Ep. 127: Responsible textile manufacturing

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Ep. 127: Responsible textile manufacturing

The Textile Innovation podcast speaks with Fahid Hussain Kahlon, vice president sales and marketing of Interloop Limited.

WTiN: Hello and welcome to Textile Innovation, hosted by WTIN. My name is Abi and I'm the Features Editor and your podcast host. Each month we will be joined by a special guest. So join me and my colleagues as we deep dive into what's new, what's interesting, and what unmissable innovations have hit the market recently. We cover everything on the podcast from sustainability to startups and the latest research and development. Plus, we quiz the experts in the field about their products and ideas across the huge spectrum that is the textile industry. So no matter what your interest is, WTiN have you covered, and we can connect you to everything you need to know right here from our central hub in the UK.

In this episode, Fahid Hussain Kahlon, Vice President of Sales and Marketing at Interloop joins me to speak about the company's growth and plans for the future, including expansion into Egypt and investing in nearshoring. Interloop is a vertically integrated supply of hosiery, denim, knitted apparel and seamless activewear for leading global brands. It is recognized for its commitment to environmental and social impact. Interloop operates multiple LEED certified companies, Fairtrade certified facilities, and is a UN Global Compact Member. Fahid brings over 20 years of expertise in fashion garments, brand management and product development. He is a leader in the textile industry, driving innovation and excellence on a global stage. He speaks about how Interloop sets a benchmark in responsible high-performance manufacturing, meeting top global standards across the entire textile industry.

Hi Fahid, thank you for joining me today on Textile Innovation Podcast. Interloop is the world's largest hosiery supplier and has substantially diversified its offering. Please can you walk us through that growth journey and the sectors you cater to today?

Kahlon: Thank you, thank you so much. And I'm feeling very good to be part of this podcast today. And I will really feel proud to share the journey and how Interloop has done. When we talk about the overall Interloop history, I think growth is just one part of the Interloop story. If we go through our mission, that is agent of positive change. This is how I transform that there have been 34,000 direct employment which Interloop has applied to the people, and you can imagine that the number of families which are linked to it. So this is really I think we are proud of being an agent of positive change and with the 33 year history of Interloop the growth has come through a very systematic and phenomenal way.

Interloop has developed partnerships. Interloop's growth is merely dependent upon how we have customer service been kept at the center of all activities. So it was Interloop's customers, I would say that has driven our growth. And that's, we're really proud of. And that is the story was Interloop's customers, I would say, that has driven our growth. And that's what we're really proud of. And that is the story of Interloop, that over the years, our customers keep on growing, and they have a very best manufacturing partner. They came with a lot of new asks from Interloop, and Interloop had responded them. I think this is really a success story with Interloop and our customers. There are a few customers who started with us about 25 years back.

We just recently this year, we have a silver jubilee celebration for one of our customer, who was of our size when we started together. But as of today we are close to a billion dollar company and they are too as well. So I think this is really something that we have developed over the time and especially we have shifted our gears two years back. In 2021, we made our fiber vision and that was to be a full family clothing pattern of choice. And that means we went over from socks to denim, knitted apparel and to active wear seamless business. So we are catering for key textile businesses and in hosiery, no doubt we are globally largest player. So that is the total story of Interloop and I think partners which are our customers, they have a very good faith and confidence on us as a player. And this covers in different segments from retail fashion to brand to sports. So we are covering all segments of the fashion industry and one of the key elements that I would like to highlight with you the vertical integration of Intslue across its manufacturing capabilities and putting design and development and innovation as part of the package. So I think this whole makes Interloop a very unique story for our partners.

WTiN: That sounds great, thank you so much. And with multiple origins of productions and partnerships around the world, how do you maintain a traceable supply chain?

Kahlon: So as I was just telling you in your previous questions, currently Interloop is producing in three countries of origin. We have our master plant, we have a mothership in Pakistan, then we have a manufacturing facility for socks in Sri Lanka, and we are currently producing in China. Egypt is our next destination we will be starting in the coming year. I would say Interloop is well known as far as their manufacturing excellence is concerned. And you know, you have to do one good project, and if that is a success, then you just have to copy and paste. So that's what has been for Interloop. We are known in the industry, at least in Pakistan, and especially in the socks industry, one of the key players who have systems, who have a complete supply chain, entrant supply chain, which is traceable supply chain. And once that is established in Pakistan, taking another country of production was not an issue for us. We have to just take those all systems to the next location.

