Vardhman Group of Companies

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Vardhman Group is a textile group based in Ludhiana, Punjab, India. Vardhman Group was established in 1965. The group is engaged in manufacturing and trading in Yarn and Processed Fabric, Sewing Thread, Acrylic fibre and Alloy steel. Vardhman group was incorporated in 1962 as Vardhman Spinning & General Mills (VSGML). The company was promoted by VS Oswal and RC Oswal initially and is now headed by S. P. Oswal. [1] The total number of employees in the company as of April 2011 is 23,000.

Contents

Group companies

The group is structured in such a way as to have a central holding company that is used for investing in the different group companies. The holding company in this case is Vardhman Holdings limited and the group companies are Vardhman Textiles (61%), Vardhman Industries (65%) and Vardhman Acrylic (60%). Vardhman textiles in-turn has holding in VMT Spinning (73.33%), Vardhman threads (100%) and Vardhman yarns and threads (11%).

Products

Some of the important products of Vardhman group are: simple and blended yarns, acrylic fibre (brand Varlon), range of threads (apparel sewing, tea bags, industrial threads, etc.), shirting and trouser materials, forging and automotive components and steel.

Export history

The company started exporting from 1990–91 and it exports mainly to Spain, UK, Germany, US, Japan and some African and E.Asian countries. Exports account for 22% of the group's revenues.

Analysis

Strategic analysis: 1. The group has a unique business model with presence in entire value chain from Fibre to Fabric this gives it the company the flexibility to reorganize their business effectively during down turns and ramp up faster than competitors when the economy is buoyant. 2. The group has a large cotton inventory holding capacity thus helping it to control its supply chain operations and thereby absorb fluctuations in market demand. 3. In order to build a competitive advantage, the group has been continuously working on improving its capabilities continuously and diversifying from its core Yarn and fabric business. The groups foray into Steel is a good example of this.

Financial analysis: 1. Sales growth - An analysis of the gross sales of the company between 2004-2009 shows that sales of the company is growing at an CAGR of 9.5% 2. Sales Vs Profit Growth - Analyzing the gross sales and PBT ratio, while the sales is growing at 9.5% CAGR the PBT is decreasing from 11.5% in 2005-2006 to 4.3% in 2008-2009. If the businesses are ranked in terms of profitability the order would be as follows: Yarn, Thread, Steel and Fabric.

CSR initiatives

The group has been active in multiple educational and general wellness initiatives. Some examples are given below: 1. Setting up Sri Aurobindo socio-economic and management research institute, setting up commerce and management colleges and schools 2. Active participant of Village Culture Adaptation program at Punjab to increase the cotton yield per hectare and the program was a huge success. Started similar village adaptation program in MP and till now 2 villages have been adopted.

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S. P. Oswal is an Indian industrialist and the present head of the Vardhman Group name="Vardhman">"Vardhman". Retrieved 11 August 2014.</ref> The Government of India honoured him in 2010, with the Padma Bhushan, the third highest civilian award, for his services to the fields of trade and industry.

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Cotton production in Pakistan is integral to the economic development of the country. The nation is largely dependent on the cotton industry and its related textile sector, and the crop has been given a principal status in the country. Cotton is grown as an industrial crop in 15% of the nation's land during the monsoon months of May to August, known as the Kharif period, and is grown at a smaller scale between February and April. Record production of cotton was reported at 15 million bales of 470 pounds (210 kg) each in the form of phutti during 2014–15, which was an 11% rise compared to the previous season (2013–14). Production-wise, as of 2012–13, Pakistan occupied the fourth position among the cotton growers of the world, the first three being China, India and the United States, in that order. In respect of exports of raw cotton, Pakistan holds third position and is the fourth in consumption. It is the largest exporter of cotton yarn.

Ludhiana is Punjab, India city's and largest industrial hub. It is the biggest city north of Delhi. It is known for hosiery and bicycle manufacturing.

References

  1. ↑ "S. P. Oswal" . Retrieved 11 August 2014.
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