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Textile & ApparelCompendium

2012

About the Compendium

This Textile and Apparel Compendium brings together key statistics on the Global and Indian Textile and Apparel market. The document is broadly split into three sections. The first, titled Global Textile and Apparel Market Overview highlights production and consumption hubs, demand across the value chain, trade scenario and installed machinery in various countries.

Next, the Indian Textile and Apparel Market Overview section details the Industry size, contribution of various segments to domestic market, growth projections for domestic markets, home textile market, Indian textile supply scenario, technical textile markets, employ-ment in textile and allied sector, textile machinery production and projection for export growth of India. Lastly, the section titled Changing Trends & Opportunities in Indian Apparel Retail covers how Indian Apparel retail is evolving, the changing boundary lines of the market and new product opportunities.

Executive Summary 01

Global Textile & Apparel Market Overview 04 » Global Market Overview 05 » Country-wise Share of Global Production & Retail Market 06 » Product-wise Share of T & A Exports of Major Producing Countries 07 » Product-wise Share of Global Textile Imports of Major Producing Countries 08 » Demand Growth Across the Value Chain 09 » Global Fiber Demand Break-up 10 » Global Yarn Demand Break-up 11 » Global Fabric Trade Break-up 12 » Global Apparel Trade Break-up 13 » Installed Capacity of Spinning and Weaving Machinery 14 » Global Textile and Apparel Trade Projections 16

Indian Textile & Apparel Market Overview 18 » Textile & Apparel’s Contribution to India’s GDP 19 » Textile and Apparel Industry size 20 » Overall Domestic Textile and Apparel Market 21 » Indian Apparel Market Size and Growth 22 » Segment-wise Market Projections 23 » Home Textiles Market Overview 28 » Indian Fiber Supply Scenario 29 » Indian Yarn Supply Scenario 30 » Indian Fabric Supply Scenario 31 » Technical Textiles Market 32 » Production of Textile Machinery in India 33 » Employment in Indian Textile and Apparel Sector 34 » Textile and Apparel Trade Projections for India 35

Changing Trends and Opportunities in Indian Apparel Retail 36

Annexure 42 » Assumptions & Definitions

About Technopak 46

Contents

1

Executive Summary

Global Textile & Apparel Industry Overview

•The textile and apparel trade was estimated to be USD 662 billion in 2011 and is expected to grow at a CAGR of 5% in the next 10 years

•The EU, US, China, Japan and India are the biggest markets for apparel, but apparel production is primarily concentrated in China, India, Bangladesh, Vietnam and Turkey

•Current global fiber mix is 41% natural and 59% man-made fiber(MMF). Demand for MMF yarns will grow faster than demand for natural fiber yarns.

•The global fabric trade was estimated to be USD 74 billion in 2011 while the global apparel trade was estimated to be USD 389 billion. Knit fabric and apparel are performing better than their woven counterparts in global trade.

•Asian countries like China, India, Pakistan, Bangladesh, Thailand, Indonesia are among the leading countries in terms of installed machinery capacity. China alone has a share of around 45% of world’s total installed capacity for spinning and weaving machinery.

2

Executive Summary

Indian Textile & Apparel Industry Overview

•The Indian textile and apparel market size was estimated to be Rs 2,73,000 crores (USD 58 billion) in 2011 and is projected to grow at 9% CAGR to Rs 6,64,000 crores (USD 141 billion) by 2021

•Menswear contributes 43% of the Indian market; however, this contribution is expected to drop to 40% by 2021 due to faster growth of womenswear and kidswear

•The domestic home textile market is growing at a CAGR of 8% and is projected to reach Rs 40,800 crores (USD 9 billion) in 2021

•The technical textiles market of India is estimated to be Rs 64,650 crores (USD 14 billion) and is expected to reach Rs 1,60,750 crores (USD 34 billion) by 2021, at a CAGR of 10%

•Employment in the Indian textile and apparel sector stands at 45 million and with an additional employment of 60 million in allied sector, total employment figure stands at 105 million.

