Sanjay Lalbhai

From the Swadeshi movement to globalization, the Lalbhai family-controlled Arvind group in Ahmedabad has withstood the test of times.

It all began in 1930, the year of the Great Depression, when many companies across the globe downed shutters and the textile industry in particular, in the UK and India, was in deep trouble. This coincided with Swadeshi movement and inspired by Mahatma Gandhi people from all walks of life in India began boycotting fine and superfine fabrics, imported from England.

Expanding business: Sanjay Lalbhai, chairman and managing director of Arvind, says the company will shortly start producing carbon glass-reinforced fabrics.

The Lalbhais knew that the demand for fine and superfine fabrics would continue to remain and any Indian company that could meet the demand would prosper.

The three Lalbhai brothers —Kasturbhai, Narottambhai and Chimanbhai—decided to set up a mill to produce superfine fabric and Arvind Ltd was born in 1931 with state-of-the-art machinery acquired from England with a share capital of Rs 25.25 lakh.

In an interview with Mint, Sanjay Lalbhai, chairman and managing director of Arvind, the flagship company of the Rs 4,000 crore group, recollects the more recent past in the 1980s when the group was weighing the option of diversifying to refineries but chose to stick with denim.

Arvind, the largest denim-producer in the world, is now betting on the real estate sector through joint ventures. It has also chalked out an ambitious project of setting up a special economic zone with an investment of about Rs 3,000 crore.

It has been 80 years since Arvind was formed. At one point of time you were planning to diversify into various sectors, including oil and gas.

We have been very successful. This is reflected by the fact that we never missed on (paying) dividends (to our shareholders) except for a couple of times in 1984 and 1986. We started out with local products like dhotis and sarees. The textile business today has four verticals—denim, khakhis, knits and technical textiles.

By 2014-15, we aim to achieve a turnover of Rs 9,000 crore from the current Rs 4,000 crore. Our brands (The company has the licence to sell brands such as Gant, U.S.A. 1949, Izod, Arrow and Cherokee. Arvind Ltd also has joint ventures with many global brands including Tommy Hilfiger, Lee, Wrangler and Riders.) will grow from Rs 800 crore next year to Rs 2,500 crore in 2014-15; real estate revenues will be almost Rs 1,000 crore; and revenue from technical textiles is seen growing to around Rs 500 crore from Rs 100-150 crore now.

Our knitting division will contribute Rs 500 crore among other sectors. All these will add up to Rs 9,000 crore.

The ’80s saw the onslaught of the power-looms and this was a time when we were looking to diversify. We were given the option of refinery (by our consultants) but we chose denim. We have no plans to enter into this sector (oil and gas) even today.