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Published on: April 20, 2022, 2:44 p.m.
Nandan Terry’s towelling success
  • Ronak: betting big on quality

By Lancelot Joseph. Executive Editor, Business India

Ronak Brijmohan Chiripal, 32, wanted to be an entrepreneur right from his college days. “Finance was never a problem as the Gujarat-based Chiripal family has been running a well-established textile group for close to three decades,” he says. Having earned a bachelor’s degree in Information Technology from Nirma University Ahmedabad, he went to Syracuse University, New York, for an MBA in Finance and Entrepreneurship.

Back home, in 2014 he joined the family business and the processing plant of Chiripal Industries Limited to learn the ropes of the business. He decided to take the plunge and set up Nandan Terry in 2016 as part of the family group. His first dispatch was to Acme Housewares Pvt Ltd with an invoice dated 1 November 2016. Acme continues to buy towels from Nandan Terry.

The Ahmedabad-based Chiripal group has a presence in industries such as textiles, education, real estate, packaging and chemicals and offers a wide spectrum of manufacturing, contract manufacturing, trading, distribution and service-related activities in sectors like textiles, education, packaging, infrastructure, petrochemicals, etc. “Today, we are a fully vertically integrated company manufacturing terry towels and towelling products,” says Ronak, the CEO of the company.

To meet the market, Nandan also outsources finished towels and woven fabric which further undergo the CSP (Cutting, Stitching, Packing) process at their  unit. The company also sells cotton yarn manufactured at its units and woven fabric cloth in the open market. Nandan’s five plants in Gujarat cater to the manufacture of terry towels and towelling products in the B2B segment. Nandan sells its products abroad, including in the US, Canada, Israel, Germany, Hong Kong, Sweden, United Kingdom and Australia.

“This has been possible only due to strict compliance with internal quality control and international standards of quality,” explains Ronak adding that “the company is certified by some of the most reputed global certification agencies for our quality, environment consciousness, labour practices, our processes and customer services such as OEKO-TEX, SEDEX, GOTS (Global Organic Textile Standard), SA 8000, etc”.

“Nandan Terry’s revenues from operations for the period ending 30 September 2021 were Rs501.81 crore. For fiscals 2021, 2020 and 2019 it was Rs538.52 crore, Rs429.38 crore and Rs322.16 crore respectively,” says Anshuman Srivastava, CFO.  The EBITDA for the period ending 30 September, 2021 was Rs70.11 crore and for fiscals 2021, 2020 and 2019 it was Rs86.82 crore, Rs61.84 crore and Rs50.54 crore, respectively,” he says.

The pandemic outbreak caused an economic downturn on a global scale, including closures of many businesses and reduced consumer spending. There was significant market disruption and volatility. The demand for Nandan Terry products was also hit but production and sales resumed quickly as lockdown restrictions were eased. “During the second wave, the lockdown did not halt operations and the factories ran at 75-90 per cent capacity after lockdown,” says Srivastava.

Proactive steps

Due to an increase in hygiene-related product consumption on account of Covid-19, the market for towel and towelling products has improved and has continued to stay robust with respect to demand. The same applies to the international market. “The company managed to take proactive steps to ensure that the business loss was regained in the forthcoming quarters and we continue to closely monitor the impact that Covid-19 may have on our business and results of our operations,” he says.

The company has the advantage of the nearly three-decade-long strong foundation laid by Ronak’s uncle Vedprakash and father Brijmohan Chiripal who are also on the board of directors. “Their extensive knowledge and understanding of the domestic and global textile business environment, their expertise and vision helps us to organically scale up our business,” observes Ronak.

Vedprakash, Chairman of Nandan Terry who set up the family business, is also associated with CIL Nova Petrochemicals Limited, GSL Nova Petrochemicals Limited, Chiripal Industries Limited, Nova Petrofils Limited, Dholi Spintex Private Limited, Chiripal Lifestyle Limited, Picasso Flexibles Limited, Chiripal Energy Limited, Argentum Flexipack Private Limited, Nav Srajan Projects Private Limited, Shanti Innovation and Research Foundation and Shanti Academic Private Limited as director.

