The leather division of Tata International Ltd. has drawn up plans to increase its share in the domestic market fourfold in the next three to four years by unveiling international products, says V. Muthukumaran, head, leather products, Tata International Ltd., in aconversation. Edited excerpts:
What was the impact of the economic slowdown on your business?
We have been posting good growth year-on-year as we exported nearly 95% of our products. So, there was hardly any impact of the economic slowdown on our business. We produced four million pairs of footwear in FY18 and this rose to 4.5 million in FY19. We will be manufacturing close to 5.5 million pairs this fiscal and our target is 7 million by FY21 and 10 million by FY23.
What will your capital expenditure be?
We will be investing close to ₹500 crore over the next five years on capital expenditure, to make synthetic and non-leather products and ladies shoes.
This calls for setting up new lines of production, upgrading existing ones and doubling the workforce at our Ranipet facility to 15,000 people. Right now, women employees comprise 80% of total workforce.
We have manufacturing facilities in Ranipet that make 5 million pairs of footwear a year, followed by units in Ambur and Chennai that make one million pairs each, respectively. Our unit in Chittoor in Andhra Pradesh is a small facility that makes 1,000 pairs of shoe uppers per day, which will be increased to 3,000 pairs per day. Over the next 3-4 years, one more unit might come up in Walajabad in Tamil Nadu. We also make garments, outsoles, leather articles and non-leather items.
Will you be focussing more on exports?
No. We are now contemplating an increase in our share in the domestic market from the current 5% to 20% in the next three to four years. This requires setting up new stores.
Right now, we have the first store in Indore and a second one will be opened in Chennai soon. Right now, we also have domestic presence in school shoes ‘Feetscience’ that sells two lakh pairs.
How do you plan to face intense competition from existing players?
We will be introducing ‘Saydo’ brand of comfort women shoes in India next year. Currently, it is being manufactured in India and Portugal and sold in Europe in limited numbers. Our idea is to increase its sales volume both in India and Europe. It is retailed between ₹2,500 and ₹5,000 a pair.
Tell us about Tata International’s various production capacities...
We produce five million pieces of leather articles, 50,000 pieces of leather garments, 8 million pairs of outsoles, 6 million pieces of leather footwear, 2 million pairs of non-leather footwear and 40 million sq.ft. of finished leather.
We are the third-largest exporter of leather and leather products, the second-largest exporter of finished leather and the second-largest exporter of leather footwear.
What will be the division’s turnover?
We are looking at achieving ₹1,000 crore this fiscal, which would be an increase of 15% over the corresponding period last year. We export products to 30 countries such as the U.S. and Australia and those in Europe. We are aiming at revenue of ₹1,500-1,600 crore, when the sales volume touches 10 million pairs per annum.
Your major clients?
We offer premium brands of footwear in children’s, ladies’ and men’s categories. Our clients include Alpine Stars, Caleres, Clarks, H&M, Deichmann, Geox, Marks & Spencer, Massimo Dutti, Zara and Woverine.