Changing Trends in the Consumption Pattern in India

•The consumer wardrobe has changed from only ‘need-based clothing’ to ‘occasion specific dressing’ and is gradually becoming more ‘detail oriented’

•Women shoppers are gaining more importance with their higher spending power and requirement of specific clothing for different purposes

•The growth of apparel e-tailing is fueled by the changing lifestyles of domestic consumers and increasing penetration of technology

Global Textile & Apparel Market Overview

5

Country-wise Share of Global Production and Retail Market: 2011

Country % Share

China 40%

India 15%

US 15%

Pakistan 4%

S. Korea 3%

Others 23%

Fiber

Country % Share

China 64%

India 9%

US 3%

Taiwan 2%

S. Korea 2%

Others 20%

Yarn

Country % Share

China 41%

India 18%

Thailand 4%

Indonesia 4%

Turkey 4%

Others 29%

Fabric

Country % Share

China 50%

India 13%

Bangladesh 6%

Vietnam 4%

Turkey 3%

Others 24%

Garment

Country % Share

EU 28%

US 20%

China 12%

Japan 9%

India 3%

Others 28%

Retail*

Source: The Fiber Year, Textile Intelligence, UN Comtrade, Secondary Research , Technopak Analysis* Includes apparel and home furnishing

6

Product-wise Share of Global T&A Exports of Major Producing Countries

•China dominates textile and apparel exports with highest exports share in yarn, fabric, apparel and made-ups

•India’s share in global exports is higher in fiber and yarn

Indonesia, Thailand, Cambodia, Mexico, Taiwan and Vietnam are other major T&A exporting countries

1%1% 0.1% 5% 2%3% 4%

4%5%

12%11%

4%

3% 8%1% 4%

3%1%

10%8%

23% 38%40%

48%

Fiber Yarn Fabric Apparel Made-ups

China

Pakistan

India

Turkey

Bangladesh1%

1%

2%

Source: UN Comtrade, Technopak Analysis

7

Product-wise Share of Global Textile Imports of Major Producing Countries

•Among major producing countries China has the highest share in textile imports

•Shares of textile imports by Bangladesh and Turkey are also high indicating low backward integration in these countries

US, Germany, Italy, Vietnam, Indonesia and Mexico are other major importing countries

15%13% 12%

4%6%

4%

1% 3%4%

1%2%

1%2%

1%0.3%

Fiber Yarn Fabric

Pakistan

India

Bangladesh

Turkey

China

Source: UN Comtrade, Technopak Analysis

8

Demand Growth Across the Value Chain

Overall global demand across the value chain is expected to grow by around 3% year-on-year for the next decade

*Yarn includes both filament and spun yarnAll numbers are rounded offSource: The Fiber Year, Textile Intelligence, UN Comtrade, Secondary Research , Technopak Analysis

41 50 53 5965

0

20

40

60

80

2000 2005 2011(E ) 2016(P) 2021(P)

4657

6777

90

0

50

100

2000 2005 2011(E ) 2016(P) 2021(P)

250310 370 420

480

0

200

400

600

2000 2005 2011(E ) 2016(P) 2021(P)

Fabric (bn sq mtrs)

95120

145165

190

0

50

100

150

200

2000 2005 2011(E ) 2016(P) 2021(P)

Apparel (bn pcs)

Yarn* (mn tons)Staple fiber (mn tons)

9

Global Fiber Demand Break-up

•Current global fiber mix is 41% natural and 59% man-made fibers

•Demand for polyester fiber is expected to increase at a higher rate than others.

