Professional Documents
Culture Documents
By
Sonali Chatterjee
Textiles are primarily used for three industries: apparel, home furnishings,
and industrial uses. Home textiles can be defined as non-apparel (exclude
apparels/garment Products) textile end-products (They do not require further
manufacturing or processing, can directly used) having non-industrial
utilities. Although they are categorized as home textiles but their usage is not
restricted to homes but to commercial premises as hotels, hospitals,
institutes, offices, etc.
Bath Linen: Bath towels are also to an extent a basic necessity. It is the
second largest category in the home textile product basket in India. The
members of a low income family usually share towels among themselves.
However, due to increasing awareness of hygiene, the preference for
independent bathing towels for each member of the family growing. The
growth in this category has a linear relationship with the growth in
population.
Countries like China, India, Bangladesh, etc. have the distinct advantage of
low labor costs. Further India and China also have a very strong raw material
base. Thus the cost of production of textile products in these countries is
significantly lower than other countries like US and EU. Earlier the quotas
under MFA restricted the quantum of exports of textile products from low-
cost producers to the US, EU and Canada. The quotas were specifically
introduced to protect the indigenous textile companies in these countries.
However the complete abolition of quotas from January 2005 has resulted in
free trade of textile products across the globe, thus rendering companies
based in the US and EU not cost-competitive. Accordingly, the textiles
companies in these regions are shutting down and the capacities are shifting
from west to the low cost eastern countries.
As we know the removal of quotas has given the Indian textile companies
unrestricted access to the global market. Many companies in the US and EU
are shutting their operations due to high costs and Indian companies are
buying out these ailing units. The main reason behind such acquisitions is not
to obtain the manufacturing capacities but to gain access and control of
foreign markets by utilizing the already established brand name, distribution
channels, marketing platform and customer base of the company bought out.
Gujarat Heavy Chemicals Limited (GHCL) has acquired a 100 per cent stake
in Rosebys, the largest home textile retail chain company in UK for $40
million. Rosebys had a strong presence in bedding, curtains and kid’s
garments, with more than 300 retail outlets across UK. Prior to this GHCL
had acquired nearly 90 per cent stake in Dan River Inc, a leading home
textile player in the US for $17.5 million.
Many textile companies in India are planning to foray into the home textile
business. Home textiles are value-added products, and thus comparatively
more profitable than traditional spinning, weaving and processing business.
To convert the processed fabric into a home textile product, lower cost and
effort is required but the value addition is higher and thus the realizations of
home textile products are significantly higher than that of processed fabrics.
Also since the home textile and garment manufacturing capacities are
shifting from high-cost countries in the West to low cost countries in the East
including India direct export of yarns and fabrics to the western countries are
expected to slow down. Hence many companies manufacturing yarns and
fabrics have aptly decided to foray into the home textile business.
Conclusion