Sharing my notes:
From MD Speech:
A little disappointing year. We expected and had announced on growth, we had planned for automation. We wanted to do it on sewing side- people rarely do this. We wanted to do this because of labour issues. See China and their labour problems. People are not qualified- education is improving. Issue is not of salary its just that they don’t want to work as they have to sit for 8 hours on stool so they don’t want to work for long. if they cannot survive for first 6mnths-1yr-2yr, they move out, else they stay. New generation wants more freedom. Its not a big issue for us as of now but in next 10 years it may be a problem. So we wanted to double without increasing people. But, it didn’t work. Its not that machine is not working. Its a famous company in Atlanta they do automation for jeans companies like levis etc. They don’t have ready machine for children. Machine speed is 9000 stitches per minute but in children speed is 1000 per minute. Our research dept. is working for 3 yrs on that. We lost 1 yr - automation is successful its on the way in transit. in Q2, one set of machine will come. The machines are very expensive.
Before sewing there is cutting, expecting this automation we hired people and trained them so we could not utilize labour.
From 10% PBT we touched 30% PBT. No one can touch 15% PBT globally. Unfortunately, we came down due to these unexpected things. we are confident of coming back.
We started US operations in Nov16. Our Co works with big companies like JC Penny, Gerber, ToysRUs etc. We could launch our brand in US. We could get in 3 big customers-> walmart, amazon, target. We are expecting good demand. Garment is sold by season. Today what we are selling is for june, july 18. Result will take some time. Once our goods are in stores people will buy they will come back. It will take 3-4 years, then sky is the limit. Initially, its an issue. There are no people in organic clothes. Other people are selling regular stuff. 0-2 is very sensitive age and people prefer to buy organic. we feel this concept will do very well. once we are established, we can break the existing market.
We won 1st vendor award from ToysRUs. We got award in 11,12 and have been consistently in top. 2016 we got the award again. there are 220 vendors. Hearing same from Gerber of being the best vendor.
Another bad thing happened is dollar- its a short-term issue as we have a very clear understanding with customer to adjust for currency or cotton in next season order.
We have good relation with all these top people/Co.
2020 is the real goal.
KCL will be listed and merged (can’t commit on the timeline).
You all invested with lot of trust- we won’t let you down. 2020 is the real goal.
* We started business with Carter. Its a listed Co. They also have to manage inventory so some of the shipments happened on 2nd april instead of 31st march.
* Inc in processing charges-> sometimes machinery breakdown etc happens so we do job work from KCL. We pay just 6-8 Rs. per pc.
* Last year we tried to automate the sewing area but the machine today are for bigger size but we are in 0-24 months. So this machine has to be customized. So they started developing some changes but they couldn't fix it.
* We thought we could do automation but unfortunate that there were some problems. We are in continuous discussions and R&D and hope for better outcome in coming months.
* Didn't do concall as had US travel at that time and the schedule didn't match.