•Increasing population and per capita consumption is expected to drive global fiber demand

All numbers are rounded offSource: The Fiber Year, Textile Intelligence, UN Comtrade, Secondary Research , Technopak Analysis

16 17 16 17 183 3 4 5 520 25 26 29 3219

2638

47 58

58

7184

98113

0

20

40

60

80

100

120

2000 2005 2011(E ) 2016(P) 2021(P)

Polyester

Cotton

Cellulosic

Others

Total

4%

2%

2%

1%

3%

11 11 10 10 112 3 4 5 5

20 25 26 29 328

1315 17

4150 53

59 65

0

10

20

30

40

50

60

70

2000 2005 2011(E ) 2016(P) 2021(P)

Total Fiber + Filament Yarn Demand Break-Up

Staple Fiber Demand Break-Up

mn tons

mn tons

CAGR 2011-21

Polyester

Cotton

Cellulosic

Others

Total

2%

2%

2%

1%

2%

CAGR 2011-21

11

10

Global Yarn Demand Break-up

All numbers are rounded offSource: The Fiber Year, Textile Intelligence, UN Comtrade, Technopak Analysis

Spun yarn

(mn tons)

Fillament yarn

Total

0.8%

5%

3%

Yarn Break-Up

17 21 30 3849

2936

3739

4146

5767

77

90

0

20

40

60

80

100

2000 2005 2011(E ) 2016(P) 2021(P)

CAGR 2011-21

Yarn Type 2011(E ) 2016 (P) 2021(P)

Textile Yarn 24 31.6 42

Industrial 2.6 3.1 3.8

Others 3.4 3.3 3.2

Total 30 38 49

Filament Yarn Demand Break-up(mn tons)

Yarn Type 2011(E ) 2016(P) 2021(P)

Cotton 21 21.9 22.7

Polyester 11 12.3 13.7

Others 5 4.8 4.6

Total 37 39 41

Spun Yarn Demand Break-up(mn tons)

•Filament yarn demand growth will be higher than spun yarn

•Cost advantage compared to spun yarn and increasing usage in apparel will drive growth of filament yarn

11

Global Fabric Trade Break-up

All numbers are rounded offSource: The Fiber Year, Textile Intelligence, UN Comtrade, Secondary Research , Technopak Analysis

•The increasing trend of casual wear has resulted in increased trade of knit fabrics

CAGR 2000-05 4% 2% 3%

CAGR 2005-11 2% -4% -2%

CAGR 2000-05 7% -6% -4%

CAGR 2005-11 2% 1% 1%

12 15 17

6371

57

75

86

74

0

20

40

60

80

100

2000 2005 2011(E )

2 3 3

1410 11

16

13 14

0

5

10

15

20

2000 2005 2011(E )

WovenKnit Grand Total WovenKnit Grand Total

Global Fabric Trade Trend (value in USD bn) Global Fabric Trade Trend (volume in bn kg)

12

Global Apparel Trade Break-up


•Apparel trade has grown in value terms, but, in volume terms, it has decreased in the past 6 years

•Trade growth rate is higher for knitted apparel compared to woven apparel

CAGR 2000-05 8% 6% 7%

CAGR 2005-11 7% 5% 6%

CAGR 2000-05 5% 5% 5%

CAGR 2005-11 0.2% -1.2% -0.6%

WovenKnit Grand Total WovenKnit Grand Total

Global Apparel Trade Trend (value in USD bn) Global Apparel Trade Trend (volume in bn kg)

88128

191

115

151

198203

279

389

2000 2005 2011(E )

6.07.7 7.8

6.0

7.8 7.2

12.0

15.5 15.0

2000 2005 2011(E )

13

Installed Capacity of Spinning Machinery

Source: International Textile Manufacturers Federation (ITMF)

•China’s share in installed capacity for spinning has improved substantially in both ring and rotor spinning

•India’s share has improved considerably in rotor spinning while Bangladesh’s share has improved in ring spinning

