Dear Esteemed Shareholders,
Thank You for your unwavering confidence in S.P. Apparels Limited
(SPAL). I am pleased to share my thoughts on the past financial year and chart the course
for future. Our dedication is to steer with intention and expand with accountability. We
will uphold eco-friendly initiatives and prioritize the I welfare of our workforce,
clientele, and the wider community. My thanks go out to every one of our stakeholders for
their consistent support.
The Indian textile industry is undergoing a shift in market dynamics as
the global focus turns to the "China Plus One" strategy. This approach is
prompting a diversification of supply chains away from China.
Moreover, current political challenges and the escalation of labour
costs in Bangladesh are prompting various players to reassess their heavy reliance on the
region and to consider for alternatives; which favours India and Sri Lanka. These
macroeconomic shifts have placed us in a beneficial spot, with a significant surge in
demand from industry players to expand operational capacities to meet the growing demand.
The increased export interest, along with the trust and reputation SPAL has built with its
clientele, underscores the substantial opportunities that await.
We are positive about capitalizing on this shift and are adopting a
strategy to enhance our operations, leading to better utilization and increased
production. In addition to optimizing our current resources, we are also continuously
exploring to acquire new facilities to grow and diversify our output.
During FY24, we have incorporated a subsidiary in Sri Lanka as there is
availability of ample ideal capacity and skilled workforce. Initially, we will use an
asset-light model, establishing strategic partnerships to support our operations and
gradually expand this business. We have already seen interest from customers ready to
place orders with our new entity. This area offers a notable opportunity for growth in the
coming times.
I am proud to announce of our recent acquisition of Young Brand Apparel
Private Limited including a garment manufacturing unit in Palladam and a plot of land at
SIPCOT. This strategic move broadens our portfolio into the intimate wear and is in
perfect harmony with our objectives of diversification and boosting our export
capabilities. This integration of Young Brand with SPAL's garment division paves the way
for cross-selling opportunities between customers of the SPAL's garment division and Young
Brand. Looking forward, we anticipate a promising increase in the profit margins of Young
Brand Apparels.
With regards to our various segments, our spinning segment underwent
turbulence, yet we anticipate astable performance going forward. The Garment Division is
now producing intimate wear by the addition of Young Brand and we are excited to announce
the commencement of operations of our new facility in Sivakasi in the second half of the
financial year 2025. The SPUK segment is set for robust growth with a revamped team and
clients. Meanwhile, our Retail division is strategically exiting from the unprofitable
HEAD brand to concentrate on enhancing Crocodile and Angel & Rocket, with the goal of
reaching a break-even point in the foreseeable future.
We are deeply committed to the principles of sustainability,
recognizing the importance of environmental stewardship in today's global landscape. We
have taken a proactive stance by setting an ambitious target to achieve carbon neutrality
by the year 2033. This commitment involves a comprehensive strategy that includes reducing
greenhouse gas emissions, implementing energy-efficient processes, investing in renewable
energy sources, and pursuing carbon offset initiatives. By striving for carbon neutrality,
we aim to minimize our ecological footprint and contribute positively to the fight against
climate change, ensuring a healthier planet for future generations.
The company is excited to introduce ESOPs for the first time,
recognizing and rewarding the hard work and dedication of its employees. This initiative
reflects our commitment to sharing success and fostering a sense of ownership among our
team.
Looking ahead, the garment division is set to grow with the new
capacity in Sivakasi and better use of existing resources. The Sri Lankan subsidiary is
drawing customer interest and is expected to significantly boost growth. The Young Brand
acquisition is poised to positively influence our business. Moreover, the SPUK and Retail
divisions are on track to reach break-even. Together, these developments are laying the
groundwork for strong growth in thefuture.
I extend my heartfelt gratitude to all our stakeholders, robust network
of suppliers, dedicated management team and to each employee for their steadfast support.
Thankyou for your continued trust in our vision and for joining us on this journey of
growth and transformation. I look forward to sharing our continued success in the years to
come.
Thank You Sincerely
Mr. P. Sundararajan Chairman and Managing Director