T.T. Limited to Recover Fast from Textile Industry’s Turbulent Period
The entire Textile Industry all over India and in fact world over has faced probably the worst period in history. Export as well as Domestic demand had dried or zeroed almost all over. As the country got cleared COVID 19 issues, 250% rise in cotton price, rise went uncontrolled, Ukraine – Russia War slowly engulfed directly – indirectly the entire world. Petrol prices, energy and food crisis, recession in USA and Europe, continuous impact of COVID in China, War clouds on Taiwan and many more reasons have damaged the economies.
- Cotton prices in India suddenly spurted from Rs.36000/- in previous year to Rs. 65000/- to 70000/candy in March 2022 to an all time high of Rs.110000 in June 2022 and then fell back to approximately Rs.65000 in October. This made Indian cotton most expensive in the world and cotton yarn exports from India came down by more than 50% and first time Vietnam and China yarn was imported by India as against India position as the leading cotton yarn exporter in the world.
- This all time high volatility lead to huge inventory loss across the textile value chain as before the higher cost could be passed on, the fall started.
- The extreme volatility, the high inflation across the globe, Ukraine war, China continuous COVID impact has lead to an unprecedented fall in global and domestic demand for textile products. Such a sustained poor demand scenario has not been seen even in 2008-09, 2011-12 and COVID period and has majorly impacted the industry
- A stagflation situation has arisen where costs have zoomed, but buyer refusing to buy at higher prices leading to fall in production, huge pressure on margins, and contribution to fixed overheads falling.
- The price unwinding after a 2 year rise in all raw materials post COVID is expected to be completed in next 2-3 months, after which buying volume and margin is expected to normalise and demand should pick up due to higher consumption and pipeline inventory getting built back once confidence returns to market that prices are stable and products are affordable.
- Q2 irrespective of the unprecedented volatility and inflation, is always the poorest quarter from both demand and margin perspective.
- In such a state of affairs, T.T. Limited executed best possible to control losses to minimise and has suffered considerable loss of turnover and profits. However losses have now been halted and in Q3 & Q4, T.T. will endeavour to clear the mud collected in Q2.
- Things have started getting better from October but would take some more time for things to normalise. An excellent Cotton Crop and a good winter with quick stability in prices would go a long way to get back the confidence of the buyers.
Sanjay K. Jain
Managing Director
T T Limited
Date: 02.11.2022
Dear Shareholders/Stockholders, Banking, Finance and Corporate World:
All of you are aware that mankind has never ever faced crisis like CORONA pandemic. It is a grave crisis period and all of us salute to Modi Government, their administration, medical staff, police and paramedical staff, volunteers acting as Corona Warriors.
I take this opportunity to update status of your company, T T Limited, during such crisis period. You would be glad to know that I have personally assured all our employees, workers, staff and ex- employees that if they require any additional help in this crisis period, we would be able to offer them all the possible help till the crisis last. They should remain safe and should not face any crisis because of lack of money in their hand.
We have been successful in making some export out of available stock even during the lock down period. We are contacting our debtors to help us in this period of crisis by remitting to us as much money as they can and as soon as possible so that our financial status remains solid.
We have assured our creditors and we have already started making payments to them and soon we would be able to make most of the pending payments as some foreign payments are in the pipeline as some documents pertaining to inwards foreign remittances are available with us and in a few days’ time we will present the same to our bankers. You would be glad that our bankers are helping us a lot during such crisis period by accommodating us and fulfilling our requirements as per Government of India and RBI guidelines and we are sure that we would be able to cross through this crisis period strongly.
Your company has started manufacturing at Gajroula (Uttar Pradesh) and producing health products like masks, allover bodysuits, shoe covers for medical purposes (categorized as “essential goods”) and many more health products are underway to develop very soon and this has been made possible by necessary initiative and help of the local administration and Government of India, Health Ministry as well. We are diversifying in export- import trade to pick up such opportunities as they arise during such crisis period instead of sticking to and waiting for our garment business and textiles business to pick up and recover totally.
Our factory in Gajroula is likely to start very soon to produce normal products as the government is allowing as we have most of the workers inside the factory campus. Similarly, we would be able to start manufacturing activities at our Gujrat factory from 20th April, 2020 with workers staying in house campus and we have received export orders for good numbers of containers for yarn exports. Pipavav Port, Mundra Port and Kandla Ports are open to us for availability to dispatch goods.
Tamilnadu factory is likely to start very soon as soon as the government passes permission and we have sufficient number of workers residing in side the campus. The situation of Corona Virus is somehow grave in the state of Tamilnadu. The number of patients has gone up recently and therefore the local administration and the government are taking some more time to allow permissions.
You must be assured that our product policy is being changed as per the requirement of the time to diversify in to import-export business and to encash other opportunities in such period of changes which the whole world is witnessing. We wish mankind should be free from this kind of never before pandemic and everybody should stay at home to keep themselves and their family safe and those who are operating in our factories or elsewhere and corona warriors, should take necessary care as per health guidelines. Our company, managers and the management are making all possible help and arrangements to ensure that health guidelines are duly implemented in practice by our staff, by our workers and our managers, our customers, carriers, couriers and transporters.
Thank you and we would keep you updated from time to time so that you are fully aware about the status of your company.
Thank you for your co-operations.
Dr. Rikhab Chand Jain Chairman
T T Limited
Date 17.04.2020