CountryRing Spindles

2005% Share of World

Ring Spindles 2010

% Share of WorldOpen-End Rotors

2005% Share of World

Open-End Rotors 2010

% Share of World

China 70,600 36% 1,13,600 46% 1,160 14% 2,198 28%

India 38,460 20% 47,062 19% 501.1 6% 672 9%

Pakistan 9,779 5% 10,549 4% 150.7 2% 158 2%

Indonesia 7,903 4% 8,138 3% 90 1% 117 2%

Turkey 7,055 4% 7,243 3% 543.3 7% 600 8%

Bangladesh 2,484 1% 7,291 3% 55.9 1% 187 2%

Brazil 4,701 2% 4,988 2% 332.8 4% 344 4%

Mexico 3,727 2% 3,767 2% 100 1% 103 1%

Italy 3,956 2% 3,862 2% 79.4 1% 72 1%

Thailand 3,658 2% 3,797 2% 52 1% 48 1%

Rest of the World 43,573 22% 36,536 15% 4,955 62% 3,283.3 42%

World 1,95,896 2,46,833 8,020 7,783

Installed capacity figures in 000’ units

14

Installed Capacity of Weaving Machinery

*Automatic and non-automatic looms, 75cm or wider, installed in mills (doesn’t include figures for non-mill sector)Source: International Textile Manufacturers Federation (ITMF)

•China’s share has improved in installed capacity for weaving machinery, especially in shuttle-less looms

•Indonesia also has improved its installed capacity substantially from 2005 to 2010

CountryShuttle-less looms, 2005

(Cotton) % Share of World

Shuttle-less looms, 2010

(Cotton) % Share of World

Shuttle looms (Cotton),2005

% Share of World Shuttle looms, 2010 (Cotton)

% Share of World

China 2,30,870 29% 5,27,400 46% 6,79,133 42% 6,90,700 46%

Pakistan 24,000 3% 27,000 2% 2,25,000 14% 2,25,000 15%

Indonesia 29,000 4% 51,736 5% 1,97,000 12% 1,92,000 13%

Thailand 54,900 7% 76,980 7% 74,600 5% 51,320 3%

Brazil 40,590 5% 47,313 4% 25,000 2% 28,248 2%

Japan 14,420 2% 8,964 1% 18,950 1% 10,127 1%

India 9,640 1% 18,537 2% 90,230 6% 52,326 3%

Turkey 18,000 2% 40,000 4% 30,000 2% 20,000 1%

Mexico 14,500 2% 14,500 1% 35,000 2% 35,000 2%

Taiwan 31,520 4% 27,830 2% 820 0% 479 0%

Rest of the World 3,28,290 41% 2,98,266 26% 2,24,900 14% 2,02,194 13%

World 7,95,730 11,38,526 16,00,633 15,07,394

Installed capacity of weaving machinery* by type and selected countries

15

Global Textile and Apparel Trade Projections


•Overall trade is expected to grow at 5% until 2021

•Textile trade is expected to grow at a slower rate due to increasing consolidation of textile manufacturing base near apparel manufacturing

126 145 16731 38 4642 49 5574 78

81

389

530

711662

840

1060

2011 (E) 2016 (P) 2021 (P)

Apparel

Fabric

Yarn

Fiber

Others

Total

6%

CAGR (2011-21)

1%

3%

4%

3%

5%

Global Textile & Apparel Trade (in USD bn)

Indian Domestic Market: Textile & Apparel

17

Textile & Apparel’s Contribution to India’s GDP

All numbers are rounded offSource: Technopak Analysis

32.1%

4.6%

11.1%

4.0%4.8%

20.4%

2.9%

20.1%

Apparel

Others

Transport & Communication

Leisure & Education

Food & Beverages

Furniture, f urnishing etc.

Gross rent, f uel & powerMedical and

health services

Private Consumption:USD 1000 billion (58%)

Retail:USD 470 billion (47%)

Textile & Apparel Domestic Market:

USD 58 billion (12%)

Textile & Apparel Exports:USD 31 billion

ApparelUSD 40 billion (69%)

TextileUSD 18 billion (31%)

Home TextileUSD 4 billion (22%)

Technical TextilesUSD 14 billion (78%)

GDP: USD 1.73 trillion

Public Spending & Investment:USD 730 billion (42%)

Non Retail:USD 530 billion (53%)

18

Textile and Apparel Industry Size


•India’s total textile and apparel industry size (Domestic + Exports) was estimated to be Rs 4,18,000 crores (USD 89 billion) in 2011 and is projected to grow at a CAGR of 9.5% to reach Rs 10,50,000 crores (USD 223 billion) by 2021

