When China controls the global market in all most all areas of manufacturing, an Indian company, Garware Technical Fibres Ltd. (formerly Garware-Wall Ropes Ltd.), has created world-class capabilities to lead in technical ropes used for fisheries, agriculture, shipping and industrial purposes, geosynthetics and sports. In an interview,Vayu Garware, chairman & managing director of the company, elaborates. Edited excerpts:
How has Covid impacted your business?
While everyone is impacted, we are little bit fortunate because 60% of our sales come from exports. In addition, 70% of our business relates to food.
We are global leaders in salmon aquaculture. In India, we work in agriculture namely protected farming and mechanised fishing products like fishing net and ropes.
Since a majority of our businesses are food-related, the impact on demand side is temporary. Also, there was an impact from supply side when factories had been closed. So, now, we have a lot of catching up to do.
All of the businesses were impacted during the lockdown because we couldn’t produce either for international or for domestic markets but the demand is fairly intact in food-based industries.
What about the impact on Indian the economy?
I am not an economist so I am not qualified to talk about it. As fas as our business is concerned, there is an economic impact and if you see our global businesses where the end consumer of our products is producing food, either catching fish, growing fish or agriculture, the economic impact, both downturn and upturn, tends to be a bit less.
For example, when the economy is booming, we do not see these industries having huge double-digit growth. And, in a downturn, we don’t see them having big double-digit negatives.
But we do have some other special businesses such as safety products for construction. That is going to go through a very tough time. We have a business in geosynthetics which is infrastructure based. That looks pretty good because we work with the railways and they are doing a lot of work now.
We work with private companies for construction of their landfills and securing toxic effluents. These kind of projects have continued. We have seen some temporary impact in our sports netting business overseas though.
China is generally big in every business. Where do you stand before them?
Our major global industry is salmon aquaculture. We are global leaders as far as cage and mooring solutions into salmon farming are concerned. In cage nets, we have a 80% market share in Scotland; 90% in Canada, 30-35% in Chile and 30-35% in Norway.
The Chinese competition would probably be third or fourth because there would be European companies in second or third position.
How did you manage to achieve this?
The difference is that as a strategy our company is very focused on innovative solutions and finally, what we call value delivery through enhancing profit of our customers.
Ten years ago, we tried to understand what is our DNA and why do we come to office every day. And that was where we came out with a mission to grow the profit of our customers. That is our job; if we do that well, better than anyone else, the customers will definitely stay with us and continue to buy from us.
We realised that the only way is to understand the customer’s application and innovate our products to deliver better profit to the customers.
So, we brought on board application experts who really understand the application (not our manufacturing technology) but actually from the customers’ points of view of our products and that allowed us to start developing many products.
Five to six years ago, value-added, innovative products were only 30% of our sales and it has gone up to 70%.
So, through innovation and value delivery, we are today global leaders. We are certainly not the cheapest and probably one of the most expensive in terms of final product but we deliver the best value.
We are not fighting China but ourselves. We are our biggest competitors. We are trying to make sure that we are continuously ahead of the game because we believe being a price competition is temporary.
Today, India maybe cheaper, tomorrow China may be, a third day Vietnam then Africa. So, just labour arbitrage doesn’t work and I don’t think that it can be a long-term strategy.
What is your strategy?
Our strategy is very much around innovation and value delivery. We want to be globally number one or two in all the major segments that we play.
We are now leaders in the salmon farming industry. In India, we are not facing much of the Chinese competition in our businesses. In Indian fishing, for example, we have at least 60-65% market share here as well and we’re able to again do that because it’s a very distribution- oriented business, a lot of varieties were brought up.
Our plants run somewhere around 20,000 skus (stock keeping units) of products. Approximately 8,000 unique products are run every month and that leads to a lot of complication and it is very difficult for a Chinese manufacturer to probably come and deliver that kind of variety to the market.
So, these kind of things keep us quite separated and we certainly don’t see this competition issue from China in our industries.
How much is China controlling here?
In India, China is a very small component. I would not even say it is more than 5-10%, which is nothing much.
In our industry it’s not an issue. I definitely feel that the government’s push on being self-reliant is a good direction. In our view, it should not become a protectionism. We should be able to leverage our Indian companies in our own market but those companies should also be efficient and innovative enough to go and dominate outside.
So, if you become very protectionist, then those skills and competitive edge can get blunted.
Can India become a global manufacturing hub?
Why not? I don’t find any reason why it cannot.
What is your future plan?
Our future strategy includes geographic expansion from 75 countries around the world to many more countries; expanding our product offerings and getting into new likes of business.
Since our processes are very similar to a textile, we will go on modular expansion at our factory. We are constantly expanding and we spend about ₹40-50 crore a year on that.
Published - July 07, 2020 07:50 pm IST
