Home textiles manufacturer Welspun India on Tuesday said it has initiated steps to closely monitor and control its Egyptian cotton business, which had come under a cloud early this year over quality issues.
“…the company is moving towards producing all the Egyptian cotton products in-house i.e., from procuring cotton to the finished product,” the company said in a statement.
The steps to be initiated include deployment of a dedicated resource in Egypt for sourcing of Egyptian cotton, increasing third party assurances such as Gold Seal from Cotton Egypt Association, vendor audit and DNA tests, it said.
Welspun India found itself in a spot in August when U.S. retailer Target Corp accused the company of selling cheaper sheets as premium Egyptian cotton for two years, damaging the company’s reputation and hurting India’s image in quality control.
The Egyptian cotton imbroglio hit the company hard and led to a net loss in the quarter ended Sept. 30 from an otherwise healthy profit last year.
The company posted a consolidated net loss of 1.48 billion rupees ($21.87 million) for July-Sept as against a profit of 1.79 billion rupees a year earlier.
