ITF to focus on four core areas to improve overall business performance

The Indian Texpreneurs Federation (ITF), an association representing the entire value chain of textile manufacturing in Tamil Nadu, has decided to focus on four core areas to improve the overall business performance of the industry as the Mission for the 2020-21 financial year.

These include setting up an advisory cell with industry and external experts to guide members to step into integration, value creation through sustainability as competitive advantage and empowering people and unleashing people power.

The ITFCRISIL Research report on Financial Performance of the textile sector for the past four years and the recent nine month ended listed company financials show a clear trend of differentiation in margins between Standalone Spinning (Vs) Semi-integrated and Integrated companies

At EBIDTA (Earnings before Interest, Tax, Depreciation and Amortization) is a measure level, there is a clear difference of 250 to 350 basis points and 500 basis points difference in ROCE (Return on Capital Employed) levels between standalone spinning and integrated semi-integrated companies, ITF convenor Prabhu Dhamodharan said in a release Saturday.

 

With ITF member base of 87 Lakh spindles, only 20 per cent have built Integration as a business model and therefore, it was the right time for standalone spinning companies to move up the value chain towards the target of making value added finished products, he said.

ITF would set up an Advisory Cell with Industry and external experts to guide members to step into integration with the aim of making high value-added products to improve their financial performance, Damodaran said.

Spinning Mills are nowadays selling Yarn at 60 days credit due to a changed credit environment and this integration would help them use a portion of their own yarn as raw material instead of long credit selling.

On value creation through sustainability as competitive advantage, he said the Tamil Nadu Textile sector has built all major aspects of Sustainability-ZLD processing,efficient water management, waste reduction, maximum usage of green energy in manufacturing, global benchmark in energy conservation, recycling and circular economy in Textile products.

"As an Association,we are driving members towards getting their GreenCo Certification and Higg Index," he said.

ITF has formed a committee with younger generation entrepreneurs to study all positive aspects of the sector and brand it to position itself as the most sustainable textile cluster of India and would take up more digital strategies to reach Indian and global brands with this theme, he said.

Referring to Financial Restructuring, he said 30 to 40 per cent of the members units were facing working capital issues.

ITF had submitted CRISIL Research report with a large sample size of 1,800 Spinning and RMG companies to the Textiles Ministry and requested for a financial restructuring package for needy units.

The Ministry has assured support in taking the issue forward to the Finance Ministry and ITF would focus on this subject to resolve Working capital issues to turnaround and improve efficiencies, Damodaran said.

On Empowering People and Unleashing People Power, he said every business would still be a peoples business. Embracing Technology as a key enbler was crucial for companies in all industries and economic sectors, but at the end of the day, it is the people that would still make a difference.

ITF, he said, initiated the ITF Leadership Academy to build a robust leadership ecosystem in the textile sector and trained 400 managers, supervisors in the past one year through a 9-month unique program.

After witnessing a great transformation, ITF has decided to extend the leadership series and was aiming to provide training on Leadership to 1,000 Managerial and supervisory employees from the industry to create more happy workplaces, Damodran said.