textile sector 2009

TEXTILE INDUSTRY

Objectives of the Eleventh Plan for Textile Industry

Build up world class state-of-the-art manufacturing capacities to attain and sustain predominant global standing in manufacture and export of textiles and clothing.

Attain the 9% share in global textile trade by the terminal year of the Plan period.

Introduction

With China leading the global textile trade, India ranks second with 8%.

India’s share of the world trade in textiles (3.9%) and apparel (3%) is increasing

Exports grew by 8% in 2006-07 over the last year Textiles is the second largest employer after

agriculture, with about 35 million people directly employed

Global Scenario

The global textiles and apparel trade estimated at US$ 450 billion.

Expected to touch US$ 700 billion by 2010. For textiles, the European Union is the biggest

exporter Asia accounted for 45.1% of world textiles exports. The EU and the US are the biggest importers of

textiles. Clothing provided more than 40% of total

merchandise exports for Cambodia, El Salvador, Bangladesh, Sri Lanka, Mauritius and Lesotho.

Industry Growth

Production of textile yarn witnessed a compounded annual growth rate (CAGR) of 3.6 per cent between 1996 and 2006.

Finished cloth has witnessed a higher CAGR of 4.1 per cent during the same period.

This growth outperforms the global production, which experienced a CAGR of 2.25 per cent (both yarn and cloth).

Achievements India has the highest number of looms. India ranks 1st in jute production (at 1,900 million

kilograms) 2nd in silk production (at 15 million kilograms of raw

silk) 2nd in cotton exports (at 2,000 million kilograms) 2nd in cotton production (at 2,700 million kilograms of

cotton fibre) 5th in man-made fibres(at 2,000 million kilograms) Ranks 8th in the total production of wool (at 51

million kilograms) in the world.

Opportunities for investing in theIndian Textile Sector

Cost competitivenessRing Knitted FabricRing Woven FabricOpen-ended Knitted FabricOpen-ended Woven Fabric

If we compare this with countries like South Korea, China, Brazil we carry out this work at low price then them.

Cont.. Favourable domestic market

Growing demand for consumption a revolution is taking place in India’s retail sector (increase in disposable income of people)

Government initiatives to promote investment It is estimated that this industry will require US$

22 billion of new capital investments over the next five years.

Encouraging institutes as NIFT (National Institute of Fashion Technology) and Apparel Training and Design Centres (ATDCs) offer courses in Textile Engineering.

Cont..

Government initiatives to promote investment Technology Up-gradation:

Established the Technology Up-gradation Fund Scheme (TUFS), to enable firms to access subsidised low-interest loans for technology up-gradation.

Revival of sick units:Revival plans of the mills run by National Textiles

Corporation (NTC). For modernisation of 18 textile mills 2.2millon

US$ will be spent.

Critical success factors for manufacturers.

ScaleCompared to Chinese there are fewer larger firms

and firms have 1.5 times higher spinning capacity than those of India.

Cant exploit economics of scale and need full time work force in lean seasons.

Lean supply chainsSupply chain is long and complex. Have impact not only the cycle times, but also the

delivery times.The average cycle time is about 45-50 days, which

sometimes extends to 80 days.

Cont..

Customer-centricity in products and brand competitivenessSynthetic products contribute to nearly 50 per cent

of the global trade and India lacks a prominent position in this segment.

TEXTILE INDUSTRY 12

Attractive states and state specific incentives

An assessment of the key states which appear attractive for this industry on :-

Factor conditions Specific incentives HARYANA The state produces textiles and RMG worth US$ 1

billion Textiles contribute

27% of the capital investment 15% of the exports from this state.

Cont..

Abundant availability of raw materials, especially cotton and wool and number of garment manufacturing units.

Easy access to key buying centres such as Delhi and Gurgaon.

Low labour costs at US$ 8 per month. Fiscal Incentives US$ 0.14 million for projects. Textile cluster in Panipat, which is one of the largest

textile clusters in India and is proactive in setting up textile-promoting SEZ’s and FEZ’s (Free Enterprise Zones).

Cont..

