Looming Large

It’s been a tumultuous few years for India’s textile manufacturers, with raw material shortages, supply chain disruption, sagging international sales and wildly fluctuating markets creating tough conditions for the industry and even pushing a number of firms out of business.

Turbulent times are, however, filled with opportunities, and where some have failed, other strong and well-managed businesses have thrived.

Indeed, the country remains one of the world’s biggest textile producers, and market analysts predict that the industry’s fortunes are about to change, with revenues doubling by 2030 to US$350 billion. It’s already the country’s second-largest labor market (after agriculture), employing 45 million people directly and twice that figure in associated fields.

Amid the chaos, one company has been bucking the gloom that set in since the COVID-19 pandemic and was one of only a handful of Indian textile organizations to remain at full capacity. Sagar Manufacturers outperformed its peers by increasing its outreach while delivering better products and services, according to CEO Kapil Kumar Agarwal.

The company now employs more than 3,500 people. It currently operates a quarter of a million spindles and 50 knitting machines, with plans in place for many more.

A road map to success

Under Agarwal’s leadership for the past three years, it’s now on track to become a vertically integrated textile conglomerate by expanding its product footprint and capacity across several major markets.

“We’ve put together a road map for the next six years that outlines our vision and values as well as the opportunities and challenges that lie ahead for the textile industry here in India and globally,” he tells The CEO Magazine from his Bhopal office.

“There is a clarity of purpose throughout the organization and a highly meritorious work culture where everyone is enthused to give their best performance individually and as part of their team.”

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“Rieter is privileged to have a long-standing partnership with one of the most trusted brands in the global textile business. Sagar has a diverse product range that offers an industry benchmark in quality. Together, we envisage sustainable, long-term growth.” – Prasanta Deka, Country Managing Director, Rieter India

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The strategy has paid off, but Agarwal knows there is still much work to be done if they are to increase their portion of India’s expanding textile pie.

“To be really successful, we need to be focused on our value proposition to our customers – to be dependable, reliable, efficient and resilient,” he declares.

Many international businesses are adopting the China Plus One strategy, in an attempt to diversify their supply chain and business investment opportunities, he adds.

“This throws up such an opportunity for us. Our economy is growing fairly fast, so we can exploit new domestic markets as well as those overseas.”

Sagar Manufacturers was established in 2012 as the textile arm of the giant Sagar Group, which also operates in the construction, education, textiles, rice milling and hospital sectors.

“Over the next 10 years, we expect Indian demand to grow very fast so we’re making sure our company provides high-quality yarns and fabrics and a reliable service to its customers,” Agarwal notes.

“We have become extremely resilient as we’ve seen how volatile the market can be and what happens when the price of raw materials goes up or they become unavailable. That’s why we were the only producer who didn’t stop a single spindle during the downturn.”

Collaborative culture

But the high standards haven’t led to ballooning costs. Sagar is known as a very lean operator with a flat management structure where people are empowered to make decisions promptly, reducing wasted time and encouraging innovation. Its collaborative culture also means it has built meaningful partnerships with many long-term customers and suppliers.

One of them, Rieter, is the world’s leading supplier of machinery and materials for making yarn from staple fibers in spinning mills. It uses cutting-edge technologies to achieve the premium quality that Sagar needs and has been a crucial ally for several years.

Sagar too uses state-of-the-art technologies, machinery and equipment in its factories and has been investing heavily in the future.

“We are keeping pace with the best in the world and continuously upgrading our textile and business processes and technologies,” Agarwal explains.

“We’ve installed 12 megawatts of solar power and are equipped to provide very superior products. We’re adding 50 more knitting machines, another spinning unit and a dyeing and printing plant, which is a big leap forward in our journey toward being an integrated textile company.”

Agarwal is confident that his ambitious approach will pay dividends and sees a strong future for the company.

“There will still be many challenges for such a low margin industry, but India and the world have a large and growing population who are very fond of wearing new clothes and discovering new fashions, creating fresh opportunities,” he says.