273

435

664145

235

386

418

670

1050

2011(E ) 2016 (P) 2021 (P)

Domestic

Exports

Total INR (’000 Cr)

89

31

58

143

50

93

223

82

141

INR (‘000 Cr)

USD (bn)

USD (bn)

USD (bn)

CAGR 9.5%

19

Overall Domestic Textile and Apparel Market

*Values given for apparel and home textile is at the retail end, while for technical textiles it is a combination of B2C and B2B depending on the end use of the category All numbers are rounded offSource: Technopak Analysis

•The current domestic textile and apparel market is worth Rs 2,73,350 Crores (USD 58 billion) and is expected to grow at 9% annually to reach Rs 6,63,800 Crores (USD 141 billion) by 2021

2021

2016

2011

9% 8% 10% 9%CAGR 2011-21

Apparel USD 40 bn

INR Cr 1,90,300

Home Textile USD 4 bn

INR Cr 18,400

Technical TextilesUSD 14 bn

INR Cr 64,650

TotalUSD 58 bn

INR Cr 2,73,350

Apparel USD 63 bn

INR Cr 2,94,000


NR Cr 27,350


INR Cr 1,13,200

TotalUSD 93 bn

INR Cr 4,34,550

Apparel USD 98 bn

INR Cr 4,62,250


INR Cr 40,800


INR Cr 1,60,750

TotalUSD 141 bn

INR Cr 6,63,800

20

Indian Apparel Market Size and Growth


•Indian domestic apparel market is expected to grow at a CAGR of 9%. Higher per capita consumption, favorable consumer demographic and increase in prices will drive apparel market growth in India

1,90,300

2,94,000

4,62,250

2011(E ) 2016 (P) 2021 (P)

43%

38%

10%

9%

40%

38%

11%

11%

Mens

Womens

Boys

Girls

41%

38%

11%

10%

2011(E )

2016 (P) 2021 (P)

CAGR 9%

Total Apparel Market INR (Cr) Segment Split

21

Segment-wise Market Projections


•Currently Menswear is the biggest segment of the apparel market, however kidswear and womenswear are growing faster than men’s segments. Kidswear (Girls) has the highest growth rate.

80,936

1,20,350

1,82,800

2011(E ) 2016 (P) 2021 (P)

72,039

1,11,450

1,75,300

2011(E ) 2016 (P) 2021 (P)

19,433

31,770

52,230

2011(E ) 2016 (P) 2021 (P)

17,892

30,430

51,920

2011(E ) 2016 (P) 2021(P)

Men's INR (Cr)

Boys INR (Cr)

Women's INR (Cr)

Girls INR (Cr)

CAGR 8% CAGR 9%

CAGR 10% CAGR 11%

22

Menswear Market


•Denim, Activewear and T-Shirts are high growth categories in Menswear segment

24,470

19,381

7,2175,966 5,833

4,879 4,7374,049

1,673 1,623 11070%

2%

4%

6%

8%

10%

12%

14%

16%

18%

0

5,000

10,000

15,000

20,000

25,000

30,000 INR (Cr) CAGR

Shirts Trousers Denim Winterwear

Innerwear

T-Shirts Suits Others Activewear

Ethnic Dailywear

CAGR (2011-21)Market Size 2011INR (Cr)

SegmentAverage

23

Womenswear Market


•Denim, Innerwear and Western wear categories are expected to demonstrate relatively higher growth rate in Womenswear segment

Market Size 2011 INR (Cr) CAGR (2011-21)

SegmentAverage

INR (Cr) CAGR

54,425

8,370

2,685 2,052 1,749 915 871 651 3210%

2%

4%

6%

8%

10%

12%

14%

16%

18%

20%

0

10,000

20,000

30,000

40,000

50,000

60,000

Ethn

icwe

ar

Inne

rwea

r

Win

terw

ear

Slee

pwea

r

Tops

/shi

rts/T

shirt

s

Othe

rs

Trou

sers

/skir

ts

Deni

m

Form

al J

acke

ts

24

Boyswear Market


•In Boyswear segment growth rate is highest for Denims followed by Winter wear and Tee/Shirts

