Welspun India is hopeful of commissioning its carpet manufacturing facility by the end of first half of current financial year. The company will be completing the installation of all machineries by the end of this month itself and it may take another 3 more months for commercial commissioning of the plant. The company has already started setting up its sales and distribution network for the new division and nearly 60% of the sales & distribution team is already in place. The company is planning to have 35-40 distributors and 450-500 dealers.
The new division is expected to gain from the ongoing trade war between USA and China. USA has imposed 25% duty on flooring products imported from China which will make Chinese products uncompetitive. Earlier Welspun was planning to sell nearly 2/3rd of the production in the domestic market. However, with the new duty structure on Chinese flooring products, the company sees greater scope for its products in USA now and aims to sell at least half of its production through exports.
Meanwhile, the company is in final stages of settling its long pending litigation claims made against it in the United States concerning the marketing and labelling of its premium cotton home textile products. Though the company continues to deny the merits of these claims, does not admit to any liability in the settlement agreement, and stands by the high quality of its products it believes this settlement agreement, which is subject to approval by the appropriate courts in the United States and regulators, is in the best interest of all stakeholders. “The settlement agreement provides monetary payments to settlement class members not to exceed an aggregate $36 million (about ₹250 crore),” Welspun India said in a regulatory filing. Through this settlement, the company wants to remove the long pending cloud of uncertainty over its operations.