#flaxlinencongress16

#flaxlinencongress16

FLAX/LINEN,

THE SMART GREEN FIBRE

FOR BUSINESS

TRENDS FOR LINEN & INTERNATIONAL FINAL MARKETS

亚麻流行趋势与国际终端市场リネンの傾向と国際的な最終マーケット

Thomas VARGHESE

Business HeadADITYA BIRLA GROUP

INDIA

Emerging Indian Trends in Linen

C E L C A N N U A L C O N G R E S S -

M a d r i d

Points for Discussion

• Aditya Birla Group – Textiles & Apparels

• India Textiles & Apparels

• India Linen Market

• Linen Club : Investment in products and retail

• Expectations from CELC

A d i t y a B i r l a G r o u p

Aditya Birla Group - Textiles & Apparels

• World's largest player in the Viscose Staple Fibre industry

• The largest player of Linen yarn and fabric in India

• The largest fashion retail network in India - 375+ towns, 7500 points of sale, 5.6

million square feet of retail space

• 5th Largest manufacturer of Acrylic Fibre

• Quality leader in spun yarn globally

• Manufacturing plants across Canada, Sweden, China, Indonesia, India and

Thailand

• Dedicated R&D facilities spanning plantation to fashion

I n d i a n T e x t i l e a n d A p p a r e l

India Textiles & Apparels

India’s T&A industry was estimated to be worth USD 98 billion in 2013, including

both domestic consumption and exports, and is projected to grow at a CAGR of

9% to reach USD 233 billion, by 2023

Domestic, 2013,58

Domestic; 2018 (P); 89

Domestic; 2023 (P); 138

Exports, 2013, 40

Exports; 2018 (P); 60

Exports; 2023 (P); 95

Total Exports Domestic

98

149

233

CAGR 9%

(USD bn)

India Textiles & Apparels

• The Indian domestic textile and apparel market was estimated at USD 58 billion in 2013, and is

projected to grow at a CAGR of 9% to USD 138 billion by 2023.

• India’s textile and apparel exports are expected to grow at a CAGR of 9%, from USD 40 billion in

2013, to USD 95 billion in 2023.

USD 58 Bn

USD 138 Bn

9%

2008 2014 2020 E

15

29

58

India’s Linen Market

• The Indian domestic Linen market has consolidated its growth pace from the robust growth rates

witnessed in yesteryears and is expected to grow at a moderate pace in coming years.

Yarn (in MT) Fabric(in million

meter)

2008 2014 2020 E

4,000

11,500

30,000

15%

5%

14%

6%

2012 2016 2020 E 2012 2016 2020 E

29

37

17

7800

13500

16300

India’s Linen Market Outlook

• Linen Business is expected to grow by ~ 5-6% in next couple of years.

• Rupee depreciation coupled with reduction in other competitive fibre prices like

cotton are impacting the end price to consumer for linen products and hence

impacting linen demand. Further, current inventory levels at different stages in

value chain have also impacted the liquidity position.

• The growth in the Indian linen market has been supply led with more players

coming into the market, both fabric & yarn.

• Linen blends have gained popularity in market space due to lower prices and

making linen fashion accessible to mass markets.

L i n e n C l u b : I n v e s t i n g t o p r o m o t e l i n e n i n I n d i a

Linen Fibre

Linen Yarn

Linen Fabrics

Linen Apparel Retailing

Linen Fabric -Retail

Jaya Shree Textiles - Linen Value Chain

Strong presence in niche business - Yarn to Retail

Design Studio

State of the art modern design studio at Rishra to build on new

product development capability at Linen Club

Product developments : Adopting linen for popular product categories

• We have made efforts to develop a range of products while working with leading value chain players in

India.

• Some of the key products developed for Indian markets are : Sarees for women, Dhotis for Men and

Indian customer centered designs for stoles and other fashion accessories.

• There is a lot of focus given to final packaging and presentation to drive the premium image.

Linen Club Dhotis

Linen Silk sarees

Linen Club range of fashion accessories and apparel

Product Developments

Linen club offers fine counts in 80, 100 & 120

lea. The fine fabric in all its crumpled look

is the epitome of comfort for refined

consumer.

Linen Club - White for life with whiteness

index same for 20 washes. A wide range of

white dobbies and plains to chose from.

Chic & Slim White For Life

Product Developments

Widest range of offering in checks for

jackets, trousers or suits. Window pane or

tartan.

Linen wool or linen cotton blended with fine

counts for the new age formals

Checkered Look The Cross-over

Product Developments

From 60L to 100L prints for shirts and

ornamental prints for bottoms work well

Dobbies in 60L gives a rich feel to Indianattire

Prints Indian Influence

New product categories

• We have added a range of new products to

enhance linen fashion for the Indian market:

• Apparels

• Stoles

• Bags

• Belts

• Wallets

New product categories - Women’s wear

Sarees Designer Label

Linen Club – Enhancing consumer experience at Retail

Modern retail identity of Linen Club Stores

Linen Club – Elements of customer journey

• The retail journey for a consumer is designed to have multiple elements as she / he

moves through the store :

• Attract

• Establish

• Inspire

• Inform

• Engage

• Accomplish

Linen Club Customer Experience - Attract

• Initial Architectural and material interaction is not only exciting and enticing for new patrons and passers-by, but also iconic and memorable. It is easily recognizable for return customers and those familiar with LINEN CLUB

• Life style product displays as well as visibility of the store interior, hint at what is in store for potential shoppers.