But it's just some ground reality adjustments, and it was an easy game to transform there. So over two other countries production like Sri Lanka and China has been running very very successfully and that has given us the confidence that we are going to another country of production which is Egypt and I think we were very hopeful that we will have this whole learnings and excellence to be transformed. If we just talk about how we're maintaining the traceable supply chain. I think Interloop has done a great job with their IT wing. We have an IT wing, just to explain, named Ocean Digitals, which is an interloop system company and they are our technology partner as well. So we have developed a tool which is called LoopTrace. LoopTrace is really a tool who can have traceability from farm to the fashion week. Majority of our supply chain is managed through our own backward integration. So it becomes further easy for us to make sure that all raw material are traced into a system and then all manufacturing is connected to the loop trace system where it is produced. And up till it is boarded on a ship, we have complete traceability of the products. If this answers your questions, Abi?

WTiN: Yeah, that's great. Thank you so much. I'm really excited about Egypt in the coming year. Going off what you've just said, how does Interloop ensure responsible manufacturing throughout its operations and high standards of social and environmental performance?

Kahlon: Thank you, Abi. I think this is something which is very interesting, and this is very close to my heart. And this is something we are really proud of as being Interloop, that we are very well known in this part of the world as a very responsible partner in manufacturing. And when this comes to action, current facilities that we have in Pakistan, two of them are LEED platinum certified, two of them LEED gold certified, and one of our facility which is recently LEED platinum certified is the largest number of square meters, which leads Platinum 35 with the highest level of score. That shows the commitment, I think, first of all, as a responsible manufacturing on our approach. And secondly, I think we have a very clear understanding on our objective and the destination where we are heading towards as a sustainable manufacturing partner. And we are setting the standard for a lot of environment practices. For example, we were the very first company in Pakistan who signed and whose SBIT targets were approved for both scope one and scope two emissions to be reduced by 51% by 2032. So we're really proud of that. I think that's a great achievement. And if we pivot this commitment, this is coming along with a lot of growth, which is coming through. We had our plant five started two years back and we have plant six started just recently. We are constantly expanding our production both in apparel industry and in the denim business as well.

So I think with all this growth coming in, committing a 51% reduction in emission is really a great ask. And currently 51% of our energy is powered from renewables. And this is again a commitment from our side where we are expanding into biomass, we're expanding into other sources, alternate sources, with the solar system coming very strongly into our energy mix. And we have a very focused programs which are related to the employee well-being. We are partnering with our customers like Adidas, Tagger, Tesco, and Levi's, where we have started a lot of initiatives to support our employees, tend to the work culture, and performance across all of businesses and in all our business categories. I think this all is really helping us to build a culture where we are supporting our people. We partner with guests as a work better initiative which boosts the financial literacy among the workers and I think we are in an environment where generally the workforce is not very much educated. And also we had some of the project done with TESCO with advanced women leadership, which is we need to be 30% by 2025. And Levi is delivering preventive care at our Denham facility. We had our own Kadam Ham Kadam program which ensures mental and emotional well-being of our people. We have very strong initiatives into DEI and I side as well. So I think in general we have done a lot of effort in the areas to distinguish ourselves and to make sure that we set a high standard for social and environmental performance for all the different operations.

WTiN: Could you tell me about how you have implemented digitalised operations and use a data-led approach in manufacturing?

Kahlon: This is again the automation and digitalization is a mindset. And once you have this vision and this mindset, then this is the fundamental approach. For the large-scale manufacturing like Interloop, I think we cannot operate and we cannot keep operating efficiently if we don't have a digital and digitized operation approach. As I told you earlier, we have a very data-driven culture here. Our flagship business, which is Osry, I think that was setting the standards and setting the tone where we invested a lot into upskilling our people and teams in terms of digital needs of the company. We have a very strong team which is working on the digital product creation. We have a very strong team which is working on the product development side with the AI tools. I would say that this all is really helping us out to reduce the development lead time. Substantially, I would say if I can put a percent, 70 percent of the development lead time is reduced. The resources are not wasted, and then a lot of emissions are not created. You can digitally develop sample and share in 48 hours instead of making a physical sample with all these material being applied, and then shipped to another country and region. So all this is really helping our people to expedite the processes and be more sure on what we are doing for both product in the product creation and in the manufacturing side as well. So one of the examples is like Foglight. We have implemented Foglight since years and that's helping us to have a live monitoring of our operations.

