Indian home textile exporters have fought off Chinese competition to become the leading foreign suppliers of towels to the USA, according to a report in the latest issue of Textile Outlook International.

Home textiles have emerged as one of the most dynamic product segments in India’s textile export industry. Exporters have been focusing on the US market in particular -- partly because of its large size, and partly because of the rapid decline in competitiveness of US home textile companies. As a result, India has become the USA’s leading foreign supplier of towels with a 19% share of the US market during January-September 2005. It has also become one of the top three foreign suppliers of cotton sheets with an 18% share of the US market.

India’s success in home textile exports stems largely from the presence of a few dynamic companies with a strong focus on this sector. Such companies include Welspun India, Abhishek Industries and Alok Industries, which are India’s top three exporters of home textiles. All are relatively young companies, having started operations after the mid-1980s. The entrepreneurs leading these three companies have strong global ambitions and have invested in state of the art manufacturing facilities. Spurred by their global ambitions and buoyed by their export success, all three companies are now in the midst of implementing large expansion programmes which are due to be completed in 2006.

Welspun India is the largest Indian producer and exporter of terry towels. In fact, terry towels accounted for 80% of its sales in 2004/05, although the company also makes cotton yarn and bed linen. Welspun has been aggressively expanding its operations -- mainly through growth in exports, which constitute over 90% of revenues. Major components of Welspun’s expansion strategy include an increase in capacity, the establishment of a subsidiary in the USA, and efforts to move up the value chain by selling innovative and differentiated products. As a result, Welspun has emerged as the largest overseas exporter of terry towels to the USA.

Welspun’s plans are to develop into a diversified home textiles giant. In particular, the company’s aim is to be among the top five home textile players globally by 2008. Eventually, its vision is to rank among the top three players.

Abhishek Industries is the second largest producer and exporter of terry towels in India, after Welspun. Again terry towels are the company’s main product with 46% of its total sales in 2004/05 -- although Abhishek also makes yarn, writing and printing paper, and sulphuric acid. Abhishek has been treading a similar path to that of Welspun, including an aggressive expansion of capacity, the establishment of subsidiaries in the USA and Europe and an emphasis on value added terry towels.

However, Abhishek is also attempting to reduce its dependence on the US market by increasing exports to Europe and Australia. In addition, it is trying to "derisk" its business by locating new customers in the USA and Europe.

Alok Industries is a large integrated textile player with operations in almost every segment of the textile chain, including weaving, knitting, yarn texturing and processing, embroidery, home textiles and apparel. Alok entered the home textiles business segment as recently as 2003. In previous years, its direct exports were relatively small, although it was indirectly involved in exports by supplying fabrics to Indian apparel exporters. However, direct exports are now a key focus for the company. Furthermore, home textiles, consisting of bed linen, have played a major role in Alok’s export efforts. This business has been expanding rapidly and has acted as a growth engine for the company. As a consequence, Alok has already emerged as the second largest overseas exporter of bed sheets to the USA.

As part of its thrust on home textiles -- which are produced almost entirely for exports -- Alok plans to raise the share of home textiles in its total sales from 17% in 2004/05 to 43% by 2007.

In the race for market leadership, China has surged past India in the apparel market. But in home textiles, the battle is likely to be a close one in the coming years.