Interview with K. Ramachandran Pillai, NTC Chairman & MD.
K. RAMACHANDRAN PILLAI joined the National Textile Corporation in 2001, bringing with him three decades of experience in private and public sector companies such as HMT Ltd, Hindustan Latex Ltd and Bongaigaon Refinery and Petrochemicals Ltd (BRPL), a subsidiary of Indian Oil Corporation (IOC). In 2004, he became the Chairman and Managing Director (CMD) and took complete charge of the revival package for the company. The NTC has plans to double its capacity, from the existing 6.75 lakh spindles to 1.35 million spindles, and also forge ahead in modern retailing, he says.Excerpts from an interview he gave Frontline:
It is now almost a decade since the Board for Industrial and Financial Reconstruction (BIFR) approved revival schemes for all nine subsidiaries of the NTC. How do you recount the NTC's shift from a sick PSU to one on the recovery route?
The company has been implementing the BIFR-approved revival scheme for its eight subsidiaries since 2002-03 and for the ninth since 2005. The original sanctioned scheme (SS) of 2002-03 was modified twice in 2006 (MS-06) and in 2008 (MS-08).
Under the scheme, the mills that were found viable after a techno-economic viability study were proposed for revival, while those found unviable were to be closed. The original scheme envisaged the closure of 66 unviable mills and the revival of 53 viable mills. The NTC has so far closed 78 mills. As of December 1, 2011, as many as 62,747 employees have opted for MVRS [modified voluntary retirement scheme] since April 2002, and the NTC has paid Rs.2,330 crore by way of compensation in all. The NTC has reduced the number of its employees from 80,000 to about 8,000. It has also closed 193 unviable showrooms of its retail marketing division.
Mobilising the required funds for the scheme was difficult. The NTC generated Rs.2,200 crore by private placement of bonds in 2003 and the sale of five of its mills in Mumbai in 2005, after a protracted legal battle. This gave the impetus to take the scheme forward.
The sale of assets has been a challenging job, which was carried out in a very professional and systematic manner on the basis of guidelines issued by the BIFR.
How did the MVRS help revive 24 NTC mills? Has the NTC emerged fitter and leaner to face competition now?
In these times of cut-throat competition, it is important for an organisation to have a strong control over costs. The MVRS helped us to bring down the cost of human resource to ideal levels. The NTC now stands tall in the market as a much leaner and fitter organisation. I believe that this new identity will inspire all of us to achieve our dream of being the No.1 clothier to the nation. With 24 mills powered by state-of-the-art equipment and with over 8,000 dedicated employees, I am sure we will soon achieve our goals.
How are you realising proceeds from the sale of land to fund modernisation of the mills?
For the first time in Indian history, the NTC sold its prime lands in Mumbai and Gujarat through e-auctioning, a fully transparent system permitting parties to improve bids through reverse auction. The company has sold assets worth Rs.6,480.71 crore and funds are being utilised for the revival scheme.
The company runs 24 mills directly and five under joint venture with the private sector. It has so far spent Rs.964 crore, out of a total of Rs.1,156 crore, for the modernisation of 22 mills. The modernisation of 18 mills has been completed. The BIFR approved the relocation of four mills at Achalpur (Maharashtra), Hassan (Karnataka), Ahmedabad (Gujarat) and Udaipur (Rajasthan).
These projects have transformed the company into an integrated textile company, as all the three relocated mills are composite.
The NTC has completed the process of revival of five joint venture companies and they have started activities in a big way for garmenting and workwear, design, denim products and so on.
In order to conserve energy, the NTC has engaged two energy firms, namely MITCON Consultancy Services Ltd and BEC Energy Management Systems, as consultants to study and suggest measures to save energy in all forms. Apart from this, Voltas has taken up projects in the NTC to study, identify and implement energy conservation.
How are the NTC-owned retail outlets across the country doing and what are the plans being worked out to make them competitive?
Being an integrated organisation, the NTC had strong brands like Finlays and Entyce on the retail front. Now we plan to launch the Value for Money shirt brand and home textile brands. We have successfully launched our own line of denim jeans called NTC classic denims.
Also all NTC showrooms are being revamped into modern retail outlets. We have started the process and plan to finish it this financial year. The NTC plans to be a one-stop shop for the entire family.
You have been in the saddle at the NTC through thick and thin. Can you list the weaknesses and opportunities for this public sector company in the years ahead?
Being a public sector company, it is our responsibility to bring profits for the government and also fulfil our duty towards the citizens by providing them with best-quality textile products at affordable prices. Apart from the Value for Money menswear brand, we plan to bring together indigenous designs and crafts under one roof at the NTC's proposed Brand India Stores (that is the working title) and make them available to Indian and international customers.
The Indian retail market provides plenty of opportunities. We plan to take the NTC to new heights in the Indian and international markets.