I think in manufacturing industry, this is one of the challenge that people go through. Everybody and customer wanted to know where their POs are heading at the moment. With all the digitalization and fog light operation, we can provide a live update to our customers and they can log on to our system and also see that. This is how we are responding to the digitalization into manufacturing.

WTiN: Yeah, and you've built a strong global footprint, but how do you stay ahead of shifting policies, tariffs, and geopolitical uncertainty, for example? And how does that play out across different parts of your business?

Kahlon: I think with all this new situation, which has adapted in the last few months, we feel ourselves in a very safer zone with a very good business mix. Currently, over 50 percent business is based out of US, about 49 percent in Europe, about one person in other locations, other markets. This overall business mix and customer mix is putting us in a unique position where we are very much neutralizing the impact of global footprints and tariff situation and geopolitical uncertainty. But nevertheless, I think we are living in a new world where uncertainty is a new normal. I would say that. And things change overnight. One day you sleep well, other day you have another terror situation coming. You have a war coming every month at the moment. So I think that has become a strong part of our business. But we are responding to our customer with more strategic diversification. We have a very strong team of research and innovation who's working on both material and processes, responding to lowest impact of the product which customer are asking to the today. The digital product creation is also one of the tool which is responding to this uncertainty. I think where we are not sure if we can ship a sample, we can digitally send the product. I think there are a lot of segments to it. If I ask, if it tells you very clearly, there's not one set of very precise answer I can give, but there is a lot of fragmented parts that we are collecting together to respond to this ask.

WTiN: And this next question might be just think about you just said might be a bit tricky to answer, but I guess could you say what the main challenges affecting traceable and sustainable global supply chains are at the moment?

Kahlon: Oh yes, this is not an easy question, that's for sure. But I think traceability and sustainability is really talk of the town. There has been a very strong ask from brand retailers and they have a very high expectation from us as a manufacturing to respond to it. But a complete solution is not an easy way out. Rather, it's a complex supply chain subject in my view. There have been a lot of dependency on multi-partnered location country to make one single product. For example, if we have to make a gene, thread is local for example, fabric is local, but the trims and sets is coming from China, some coming from Hong Kong, some coming from other part of the world. So there have been a multiple location involved. Traceability and to make a global supply chain coordination is not an easy. Integration of parts into one loop with a time-bound, very viable solution is a key challenge. We have responded to it with a loop trace solution, but still it's a challenge. One of the major challenges is the lack of standardization across different tiers. Tier two, tier one, tier two, tier three, everybody in different countries, different regions is following different processes. So standardization is a very big challenge. And traceability is also depending on the adoption of the technology. There are different countries, industries, which we have to stitch together to make a one traceable solution, which is a very challenging situation. Vertical integration is not cheaper.

When we come, we want to make everything at our own sites and locations, it has a cost. Each of our customers, as of today, everybody is under pressure on cost. Asking your question, this is a difficult thing and I think a lot of dependency on different partners and different parts of the world. But as an interloop, I think with the loop trace, we have tried to stitch together a lot of solution. But to be honest with you, this is in progress. This need to be further refined in the days to come. But we are happy that we know what challenges are and we are responding to it. And every day we are very closely monitoring it. In fact, as a matter of fact, we have a work stream which is dedicatedly working on accessibility. And I think this is a day-to-day thing that we are monitoring. And I think Interloop is ahead of a lot of competition in the region on this part.

WTiN: And how do you predict the current geophysical landscape will affect textile manufacturing moving forward? And do you potentially envisage greater nearshoring efforts for example?

