Sustainability sits at the very core of our business practices- Rajiv Sharma, Group Chief Executive, Coats

With over 250 years of heritage, Coats is the world’s leading industrial thread company. At home in some 50 countries, Coats has a workforce of over 17,000 people across six continents. Revenues in 2021 were US$1.5bn. Coats provides complementary and value-adding products, services, and software solutions to the apparel and footwear industries. It also applies innovative techniques to develop high-technology performance materials threads, yarns, fabrics, and composites in areas like personal protection, telecoms, energy, transportation, and household and recreation. Rajiv Sharma has been Group Chief Executive of Coats Group plc since January 2017. During that time, he has focused the business on its strategic enablers of sustainability, innovation, digital, and acquisitions and refined the company’s purpose. Rajiv has 30 years of global multi-industry leadership experience. He joined Coats in 2010 as Global CEO of Industrial. Team Textile Focus has an exclusive conversation with Mr. Rajiv Sharma during his recent visit to Dhaka, Bangladesh. For our readers, the conversation is drafted below-

Rajiv Sharma, Group Chief Executive, Coats

Textile Focus: When did Coats launch its operations in Bangladesh and where does Bangladesh stand in your extensive global structure?

Rajiv Sharma: Coats has been in Bangladesh since 1990. We have two state-of-the-art factories in Bangladesh and invested heavily in the last five years to build ahead of demand. Bangladesh has a strategic role in the textile industry as one of the most important apparel exporting countries in the world. Putting in the money and building the factories is the easy part, but running it at a high level of professionalism, in line with quality and safety standards, and taking care of each other is the key. We are very proud of our talented local team here that contributes to our success globally.

Textile Focus: In a post covid era, how do you see the textile industry evolving? What are the trends and challenges you have witnessed so far this year?

Rajiv Sharma: Two major events this year had an impact on supply chains and the textile industry this year:

First, as the conflict in Ukraine further disrupts the world’s economy, fashion players will need to adapt to an increasingly uncertain and volatile inflationary environment. The soaring price of oil and gas is increasing consumer price inflation and is set to impact the demand for fashion items, as purchasing power is eroded. The conflict is also worsening the supply chain disruptions caused by the COVID-19 pandemic, highlighting the need for shorter supply chains.

Second, the ‘zero Covid’ policy in China has resulted in additional supply chain disruptions as manufacturing, logistics, and ports have been shut in parts part of China.

After many decades, retail prices of apparel and footwear have gone up. Inflation and supply chain disruptions have got most brands to push retail prices up and lower discounting.

We carefully manage our factory utilization, product mix, and overall cost-based productivity to deliver the required customer value and shareholder value. The premium, performance, and sports categories were relatively less impacted by Covid and continue to be important segments with denim and formal wear gaining more strength after the pandemic.  According to Euromonitor, retail sales recovery (to 2019 figures) will happen in 2022.

Textile Focus: Your latest acquisitions of Texon and Rhenoflex show your growing interest for the footwear business. How will this shift affect Coats’ 2022 business strategy?

Rajiv Sharma: These acquisitions consolidate Coats’ presence in the highly attractive and fast-growing athleisure footwear market. Coats, Rhenoflex, and Texon will be stronger together: becoming a global leader with a unique product offering, enabling greater innovation and solutions for our customers.

Increased sustainability – the combined group will be a sustainability champion, strengthening credentials and expanding the breadth of sustainable product innovations and processes within the wider industry.

Enhanced customer experience – from greater customer value-adding technologies to an expanded product portfolio and best practice technical service functions, the combined group will better meet customer needs and expectations in a fast-changing world.

Accelerated innovation – bringing together the knowledge and experience of the combined group to drive accelerated customer-led innovation within the footwear components and fashion accessories industries.

Textile Focus: Sustainability is a big issue for the textile industry. How is sustainability affecting Coats as a business?

Rajiv Sharma: Clothing production consumes vast quantities of natural non-renewable resources, including water and energy. The industry is a significant emitter of global greenhouse gas emissions.  As the world’s largest supplier of thread, we play a big part in that industry. Coats’ yarns and threads are essential to many of the world’s finest clothes. Our global footprint is unrivaled, and we are connected to every link in the supply chain, from raw materials suppliers to brands. Our prominence within the industry brings with it responsibility. We want – and feel a duty – to lead the textiles industry on to a new path of sustainability.

Sustainability sits at the very core of our business practices. We started this journey in 2018 when we set a series of goals that have become the foundations of our approach to sustainability. We focused on ambitious targets set under five priority areas: water, energy, effluent & emissions, social, and materials and we have developed a roadmap to get there. We log our progress against a series of milestones and will open-source our work to help other companies who face similar challenges.

Coats will work internally and with all our partners throughout the supply chain to expand our use of eco materials and create new products and packaging solutions that can be efficiently recycled and reused.

By 2030, all Coats products will be made completely independently of new oil-extraction materials such as polyester and nylon. 70% of our global energy consumption will come from renewables.

Textile Focus: What are your targets for reaching net zero?

Rajiv Sharma: Coats is committing to halve our emissions in the next decade and to be net zero by 2050. Our commitment is comprehensive, encompassing all our emissions under scopes 1, 2, and 3. We also aim to play our part in our industry’s broader journey to net zero.

We draw confidence and lessons from the 2018 commitments we made that by end of 2022 we would, among other goals, reduce our water usage by 40%, our energy use by 7%, and our waste output by 25%. These remain challenging targets and, though we have made good progress, there is still more to do. We continue to commit resources and plan to achieve them at the same time as working towards the longer-term goal of net zero.

Textile Focus: Circularity has also become a key topic in the textile industry. How is Coats handling this concept?

Rajiv Sharma: Coats has spent over 250 years becoming an expert in how to design and produce a thread that holds garments together. In this generation, we need to become experts in helping the industry dismantle garments effectively and efficiently for recycling and reuse.

To recycle a garment (and re-use or dispose of the elements that are non-recyclable, such as zips), you need to take it apart and separate the different materials. Currently, that has to be done largely by hand, as the seams need to be unpicked.

We have a range of new products that we believe offer the key to overcoming the challenges associated with the disassembly stage and so speeding and scaling up the entire recycling process.

EcoVerde, which is made of 100% recycled polyester, sits naturally within the circular process, and EcoRegen, a 100% lyocell thread that more closely matches the material of the garments, allows them to be recycled without needing to remove the stitching. EcoCycle is one of the first water-dissolvable threads of its kind, designed to dissolve when washed at high temperatures. At the end of a garment’s life, recyclers can wash the garments to dissolve the seams, enabling them to be easily pulled apart into pieces to allow the components to be sorted and recycled separately. EcoCycle thus removes one of the biggest obstacles currently blocking effective recycling programs for clothing and helps to facilitate solutions that support the circular economy. 

The focus on circularity needs to happen from the garment design stage onwards and every step of the value chain has a part to play in it. We will keep investing and developing to go even further, beyond these exciting existing products, working with recycling partners to create new products that can enable even more efficient and effective circularity.