Linen Club Customer Experience - Establish

• A welcoming first impression promotes recognition that Linen Club stores

provide a unique, service-based luxury retail experience.

• This is the opportunity for us to determine and cater to the specific needs of

clients.

Linen Club Customer Experience - Inspire

• The main product and its unique presentation acts as a gallery that delights

and surprises clients.

Linen Club Customer Experience - Inspire

• New, seasonal and promotional products are isolated and featured to

create a dynamic and fresh appearance. Customers may browse

independently or with the help of a knowledgeable salesman.

Linen Club Customer Experience - Inform

• A semi-private consultation area where selected product is inspected, provides

a comfortable place to interact and develops a better understanding of the wide

spectrum of product that Linen Club offers.

• Knowledge of the process and science behind various fabrics gives shoppers

confidence in their purchases and promotes repeat business.

Linen Club Customer Experience - Engage

• Once a customer has made their fabric selection, a process of personalization

begins.

• The store provides an atmosphere of a lounge and a studio.

• Clients can relax with friends or family members while measurements are taken

and garment style and fit are discussed and determined.

Linen Club Customer Experience - Accomplish

• In ceremonious fashion, the product is prepared, packaged and presented to the

client.

• As transaction area also serves as a concierge where customer loyalty is

encouraged by offering personalized services for garment finishing options/

information and storing customer size/ measurement information as well as

samples of previously purchased fabrics and garment preference.

O u r P h i l o s o p h y -W e a r e R e s p o n s i b l e

Sustainability – Our Focus

• Our employees are at the heart of our operations. We work consistently towards building aculture that empowers our employees, builds their confidence, and creates a positive workenvironment.

• We encourage diversity at the workplace and encourage those with varied skills, backgrounds,experiences and education levels to work with us

• We are an integral part of the region we operate in and wish to contribute significantly to itseconomy. We constantly engage with our communities and extend various skill developmenttrainings and focus on developing education and training centres and medical facilities in andaround the areas we are present in.

We believe that co-creation and stakeholder engagement go

hand in hand

Encouraging Girl Child Education- supporting Kasturba Gandhi School

CSR – Our Belief

G r o w t h f o r L i n e n v i a c o l l a b o r a t i o n

Linen Demand and profitability scenario

• Un-precedented drop in consumption of linen yarn in India

Linen YarnJan-Sep

2015

Jan- Sep

2016Drop Over LY

Quaterly Avg Demand ( MT) 9190 5500 -40%

• Demonstrating reduced demand for pure linen fabric

• Drop in prices of cotton / polyester leading to drop in both yarn and fabric prices of substitutes.

• Major producers in China & India have kept production running , skilled workforce employed,

despite low EBIDTA margins in current yarn prices. No major support has been forthcoming

from European farmers / scutchers / traders in terms of lower prices for flax.

• The purpose of this congress is get entire community of flax stakeholders working together to

support sustainable growth of flax industry. In last 4/5 years all players, specifically flax

growers as well as value chain have done well. It is imperative that in crisis situation today, we

need to come together to support each other.

• The congress will lose meaning if we do not follow collaborative working.

Immediate action areas

• The major consumption centres of China, India , Japan and Korea now account for

major share of European flax consumption. It is important that the congress

deliberate on how sustainable growth can be ensured in these markets.

• The crop of 2016 is a major worry in terms of quality. All major importers have been

consistently asking for drawing of standards of flax fibre including setting up of

scientific testing laboratories to test and grade fresh linen crops. No major progress

has been seen on this , over past few years.

• Getting new segments of consumption like home, women’s wear and technical

textiles in also a major need for the market.

In Summary

• Linen usage is coming under threat of substitution by cheaper fibers trying to imitate the linen look.

Popularity of linen blends is increasing by day, impacting total linen demand.

• Increasing manufacturing costs due to increase in cost of labour, power and flax will contribute to the

already existing gap between linen and other fibers such as cotton, viscose and polyester including

linen blends, posing a threat to growth of 100% pure linen category

• It is important that the industry players help each other by sharing and institutionalizing the process of

supporting each other with information and key initiatives:

• Modernization of machinery and automation of manual processes

• Initiatives for yield improvement and reduction of waste / losses

• Wastage reduction and better utilization of short fibers

• Improved maintenance practices to improve quality, uptime and cost of spares

• It is also important that collective investments to be made towards enhancement in downstream such as

better seeds, improving output per hectare of land and fibre quality

• Certification and classification of fibres to improve transparency is very critical

In Summary

• There are many countries where in linen as a category has not grown, allowing for great opportunity

for the whole industry

• A central body which can support market entry of linen players by providing key consumer insights on

fashion, industry requirements etc. and also connecting key value chain players will help the growth of

the whole industry

• Clear communication of benefits and differentiation of linen will only help us together.

• Currently many brands do not value the European Flax certification. CELC could work with leading

brands o make them aware of the European Flax certification.

T h a n k Y o u

#flaxlinencongress16