Mumbai 21, December: SVP Global Venture Ltd’s inherent
and unique strength is its latest and most advanced and cost efficient manufacturingfacilities,
strategically located between India and Oman on the global textile trade route.Owing
to its 100+ years legacy in the textile trade, the company has an established
and efficient raw material procurement system and extensive Sales distribution
network in India and overseas for its products.Despite severe disruptions in
Indian domestic demand for Yarn, including deferment of shipment and delay in
the orders due to COVID 19 pandemic, thecompany has managed to leverage on its
vast distribution network to selectively focus on more profitable marketsoverseas
to overcome the exigency.
The company’s revenue reboundedto Rs. 364 Cr. in Q2FY21
compared with Rs. 91.82 Cr in last quarter. The Profitability stood at Rs.
10.75 Cr in Q2FY21 as against a loss of Rs.57.44 Cr in last quarter, primarily
attributed to the COVID lockdown.The companycurrently has sales tie-ups and
Yarn offtake arrangements for the next 2-3 years of Production, valued at Rs. 5000
crs.,from buyers across the global textile markets.
The Company’s focus over the last few years has been to exit
from low margin and non-core business and focus on high margin compact yarn
capacity expansion. This has reflected in overall EBITDA margin improvements to
16.51% in FY2019-20 against 14.87% in FY 2018-19 ,registering aYoY growth of 12.4%
. The PAT and EPS has registered a growth of 10.6% and 11.9% respectively
duringthe same period. The current capacity utilization level is now back to
pre-Covid levels and stood at more than 95% for Indian operations and around
50% for Oman operations. In Oman, ramping of the capacity utilization is currently
in process for the recently set up 150,000 Spindles which is expected to operate
attarget more than 95% in coming quarters.
With 50
Million Spindles and 0.75 Mn Open-End Rotors, India has a commanding share of
the global Cotton Yarn market, currently producing over 4700 Mn.Kgs of spun
yarn of which over 3,400 Mn.Kgs is cotton yarn. Cotton Yarn accounts for nearly
73% of total spun yarn production.
Speaking on its
Capacity and Consolidation Plans Mr. Vinod Pittie, Chairman, Shri Vallabh
Pittie Group, observed: SVP’s quick response to competing in the global market has been its
integration of latest manufacturing technology well adopted into business
operations and capacity expansion. The company expanded its manufacturing
operations in 2016 by setting up and starting commercial operations from state
of the art, most modern and automated, 150,000 spindles and 2,400 rotors cotton
yarn manufacturing facility in Jhalawar, Rajasthan. Constant innovation and
adoption of new technology have become an essential element for competitive
advantage in the global market and SVP has maintained quick and flexible
responses to market demand using technologies, consumer behavior and
expectations. In addition, digital transformation has fueled remarkable
advancements in manufacturing technologies and expansion of existing capacities
enabling the company to move from labor-intensive to capital-intensive
production.
Additionally states “Between 2018-2019 we commenced set
up and commercial operations of a manufacturing unit of 3500 rotors and 150,000
spindles in Oman. As on date the company has an aggregate manufacturing
capacity of 4,00,000 spindlesand 5900 rotors in India and Oman. Major problem
existing with the Indian manufacturers is the lack of scale, low manpower
efficiency and lesser focus on research and innovation activities.
India, second-largest manufacturer and exporter of textiles
and clothing globally with a share of 5% of global trade has registered an
increase in the export of 3 %, from US$ 39.2 billion during the year 2017-18 to
US$ 40.4 billion in the year 2018–19. The share of textile and clothing in
India’s total exports stood at 12% in 2018-19. With 48% of total textile and
apparel export, European nations and the United States are India’s major export
destinations. The trade war between the US and China and standoff between India
and China could lead to the creation of additional yarn and cotton demand from
neighboring countries to the tune of 0.5 million tonnes and 8-10 million bales.
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