Spearheading a company which has run into a deep controversy to regain its past glory is the stuff of great leadership quality, and Dipali Goenka, chief executive officer and joint managing director of Welspun India surely knows how to do it. When the Egyptian Cotton scandal hit the news, it was believed that the multi-billion dollar company might lose its goodwill and credibility in the market. But Goenka's sharp business sense, hard work and leadership skills helped the towel and bedding giant to maintain its brand equity.
Goenka, a graduate in Psychology and degree holder in Owner/President Management Program from the reputed Harvard Business School had earlier said that she took the 'Egyptian Cotton' issue quite seriously as the company lost over 30 per cent of its market value after US retailer Target severed business ties last August alleging that Welspun had passed off cheap sheets as premium Egyptian cotton. Subsequently, Walmart, its other major client also pulled out its hand from Welspun.
The impact of the scandal was enormous, as it clocked a Rs 148-crore loss in the second quarter of fiscal 2017, as compared to a profit of Rs 179 crore in the same period of fiscal 2016.
To overcome the scandal, the company proactively engaged with its stakeholders, appointed global accounting firm EY to thoroughly examine the supply chain and took remedial steps including structural, procedural, people and technological measures. Welspun struck a five year logo licensing deal with Cotton Egypt Association to use the Egyptian cotton mark. All the hard work is surely paying off.
The home grown company reported a 17.27 per cent decline in consolidated net profit at Rs 150.24 crore for the third quarter ended December 31, 2016. It had posted a net profit of Rs 181.61 crore in the same period of the last financial year. Its income from operations in the quarter under review stood at Rs 1,500.85 crore, up 3.85 per cent, compared with Rs 1,445.13 crore in the same period last year, Welspun India said in a BSE filing.
Under Goenka's leadership, Welspun became the largest exporter of home fashion products and the largest in the terry towel business globally. Welspun is the leading supplier to 14 of the top 30 global retailers in the world and has been recognized as the largest Home Textile supplier in the US for the fourth consecutive year in a row. Welspun is among the top 3 home textile (towels and bed sheets) firms in the world, and is the official supplier of towels to the Wimbledon and Australian Open tennis championships.
The company recently launched SpinTales, a new line of products with patented augmented reality storytelling technology, for kids. By scanning the specified markers on the rug or duvet, using a tablet or smartphone, children can view characters in augmented reality.
The company has planned a capex of Rs 800 crore in FY17, which includes Rs 300 crore carried forward from FY16. The company is looking to expand its production capacity. The towel capacity will go up to 70,000 tonnes from 60,000 tonnes; sheet capacity to 92 lakh metres from 72 lakh metres, she added. The net debt has gone down by Rs 500 crore and the comapny aims to be debt-free by 2020.
Goenka is also an icon when it comes to giving back to society. She is empowering women in different communities with a brand called Spun that actually is by the women, for the women. Dipali initiated the set-up of Welspun Vidyamandir High School, a school affiliated under Central Board of Secondary Education and Welspun Anganwadi, a pre-primary school in Anjar, Gujarat, India.
BW Reporters
The author is Senior Correspondent with BW Businessworld
