“Through our extensive market research, we have understood the demand of technical textile products in developed countries have reached to stagnancy level now and market is shifting to developing counties”, says Avinash Mayekar, MD & CEO of Suvin Advisors Pvt Ltd, in an interview with the ITJ.
How was the year 2015 for the segment you are in?
We had seen slack period in textile industry for the last few years. But after a stable Government, textile industry showed some signs of cheering up. Some of the big textile players are planning to bundle up their capacities but lack of clarity in Government policies are major bottleneck into the investment. Some of the small players are also showing interest into diversification. Though awareness on technical textiles is in nascent stage in India, 2015 can be considered revolutionary year in terms of technical textiles. I have been talking to many entrepreneurs throughout this year and we have received a number of inquiries for technical textiles. Many entrepreneurs were very keen to know about it. But what surprise most to me is that most of the enquiries I got are from non-textile background entrepreneurs. The main reason being technical textiles have major applications in industries like automobile, healthcare, agriculture, industrial and construction, etc., so existing players from these several industries are keen to invest into the segment. Technical textile is low investment sector. PM’s ‘Make in India’ initiative has boosted investment from new start-ups. We have received many inquiries from new start-up investors. Considering the low investment cost and growing market, technical textiles will be the right opportunity of investment to such start-ups.
Indian technical textile industry has witnessed significant growth of about 16 per cent from 2001-02 to 2013-14 and is expected to grow at the rate of 20 per cent year-on-year to reach market size of $36 billion by 2016-17. Many conventional textile players are fighting for profits margins and facing difficulty in sustaining in the industry due to higher capital and operating cost. On the contrary, some of the technical textiles are having higher profit margins and low operational costs. One can definitely say that 2015 is the year of transition for technical textile sector as technical textiles have stirred up the market and many entrepreneurs are showing interest in the sector.
Through our extensive market research, we have understood the demand of technical textile products in developed countries have reached to stagnancy level now and market is shifting to developing counties. Many of existing plants in European countries are shutting down the operations due to high manufacturing cost in these countries. We have smartly identified that this is an opportunity for Indian investors who are willing to invest into technical textile sector. We adopted the strategy where we carry out technical audits of such units and assist Indian investors to buy these highly automated machines which are merely 5-7 years old having good residual life. This brings down their project cost significantly.
What are the hopes and trouble spots you expect in the coming year and beyond?
Entrepreneurs are skeptical to invest due lack of clarity on TUFS and other government subsidies to the textile sector. They are hesitating to invest into sector. Though textile industry is one of the core segments of Indian manufacturing industry, contributing 14 per cent of total industrial output and employing about 45 million populations directly, it is receiving step-motherly treatment in budget. Hopefully, next budget will favour textile sector.
As I said, technical textiles will be hot cake in coming years. Their wide range of applications, lack of competition and growing consumer an