6,198

4,928

4,050

1,569 1,535

772382

0%

2%

4%

6%

8%

10%

12%

14%

16%

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

Uniforms Tee/Shirts Bottomwear Winterwear Ethnic Others Denim


SegmentAverage

INR (Cr) CAGR

25

Girlswear Market


•In Girlswear segment growth rate is highest for Denims followed by Winter wear and Tee/Shirts

SegmentAverage

5379

4096

2788

19481541 1460

620

600%

2%

4%

6%

8%

10%

12%

14%

16%

18%

0

1000

2000

3000

4000

5000

6000

Uniform Ethnic Dresses Bottom wear Winter wear Tee/Shirts Others Denim


INR (Cr) CAGR

26

Home Textile Market Overview


•Home textile market is expected to grow at a CAGR of 8% for next decade

18,400

27,360

40,800

-

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

2011(E ) 2016 (P) 2021 (P)

INR (Cr)

Domestic Home Textile Market

CAGR 8%

Category-wise Market Break-up

Categories 2011 (E ) 2016(P) 2021(P) CAGR 2011-21

Bed Linen 8965 13170 19350 8%

Towels 3320 4840 7060 8%

Curtains 1850 2975 4790 10%

Blankets 1465 2040 2850 7%

Upholstery 1190 1915 3080 10%

Kitchen Linen 1110 1635 2400 8%

Rugs & Carpets 500 790 1250 10%

Total 18,400 27,360 40,800 8%

INR (Cr)

27

Indian Fiber Supply Scenario

All numbers are rounded off Source : Ministry of Textiles, Technopak Analysis

•India produced 8.7 million tons of fiber in 2010-11. The fiber production has increased at a CAGR of 4% between 2005-06 to 2010-11

Fiber(2010-11)

Production Imports ExportsProd.Growth (5 yr CAGR)

Imports Growth (5 yr CAGR)

Exports Growth(5 yr CAGR)

Vol. (‘000 tons)

Vol. (‘000 tons)

Vol. (‘000 tons)

% % %

Viscose 305 14 56 6% 71% 30%

Polyester 896 32 162 7% 8% 31%

Acrylic 80 21 25 -6% 15% 16%

Other MMF fiber

4 17 2 4% 14% -4%

Total MMF 1285 84 245 6% 17% 29%

Cotton 5525 58 1258 6% -12% 10%

Silk 20 6 1 3% -7% -37%

Jute 1780 91 309 -2% 6% 31%

Wool 45 98 7 0% 1% 16%

Total fiber 8655 337 1810 4% 2% 14%

28

Indian Yarn Supply Scenario

All numbers are rounded off *MMFY: Man-Made Filament YarnSource: Ministry of Textiles, Technopak Analysis

•India’s yarn production is around 6.3 million tons. The yarn production increased at a CAGR of 6% between 2005-06 and 2010-11. In 2010-11, 23% of the yarn produced was exported.

Yarn (2010-11) Production Imports ExportsProd.Growth (5 yr CAGR)

Imports Growth

(5 yr CAGR)

Exports Growth

(5 yr CAGR)

Vol. (‘000 tons)

Vol. (‘000 tons)

Vol. (‘000 tons)

% % %

100% cotton spun yarn 3490 4 698 7% -1% 4.80%

Cotton blend spun yarn 797 32 98 6% 12% 3%

100% non cotton spun yarn 426 69 224 4% 27% 8%

Other Spun Yarn 1223 101 322 5% 21% 6%

Total Spun Yarn 4713 206 1020 6% 20% 5%

MMFY * 1549 130 452 6% -4% 24%

Viscose Filament Yarn 41 13 6 -5% 32% -10%

Polyester Filament Yarn 1462 19 246 6% -28% 18%

Nylon Filament Yarn 33 2 2 -2% -29% -18%

Other MMFY 13 96 198 0% 16% 44%

Total Yarn 6262 336 1472 6% 3% 9%

29

Indian Fabric Supply Scenario

All numbers are rounded offSource : Ministry of Textiles, Technopak Analysis

•India’s fabric production is 62559 million square meters, increasing at 5% CAGR between 2005-06 and 2010-11. The overall growth is higher for knit fabric compared to woven fabrics

