Will continue to do business with Welspun till probe outcome: IKEA

Swedish furniture retail major IKEA on Wednesday said it will continue its business collaboration "as usual" with Welspun India till the outcome of an ongoing investigation by the Gujarat-based firm over lapses in its supplies to US-based Target.

"To our knowledge and according to our continuous verifying processes, the supplier delivers according to our agreements," an IKEA spokesperson said in a statement. The spokesperson further said: "However, we will follow their ongoing investigation carefully and await the outcome. Until then our business collaboration continues as usual." IKEA does not buy products made from Egyptian cotton.

From the end of fiscal year 2015 IKEA reached the goal of 100 per cent cotton from more sustainable sources, and Egypt does not have sustainable cotton programs related to Cotton from more sustainable sources, the statement added. Welspun was supplying bedsheets and pillowcases made of Egyptian cotton to Target but the US-based retailer had alleged that the Indian firm had substituted another type of non-Egyptian cotton when producing sheets supplied to Target between August 2014 and July 2016.

Target has since then decided to terminate its contract with Welspun after an investigation. Welspun on its part had said it has initiated immediate actions to investigate the root cause and was appointing an external auditor to audit its supply systems and processes.