Business conglomerate Welspun Group, with a major presence in India and global markets, is now focusing on the domestic market and expects to garner Rs 30,000 crore in revenue in the next three years, a 50% increase from the present Rs 20,000 crore. The group is also looking to raise a Rs 2,000-crore warehousing and logistics fund that would be used to build 25 million sq ft of warehousing capacity, Welspun chairman BK Goenka tells Rajesh Kurup in an interview. The group also expects to commence production of oil & gas from its own fields soon. Edited excerpts.
How will the acquisition of Sintex aid the group’s overall strategy of increasing presence in the domestic market?
The whole acquisition process is over, and Sintex is now a wholly owned subsidiary of our pipe company Welspun Corp. Our aim is to capture the domestic market with various products as we had primarily focused on export markets. Sintex is a household name with a good recall value. The company went into insolvency due to other reasons, as the group, which had other businesses, was not doing well. We think there is a lot of potential in the business, and expect to garner back its lost market share over a period of time.
You had also taken over the assets of ABG Shipyard through the insolvency process. How do you plan to merge it with the group?
It had good assets of about 150 acre of land and one kilometre of water frontage. This is a related business, as we are already into steel welding and fabrication of pipes, among others. This is not a new thing, but we are still exploring whether we should venture into repairing, manufacturing or recycling of ships. The usage of assets is not yet defined and it would take another 3-6 months for us to decide on a concrete plan.
Are you looking to acquire further assets through the insolvency process?
We are not actively looking for anything. We have acquired these two companies and we are focusing on establishing these two businesses including the new ones such as flooring and pipes.
What are your plans for the consumer facing businesses such as textiles and flooring?
Welspun India’s main businesses are home textiles, bed and bath, and our ‘Spaces’ brand is almost growing at 20-25% per annum. On Spaces, we are targeting revenues of `1,000 crore in the next three years from domestic markets, and increase the total number of outlets to 50,000 from the present 12,000. Flooring is another business that will take off and we intend to take a small pie of the total `40,000 crore market.
What are your plans for the oil & gas assets?
We have an oil & gas asset, held as a 65:35 JV with Adanis. Under the JV, we are conducting exploration activities in Bombay High and Kutch. We expect to start flowing the gas in the next three years.
Under your ‘inward-looking’ policy, what are the changes you would bring in?
Till date, our major revenue of about Rs 20,000 crore was primarily coming from the exports market, with Welspun India contributing about Rs 8,000 crore, Welspun Corp Rs 6,000 crore and rest from other businesses. The next five years, we intend to focus on India. The takeover of Sintex was part of that plan, which also includes home textiles (Rs 1,000 crore in next three years), and flooring with a target of about Rs 500 crore in next three years. Warehousing is also big. We feel that in the next three years, our group turnover will rise to Rs 30,000 crore from the existing Rs 20,000 crore.
What’s the status of the warehousing fund?
We are building warehouses all over India, and our target is to construct 25 million sq ft of warehousing in the 3-4 years. This would be done by Welspun One Logistics. We are also looking to raise a Rs 2,000-crore fund (`1,500 crore fund with a Rs 500 crore green shoe option), of which the first tranche of Rs 500 crore has already been raised. The remaining will be raised in the next two months. The funds would be used for building warehouses.
You have invested `2,000 crore in Telangana, with a promise of another `3,000-5,000 crore. What are your plans for the state?
Telangana being a hub of IT and ITeS, our idea is to set up a proper establishment in the state. There are various activities we are looking at such as expanding our existing flooring business, and might expanding our plastic manufacturing facilities.
Any plans for expansion of manufacturing activities in global locales?
We are already in Saudi Arabia, the US and are exporting to various countries, but we don’t have plans to expand our manufacturing bases across global markets. Our next 3-5 years focus would be the domestic market, we are looking inward. Our vision of ‘Har ghar se har dil tak welspun’ is primarily to create the brand Welspun a household n