Fabric (2010-11) Production Imports ExportsProd.Growth (5 yr CAGR)

Imports Growth (5 yr CAGR)

Exports Growth(5 yr CAGR)

Vol. (mn sq mtrs)

Vol. (mn sq mtrs)

Vol. (mn sq mtrs)

% % %

Knit fabric 14634 693 337 7% 25% 27%

Woven fabric 47925 843 2471 4% 10% 9%

Cotton Woven 19460 148 839 5% 1% 6%

Synthetic Woven

21943 200 1213 4% 4% 13%

Other Woven 6522 495 419 2% 18% 4%

Total Fabric 62559 1536 2808 5% 16% 10%

30

Technical Textiles Market

All numbers are rounded off, Source: Source : Ministry of Textiles, Technopak Analysis

•India’s technical textiles market stands at INR 64,650 Crores (USD 14 billion) and is expected to grow at a CAGR of 10%

Sl.No Segment 2011(E ) 2016(P) 2021 (P) CAGR

1 Packtech 27010 55350 81520 12%

2 Clothtech 7780 9310 10350 3%

3 Hometech 10440 17180 27650 10%

4 Mobiltech 4880 9230 12940 10%

5 Indutech 3500 4075 4430 2%

6 Sporttech 2410 3010 3420 4%

7 Buildtech 3040 5490 7490 9%

8 Meditech 1990 2530 2910 4%

9 Protech 2295 4570 6570 11%

10 Agrotech 790 1470 2050 10%

11 Geotech 440 880 1290 11%

12 Oekotech 75 105 130 6%

Total 64650 113200 160750 10%

INR (Cr)

31

Production of Textile Machinery in India

All numbers are rounded off, Source : Textile Machinery Manufacturers’ Association, India

•Around 50% of the total textile machinery demand in India is met by indigenous machines

Category 2006-07 2007-08 2008-09 2009-10 2010-11

Spinning & Allied Machines 3,423 3,662 2,417 2,105 3,500

Synthetic fiber/yarn 584 625 413 830 900

Weaving & allied machines 581 622 410 495 600

Processing machines 594 635 419 460 700

Miscellaneous (Spinning, weaving and processing machines)

173 185 122 120 150

Testing/Monitoring Equipment 114 122 80 30 50

Hosiery Machines 47 50 33 35 50

Parts and Accessories 237 253 167 170 200

Total Production 5,753 6,155 4,063 4,245 6,150

Exports 425 640 607 525 650

Imports 6021 4332 3802 4500 5000

Total Domestic Demand 11349 9847 7258 7583 10500

% of Total Demand Met by Indigenous Machine

47 56 48 49 53

INR (Cr)

32

Employment in Indian Textile and Apparel Sector

*Others include Cotton/Man-made fiber/Yarn Textile/Mill Sector, Man-made fiber/Filament Yarn Industry, knitting and processing sector, jute industry Source : Office of Textile Commissioner, India

•Textile and apparel sector is the 2nd largest employment provider, next only to agriculture

•Contribution of this sector to total factory industrial workforce stands at 19%

•Contribution of readymade garment sector to total employment in textile sector has improved from 17% in 2006 to 25% in 2011

Employment (mn) Break-Up of Employment in Core Textile Industry

3345 52

55

6069

88

105

121

2006 2011 2016 (P)