ANDHRA PRADESH The state of Andhra Pradesh is one of the

major exporters of textiles in the country at US$ 90 million in 2003-04.

It ranks 2nd in the production of raw silk 4th in the production of wool 4th in the number of textile mills in India. Production capacity of 750 million metres of

fabric are located in the state.

Cont..

Fiscal IncentivesUnits are exempt from corporate tax in SEZs

besides the tax on exports and imports100 % reimbursement of stamp duty, transfer duty

and registration fee on all textile units Incentive of US$ 110 per worker employed in

textile parks Non-fiscal Incentives

Encourages spinning mills with a capacity greater then 12,000 units

Textile parks of area greater than 25 acres inside the city

Cont..

GUJARAT Contributes 23% to the state. It contributes 12% to the total textile exports of the

country . Produces 40 per cent of the country’s art silk fabric. Have various institutes for textile product design and

development, like the National Institute of Fashion Technology (NIFT).

Cont..

Fiscal Incentives20 % credit- linked subsidy for setting up power-

looms5% interest subsidy under TUFCapital subsidy of 10% in processing sector Interest subsidy of 3% p.a. to a new unit in the

textile sector

P

P

E

S

T

olitical Factors

conomic Factors

ociocultiral Factors

echnological Factors

Political factor The political factor has a huge influence upon the

regulation of businesses How stable is the political environment? Will government policy influence laws that regulate

business? What is the government's policy on the economy? Does the government have a view on culture and

religion? Is the government involved in trading agreements

such as EU, NAFTA, ASEAN, or others?

Economic Factors

Marketers need to consider the state of a trading economy in the short and long-terms.

This is especially true when planning for international marketing. You need to look at: Interest rates. The level of inflation Employment level per capita. Long-term prospects for the economy Gross

Domestic Product (GDP) per capita.

Socio-cultural Factors 

It is very important that such factors are considered. Factors include:

What is the dominant religion? What are attitudes to foreign products and services? How much time do consumers have for leisure? What are the roles of men and women within society?

Technological Factors  Technology is vital for competitive advantage, and is a

major driver of globalization. Consider the following points:  

Does technology allow for products and services to be made more cheaply and to a better standard of quality?

Do the technologies offer consumers and businesses more innovative products and services.

How is distribution changed by new technologies. Does technology offer companies a new way to

communicate with consumers e.g. CRM

MAJOR PLAYERS

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COMPARISON BETWEENKEY PLAYERS

ARVIND MILLS- It is the flagship company of the LALBHAI GROUP.

Established in the year 1931 by Kasturbhai Lalbhai with a share capital of Rs. 25,25,000.

Sanjay Lalbhai is the CEO & MD of the company. It generates a revenue of $451million. It enjoys a share of 72% of the total denim market. It is listed in both NSE & BSE.

RAYMOND’S INDIA- It is the flagship company of the SINGHANIA GROUP.

It was incorporated in the year 1925 as a producer of wool.

Mr. Gautam.H.Singhania is the Chairman & MD. It is a $318 million company with a very good market

share in premium branding. It is being quoted as ‘THE FUTURE OF TEXTILE

INDUSTRY’. It is listed in the BSE.

WELSPUN GROUP- It is one of the fastest growing companies in India.

Established in the year 1985 as a small scale unit. Mr. B.K.Goenka is the Vice Chairman & MD. It has a strong client base with companies such as

Wal-Mart, Chevron, Exxon etc. It is listed in BSE. It is a US $ 300 million company with 20000

employees & 50000 shareholders with presence in about 50 countries.

31

ARVINDWELSPUN

RAYMOND

0

200

400

600

800

1000

1200

1400

771.98

277.78

1202.83

545.42

284.31235.72

MARKET CAP.SALES

COMPARISON (in Crores)

India Enjoy Significant Advantage

Indian Textile Industry : Future Outlook

TANMAY PANDYATANESH KOTHARI

RONAK JAINPEEYUSH PAREEKJATINDER SINGH

SANDHUGAUTAM JAJU

AVIJIT TIBRAWALADITYA BHUTANI

ABHISHEK BHATIA

Group 1

Most Expensive

Saree40 lakhs

35

QUESTION ROUND