00:00How is business?
00:02Business is not bad.
00:04We're used to a lot of excitement.
00:08It's kind of inbuilt into our DNA now.
00:11So obviously there's been a lot of disruption with the Middle East.
00:14But ever since COVID, we've always found multiple ways of dealing with disruption.
00:20We're in the fashion business and our job is to bring premium fashion clothing to our consumers,
00:25no matter what disruption does to us.
00:28Most of your production facilities are in places where these are big energy importers,
00:35power costs are going up.
00:36Do you expect your costs to go up?
00:38Oh, absolutely.
00:39I mean, you look at a place like India, for example.
00:41I think consumer prices have already gone up 3%, 4%, 5% in a few months.
00:47Your inflation is up.
00:49Economic growth is already predicted to be slow.
00:51And this is only a ramification of the last 3%, 4% months.
00:54How much more could that market slow down?
00:57How much more foreign investment could subside there?
01:00So I think we're facing challenging conditions.
01:03There could be further challenges with gas, oil, insurance, premiums.
01:08So we have to find innovative ways in our company to get more innovative, to get more efficient,
01:14to bring in more automation, to digitize our company further.
01:18So we push our company to the hilt.
01:21And it's all about, at the end of the day, you know, we are not exactly in the luxury sector
01:27of the clothing,
01:28but we're in a very good sector.
01:30We make for customers like Uniqlo, where I have a lot of respect for their quality and the value of
01:35the product that they provide.
01:36So we have to make sure that we maintain that value for our customer and find ways to mitigate some
01:44of the disruptions that we face every day.
01:46I hope things get better, like all of us do, and doesn't go into an extreme situation, because the consumer
01:54will resist an increase.
01:57It's not something that, in the current economy, the consumer, with the interest rates, with the way inflations are going
02:05up,
02:06are structured to spend more money from their pockets.
02:10How are you and your customers, including some of these biggest brands, how are they weathering the tariff uncertainties right
02:17now?
02:17And are you expecting any lowering of tariffs from the U.S. anytime soon?
02:20Well, since the first day the tariff came, I'll just talk about one country, Bangladesh.
02:26It started with whatever, X number.
02:29The next thing, it was 10%.
02:31A month later, it was 39%.
02:34Three months later, they went in January, they negotiated to 19%.
02:39I was flying back from New York, and the morning I landed, they said it's 10%.
02:43A week later, they said the 10% is gone.
02:46So this has all happened in six to eight months, jolts, one day good, one day bad.
02:51Where do I see these tariffs going?
02:53I think my guess is as good as anybody else's guess.
02:58But if there are tariffs, we're going to have to deal with it, and that is why we are a
03:02multi-geography supply chain.
03:05We provide synthetics from Jordan because it's duty-free for America.
03:09It lowers the blow on the tariff.
03:11We're in places like Bangladesh where core fashion is affordable.
03:15We're in India because we offer a different value of products in India.
03:19So for us, constantly, we are going to have to find ways to, you know, avoid that tariff getting in
03:27the way of our doing business.
03:29You just opened that factory in India, the manufacturing unit in Odisha.
03:33What's the business case for India for you now?
03:36Well, you know, I'm Indian.
03:37I've lived 45 years in Hong Kong.
03:38So first of all, very happy to be back in India and do something for my roots.
03:42But we wanted to, every factory that we've built in our life, in Epic we say, resilient pursuit of better.
03:51So every factory we've built, we've pushed the button.
03:54The first time we bought in Kurt Salman, we got the gizmos.
03:57This factory that we've built today is the best that we've built ever.
04:01I can very proudly say it's the first net zero, net carbon facility in Asia for sure.
04:07We have handcrafted this factory.
04:10The temperatures in the city range from 48 to 50 degrees.
04:15Workers are sitting in that factory working comfortably.
04:19That being said and done, I would really like to just change subjects for a minute to talk about ESG.
04:23Because temperatures are raising everywhere.
04:26And we expect our workers to work in the factories, supply clothing, which is the necessity of life, whether it's
04:32to the luxury brands or the premium brands.
04:34And how they expect to work in those conditions when we see temperatures going to a different level.
04:41That is the reason why we build this factory in the hope that other people will come and see these
04:46factories.
04:47They'll see what we've done from a technology standpoint.
04:50And build further factories like this because we believe that the apparel industry is the industry that creates the maximum
04:58number of jobs.
04:59Most of the companies have started with apparel as their foundation.
05:02So, this is an industry to create, this is a factory to create respect for this industry.
05:08We're very proud of it.
05:09How much is your cost, and do you expect your cost to go up as you upgrade to your point
05:15and to consider things like it's just getting warmer out there and just for the benefit of your employees?
05:20And are you not fearful that you're pricing yourself out in terms of competition?
05:24That was the first question asked by me by the chairman of Uniqlo when I went there.
05:28I said, you've built a Ferrari.
05:30I said, it's not a Ferrari.
05:33I'm on, right now I'm on 3.7 megawatts solar energy.
05:37I have no carbon.
05:39I recycle all my water.
05:41I have a five-year ROI on my energy.
05:44I have a three-year ROI on my Italian washing machines.
05:49So, this is not about ESG to do for show or for just prove a point out here, which a
05:56lot of people do.
05:57It's really out there.
05:58We've measured the walls.
05:59We've seen how the sunlight comes in.
06:01The walls are built at an angle of 45 degrees.
06:04The walls are insulated with four inches of fireproofing and waterproofing.
06:09So, this is not all about investment.
06:12This is the way a factory has to be in the future.
06:14I don't know why we say that.
06:17I mean, I've been in the apparel industry for 45 years.
06:20I started as a sweatshop tailor, son of a tailor, tailor here again.
06:26I'm so happy to be here today to see that factory because I know our company is going to build
06:30better factories than this and create a lot of respect for the apparel industry, which does not get the due
06:37that it's supposed to get.
06:38It's quite a remarkable journey for you, Ranjan.
06:40I mean, you started the company in the 80s after a business trip to Bangladesh.
06:45You started as a textile trading sort of company to fabric supplier to garment maker.
06:50There's talks of you trying to boost growth and maybe even a stake sale right now.
06:54There's some ongoing rumors around that.
06:56Is that in the plan here right now?
06:58We have some great partners.
06:59I mean, people like World Bank and IFC have supported us.
07:03Goldman has been our advisors for a long time.
07:06So, there are a lot of conversations going around.
07:09We know that we've got a lot of wings to yet fly.
07:13So, we are doing things systematically.
07:17We might decide to list our company, definitely the India part of it in the near future.
07:22But it's a good place to be in.
07:24We're focused on our business.
07:25We're focused on our customer.
07:27We're focused on technology.
07:29We're focused on premium product.
07:31Once we keep doing that, and if our numbers and our top line and our EBITAs grow the way they've
07:37been growing for the last five, seven years, which is why we invite attention, well, it won't be hard decisions
07:42to make as to what we want to do.
07:44I personally would not make that decision.
07:47I'm a very good tailor, a modern tailor.
07:50I have very good professionals who help us make those financial decisions for us.
07:55Well, I mean, how close are you to listing in India since you brought it up?
08:01Well, it's definitely on our roadmap.
Comments