Madura Garments’ exports up 32% despite appreciating rupee

Madura Garments’ exports up 32% despite appreciating rupee
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First Published: Mon, Apr 14 2008. 02 16 AM IST

Updated: Mon, Apr 14 2008. 02 16 AM IST
Bangalore: At the time when textiles exporters across the country have been hit hard because of the rising rupee, Madura Garments Exports Ltd, or MGEL, has posted a 32% increase in its export revenues to touch Rs225 crore in financial year 2007-08 that ended on 31 March.
Mint had reported on 11 April that exports from India’s main apparel hub Tirupur had dipped by 10%.
MGEL, a fully owned subsidiary of Aditya Birla Nuvo Ltd that focuses on garment exports, says it expects a turnover of Rs425 crore in the current fiscal year and revenues of Rs1,000 crore by end of fiscal year 2011.?The company’s chief operating officer, Partho Kar, says the company contributes nearly 25% to branded apparel and retail company Madura Garments’ overall revenue.
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While Kar did not share the net earnings of MGEL as it is reflected in Aditya Birla Nuvo’s numbers, he said, “We are able to get better margins because of our long-standing relationships and superior quality.”
Aditya Birla Nuvo, formerly Indian Rayon and Industries Ltd, is a diversified conglomerate within the Aditya Birla Group.
MGEL is a key supplier to several well-known international brands such as Marks and Spencer, Ralph Lauren, Polo, Next, Tommy Hilfiger and Menswear House. The exporter delivers services varying from design to actual delivery of merchandise at the customers’ warehouse in their home country.
Kar says in fiscal 2008, the company exported nearly nine million pieces of shirts, trousers and other garments. It expects to export 15 million garments this year. The company has four large manufacturing units with 4,000 machines, and employs about 7,500 people.
With the US comprising 25-30% of Indian apparel and textiles exports, industry experts say the appreciation of the rupee against the US dollar by more than 12% resulted in lower apparel and textiles exports to America in 2007.
Saying that MGEL would have grown faster if not for the rising rupee, Kar adds, “We are also rattled by the weakening dollar. We have, therefore, now shifted our dollar dominated business to euros and pounds, and have taken up cost cutting measures including a man to machine ratio correction.”
While earlier 57% of their business used to be in dollars, now its has been reduced to 43%, he says. The shift in currency denomination as well as expanding to newer markets has helped the company buck the general recessionary trend for apparel exporters.
Kar says the company is looking for partnerships and would be interested in acquisition if there is right fit. “The decision to take over a company would largely depend on how that firm adds to MGEL’s profits and brings in newer customers.”
MGEL has started providing designs to its clients and educating them on trends prevalent in other geographies. It has designer teams across the globe, which keep a tab on the latest trends in those areas, it chief executive says. Its in-house designer team comprises 20 designers. The company says it is also investing heavily on developing new products such as newer varieties of wrinkle-free apparel.
Other prominent exporters in the country include Gokaldas Exports Ltd, V&S International Pvt. Ltd, Orient Craft Ltd and Ambattur Clothing Ltd.
On Friday, shares of Aditya Birla Nuvo closed at Rs1,350.10 on the Bombay Stock Exchange.
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First Published: Mon, Apr 14 2008. 02 16 AM IST
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