Kahlon: Yes I think this is also a very interesting topic. So to me every five years there is a new mantra. The word comes to one time coming to Asia, India, Pakistan, Bangladesh for manufacturing. Then there was an Africa move coming in. Everybody wants to go to Africa. And then there is another thing coming up. Nearshoring is a new terminology that we started listening to in the recent years. And on top of it, this tariff regime, tariffs being used as a weapon of negotiation, is a new terminology that we came to work in most recent days. In my view, near-shoring will still be a very interesting subject and people will be really looking for it because most of the customer, what they're asking for, number one, lead time reduction, everybody is talking near-shoring is a solution, risk mitigation, and because nobody wants their shelf to be empty. And then proximity will remain the focal area.

So I think these are the three key elements that every customer, retailer, brand is conscious of. And reassuring is solution. Another thing that I think we as living in this age has now realized, we have a Red Sea issue, we have a Panama Canal issue, regional conflicts, and real conflicts is really changing the situation overnight. So I think all these things have really put a pressure on the sustainability of the supply chain, and nearshoring is one of the key solutions. But this is one solution solution because this is not the only solution we can say, but there is a much larger discussion and efforts need to be made on a lead time reduction on other parts of the supply chain as well. But of course, answering to your question very precisely to the point, I think, near-shoring will definitely be increased. And it's further increasing as soon as this tariff regime is settled on, because I think we are in a flux at the moment. And we are not sure that where this tariff is going to sit in the next few months. Once this is all settled, I think there will be lifting and shifting of the manufacturing world and we'll see another shift, might be shifting from Asia to the Southeast Asia or to the Africa, so we'll see a shift for sure, but much of unknown is coming. That's something to anticipate.

WTiN: Thank you, Fahid. My final question for you is, what opportunities could this potentially open up for localized supply chains? What is next for Interloop? Do you have any exciting developments in the pipeline that you're able to share with me today?

Kahlon: Yes, sure. I think there are two parts of it. Number one, I think nearshoring and this all challenge also creates an opportunity. So this is the natural, I think, and reaction part of the world. So if I see currently Interloop is 77% local sourcing, so we have a huge dependency on our local sourcing. Still, we are 23% overseas dependent, but still there is a huge local dependency. 67% of our cotton we are locally sourcing. In the most recent days, there have been a lot of ask from the customer to have some regenerative cotton and Pakistan was behind on this initiative and currently we have started working on this as well. But with all this, there is an opportunity to build more stronger relationship with the international stakeholder and partners. But for us, it's also an opportunity for our customers that we are one-stop shop. We are offering them a full family clothing. If my one customer is taking socks from me, they readily can take denim, they can take knitted apparel from us, they can take activewear seamless from us. So this is an opportunity for them as well, for us as well, that we are one-stop shop for a multi-category. If I talk about what exciting, I think we are currently drafting our next five-year vision at the moment, and the focus is to really transform Interloop into a global company, from a local company to a global company. Currently, we are just completing our last five year target to be a 700 million dollar company which is very much achieved and the next target is going to be even more and I think this will place us unique in the manufacturing world, especially in the textile, Pakistan and also in the region, that I think a lot of unknown to come and I would love to be in your podcast again with once this vision is drafted. A lot of things are under ND at the moment that I am unable to declare, but I think for sure we have an exciting vision coming through. But I can give you some highlights that circularity and environment remains our key focus. Digitalization remains our favourite in the years to come. And developing our employees and creating a great work culture remains our key objective. I think business, we are all top and bottom line driven and Interloop is beyond that. But I think that element will still be there into our next vision. So I'm very excited, I think, to be part of this transformation, which is an exciting journey coming from a source manufacturing to a really global company servicing all global brands. So we are further going up in the same atmosphere.

WTiN: That's great, thank you so much and thank you for joining me today on the Textile Innovation Podcast and we will be excited to have you back when you can reveal more about the future. Thanks so much Fahid.

Kahlon: Thank you so much, lovely talking to you and excited to be back again with the new innovation, the new news coming through.

WTiN: Thank you so much for listening. If you have any questions or want to learn more, you can follow us on LinkedIn at World Textile Information Network, or you can contact me directly at content at WTIN.com. If you are interested in sponsoring an episode of the podcast, please content at WTIN.com. If you are interested in sponsoring an episode of the podcast, please email sales at WTIN.com. Thank you and we'll see you next time.