With the global recession impacting the prices of fabrics in the international market, Reid & Taylor, a subsidiary of S Kumars Nationwide Ltd, plans to scale down its exports and focus more on the domestic market.
The rise in disposable income and the increasing preference of people for branded products are pushing up the sales in the domestic market, Misra told Business Line.
“Our domestic sales have been growing by over 40 per cent and we are hopeful of a further rise this year,” he said, pointing out that exports, currently accounting for more than 10 per cent of the company’s total sales, would be scaled down to 7 per cent in 2009-10 and to 5 per cent in the subsequent year.
“We are not allergic to the overseas market, but from now on we will focus more on the domestic business as it is becoming increasingly difficult to get a good price for your products in the international market due to the global recession,” he said.
Reid & Taylor had also set a target of opening 500 exclusive shops over two years in 2008-09. “We have already achieved 50 per cent of our target, almost 250 shops are now up and running. We plan to open 250 more this year on a franchisee model,” Misra said. The branded garments and fabric segment is set to grow at a Compounded Annual Growth Rate of 35 per cent over the next five years, he added.
The company would also look at capacity augmentation at its Mysore plant by increasing the production capacity to 113 lakh metre of fabric by 2010, up from 84 lakh metre now. “We have a lot of land in Mysore and we will look at scaling up our production from that plant,” he said.
The company, Misra said might invest about Rs 110 crore to enhance its production capacity of the Mysore plant this year. Fabric accounted for almost 70 per cent of the company’s total sales, he pointed out.
The company targets 66 per cent growth in sales at about Rs 850 crore in 2009-10. Its sales grew by 25 per cent in 2008-09 at Rs 510 crore (Rs 408 crore in 2007-08). “There has not been a slowdown in consumer goods segment, in fact, the fabric and garments business is set to grow further as there is a growing attraction for branded products among people,” he said.
Source: The Hindu Business Line