Nandan Terry uses the latest technology and machinery procured from major suppliers in India and abroad. The Plant Dholi Spinning Park, Ahmedabad, is equipped with 102 looms out of which 24 are Jacquard looms and 78 Dobby Looms. The processing section is equipped with the latest machines in the finishing section to make the perfect towel. Ronak says even the folding and packing processes are carried out on the latest machines. These modern machineries also help in maintaining high quality standards and precision.

Nandan enjoys the benefits of incentives under the Gujarat Textile Policy 2012 which offers various benefits such as power tariff subsidy, interest subsidy and VAT concession, says Brijmohan, managing director of the company. He is also with Chiripal Industrial Park Private Limited, Red Events India Private Limited, and Prizm Club Limited as director and with Nandan Denim Limited as additional director.

Fashions change fast. Towels are no exception. Retailers are keen to have fresh colours on their shelves to cater to their needs. Hence, Ronak says the company will continue innovating in towel design and product development with an increased focus on self-developed, technology-driven OSMOSE towels which provide better functionality and aesthetics on account of their superior quality.

“I used to do a lot of travelling before the pandemic to be personally in touch with my clients and look forward to resuming my physical meetings,” says Ronak who launched periodic newsletters for his trade partners.

India is one of the major exporters of textile products while developed economies such as the US and Europe are major importers of textile products. New technologies are constantly being developed for the various processes of manufacturing and Nandan has invested in the latest available technology, plant and machinery to ensure that its manufacturing processes are up to date. “We will continue upgrading our technology to keep ourselves competitive and efficient,” he says.

Total Indian apparel exports in FY19 were $16.1 billion which dropped to $12.3 billion in FY21 as a consequence of the pandemic. However, it is showing sequential growth now on a month-on-month basis as per the report of ICRA on India’s apparel exports. The trade war between the US and China and the global trend of opting for the China plus one strategy is seen as a big opportunity for emerging economies.

Eco-friendly

A keen environmentalist, Nandan pushes his company management to take special care of the factory environs, plant trees, reuse water and save electricity. Sustainable materials such as linen, hemp, Tencel and organic cotton are used in the manufacturing process, ensuring products and procedures do not harm the environment in any manner.

As per the annual report of the Ministry of Textiles for 2020-21, India is the sixth largest exporter of textiles and apparels in the world, preceded by China, Germany, Bangladesh, Vietnam, and Italy. India is known worldwide for many products, including cotton yarn, fashion garments, hand-made carpets, etc. The Indian textile and clothing industry is one of the mainstays of the economy and its share in total exports stood at 11.8 per cent in 2019-20 while its share in global trade in textiles is around 5 per cent.

The US and Europe are major textile export destinations for India, with around 50 per cent share in total exports. This sector is critical from an employment perspective as well where it is the second largest employment generating sector, next only to agriculture, providing direct employment to around 45 million people and indirectly to over 100 million people. Women constitute a major part of the workforce so this plays a critical and pivotal role for women empowerment and the overall social development of the country.

Nandan Terry is going public and has filed a draft red herring prospectus (DRHP) with market regulator SEBI; it plans to raise Rs255 crore through its initial public offering (IPO) and use the proceeds for part or pre-payment of loans to the extent of Rs35.6 crore. The remaining amount will be used for funding working capital requirements and general corporate purposes.

Nandan Terry’s revenues from operations for fiscal 2021 stood at Rs538.52 crore, a 25.42 per cent year-on-year increase compared to Rs429.39 crore in fiscal 2020, primarily due to the increase in sales of towels and towelling products, and cotton yarn. Its annual profit for fiscal 2021 stood at Rs23.38 crore, which increased from Rs1.22 crore. For the six months ended September, its revenue was Rs501.81 crore and profit Rs30.62 crore.

Holani Consultants Private Limited and BOI Merchant Bankers Limited are the book running lead managers for the issue and Link Intime is the registrar.

“Remaining flexible and responding to consumer tastes is one of our USPs and we shall maintain that”, says Ronak as Nandan Terry plans to increase its global footprint. “We also intend to focus on providing a sustainable range of eco-friendly towels with Global Recycle Standard (GRS) certified Polyester Yarns and natural fibres,” he says.

Ronak, an avid follower of football and a die-hard Chelsea FC fan, plays the game at times. Will he be the game-changer in the towel business? “Good quality, a very customer-centric and very flexible company – that is my vision for the company for the next five years,” he says.

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