having more than Rs 100 crore turnover with collective turnover of Rs. 6,369.45 crore.
Tirupur repeats performance with 18 exporters on list
After the Delhi-NCR, the second most represented region is Tirupur with 18 companies, 6 of which claim to be fully integrated having a collective turnover of Rs. 3,697.84 crore on the listing. Last year too there were 18 companies, but 6 of them have preferred to stay away and they have been replaced by six new companies.
The 18 companies represented from Tirupur last year had a collective turnover of Rs. 4,246.68 crore. This year, among the big companies, SP Apparels has specifically requested to be dropped from the list, a disappointment, but an indication that the AO listing is being considered as a serious attempt to furnish a true picture and companies do not want to retain positions with false information.
Of these 18 companies listed this year, 8 are having turnover of above Rs. 100 crore accounting for a total collective turnover of Rs. 3,119.26 crore. Tirupur has suffered major problems in the last year because of the environmental issues, but the vibes are still positive and all companies are projecting growth for the FY 2011-12.
Mumbai exporters register collective revenue of Rs. 3,200.69 crore
Mumbai is represented in the AO Top 100 list by 11 companies, up three companies from last year’s. While the collective turnover last year was Rs. 3254.65 crore with 5 companies having turnover of more than Rs. 100 crore, this year 6 companies are having turnover of above Rs. 100 crore with a collective turnover in garmenting of Rs. 3,200.69 crore. Big names in textiles like Alok Industries, Bombay Rayon Fashions and Mandhana Industries represent this region. Taking into consideration group turnovers, the region has collective turnovers of Rs. 11,183.06 crore.
Though Bangalore is the centre for big players only 9 companies are on the list, similar to last year, the collective turnover of this group is Rs. 2,733.41 crore, a drop from the collective turnover of Rs. 3,022.20 crore in last year’s analysis. Of the 9 players listed, 7 are having turnover of above Rs. 100 crore which is indeed impressive accounting for collective turnover of Rs 2,600.41crore.
Other manufacturing bases represented include 7 players from Chennai with collective turnover of Rs. 677.29 crore, Ludhiana with 7 players and a collective turnover of Rs. 1,013.07 crore, Jaipur with 3 players, Kolkata with 2 players and Indore, Hyderabad, Kerala and Cochin with one player each are also on the list.
We have taken the location of the company as per head offices and as repeatedly mentioned it is a bit difficult to segregate turnovers by regions as many companies have headquarters in one city but factories in others.
Exporters looking at domestic presence to balance operations
In our last year listing, 42% companies had domestic presence either through their own brands or with dedicated lines for leading Indian brands or international brands with stores in India. This year the number of companies with domestic manufacturing is marginally less at 39% with 61 companies claiming to be purely international market driven.
Considering the 12 top companies that did not participate this time, four of them had domestic presence. It cannot be denied that working in the domestic retail market is definitely a direction. More and more exporters are entering the arena as the global market slows down and orders are coming in smaller quantities. AO has always advocated that the different markets have converged into one big global market and it will no longer make a difference whether a company is manufacturing for the domestic retail market or for the international market.
While for some exporters entering domestic manufacturing is only to fill capacities, while for many others like BL International, Viraj Exports and Indian Design the segment is a growth area through their own brands. Among the new entrants, Network Clothing Company from Tirupur has just entered the domestic market with their newly launched brand ‘Twin Birds’. Away from the AO Top 100 listed companies, many exporters are now pursuing this path for future growth.
Men still dominate shop floor
The AO Top 100 listed companies employ around 4,70,242 people (which does not include figures from Shahi, which is believed to employ around 60,000 people today). Of these 2,01,263 are men and 1,98,382 are women. 8 companies did not respond to this domain and 87 companies gave the break-up in terms of men/women workers. Of the 87 companies, 63 companies had a majority of men workers and 24 showed more women employees. Interestingly, the mix of companies on man/women worker ratio is tilled towards the south with more companies claiming to depend on women workers vis-à-vis men. However, the number of women workers is increasing in the north also and many factories are employing a large section of women workers.
80% of companies show growth
It is encouraging to note that despite the difficult conditions in FY 2009-10, 80% of companies listed saw growth with only 14 companies witnessing a downfall in business, 3 companies remained at the same level and data of 3 exporters was unavailable for the previous financial. Last year 50% of companies on the list saw growth with 22 companies witnessing a downfall in business, 28 were new entrants to the listing, so their FY 2008-09 figures were not available and the remaining were at the same levels.
This augurs well for the industry and speaks of the confidence of the top players to grow even in difficult economic times. It may be noted that these are the very players who have put processes in place and are bench marked for efficiencies. On the other hand, many of the medium players are working in niche areas and have the strength of product development behind them.
77% project growth
The good news is that 77% of the companies listed expect growth with only 7 companies projecting a decline in turnovers, 5 companies expecting to achieve the same turnover and 11 companies including names like Gokaldas Exports, Gokaldas Images, Mandhana Industries and Eastman Exports refraining from giving projections. It is also interesting to notice that the growth expectations are coming from all level of exporters and is not specific to the really big players.
No doubt the uncertainty of the global scenario is unpredictable and how the FY 2011-12 will close is anyone’s guess. Yet the 89 companies that have projected turnovers in garment exports are collectively looking at turnovers of Rs. 21,025.49 crore, which is a growth of 8.47% over this year’s top 100 collective turnover in garments.
Last year 90% of the companies that participated, projected growths for FY 2010-11 anticipating increase turnover of Rs. 23,938.72 crore.
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