Textile Industry Allied Industry

33%

25%

17%

11%

7%7%

2011

Handicraft and Handloom Ready Made Garment Sericulture

Decentralised powerlooms Woollen Others*

39%

17%

17%

15%

4%8%

2006

33

Textile and Apparel Exports Projections for India

All numbers are rounded off Source: UN Comtrade, Technopak Analysis

•Exports from India are expected to grow at 10% CAGR for next decade

•Export growth rate of apparel will continue to be higher than that of textiles

1324

4418

26

38

31

50

82

2011(E ) 2016(P) 2021(P)

Apparel Textiles Total Exports

10 yr. CAGR

8%

13%

10%18%

8%

7%

6%

4%

57%

USA UAE UK

Garmany France Others

39%

16%14%

14%

8%

9%

Product-wise Exports Break-UpIndia’s Textile & Apparel Exports Projections (USD bn)

Country-wise Exports Break-Up

Apparel Yarn Fabric

Fiber Made-ups Others

Changing Trends and Opportunities in Indian Apparel Retail

35

Modern Apparel Retail

•The growth in the apparel segment will be primarily driven by the growth in Modern retail. Currently comprising 18% of the total market, the modern retail share is poised to grow sharply over the next 5 years to contribute a 25% share

•The increased presence of retail formats across hypermarkets, specialty retail formats, cash & carry as well as e-commerce shall drive growth of modern retail

•An increasing number of international brands across formats shall foray into India to leverage the potential. Keen competition is driving international brands to adopt ‘made for India’ models leading to higher acceptance and thus increased share from around 18% in 2011 to 25% over the next five years.

Modern Apparel market share (USD bn)

Presence of international brands in the modern apparel retail

40

63

7.0

16

2011 2016

Total Market Modern Retail

Total market CAGR : 9%Modern Retail CAGR : 18%

82%

18%

2011

75%

25%

2016

Domestic Brands International Brands

36

Changing Classification of Consumer’s Wardrobe

Need-Based Clothing

•Shirts

•Trousers

•Jackets

•Sarees

•Salwar Kameez

Key purchase parameters

Occasion Specific Dressing

•Sports/Gym wear

•Occasion specific ethnic wear

•Casual wear

•Office wear

•Night Wear

•Party wear

•Work wear

Detail Oriented

•Design-based assortments for occasion wear

•Fast fashion

•Eco-friendly apparel

•Technical Garments like temperature

controlled/ IT-embedded garments etc.

1 0 y e a r s a g o C u r r e n t A f t e r 1 0 y e a r s

Basic Function + Comfort + Price Look + Trend Fashion+ Exclusivity + Technical Function (smart)...

37

Modern Retail : Apparel, Footwear & Accessories Market

•The foray of international brands has primarily led to the trend of the accessorized and ‘complete lifestyle’ look.

•Thus, the footwear and accessories tends to witness a high penetration of modern retail. Further, the increase in ‘casualization’, ‘fast fashion’ coupled with youth centric fashion shall continue to fuel the growth of the footwear and accessories segment over the next few years

Footwear & Accessories Market (In USD bn) Modern Retail : Significant Penetration

2011 2011

Total Market Modern Retail Traditional Retail Modern Retail

5.5

1.5 74%

26%

38

New Boundary Lines…

Mid-sized companies foraying into the retail sector

• Mid-sized companies are keen to exploit the opportunities in India leading to an increasing number of companies diversifying through forward integration into the retail sector

Indian brands venturing into international markets

• Having built successful brands within the domestic territory, Indian lifestyle and apparel brands are venturing into international markets in order to enhance brand salience

Penetration of brands in Tier I and Tier II cities

• India shall continue to witness the emergence of Tier I and Tier II cities as key hubs of consumption. Indian as well as international brands are ensuring penetration of these markets for growth

39

New Product Opportunities

Kidswear:

•The high percentage of kids within the population and the number of double income parents, coupled with increasing exposure to global brands, has been fueling high growth of this sector across the mass and premium segment

Denim:

•The denim market is witnessing both value and volume growth. While the mid-value segment is driving volume growth, the value growth is due to increased demand in enhanced product attributes- fashion quotient, stretch and lightweight fabric, styling and detailing

Contemporary ethnic wear for women:

•The increasing number of women within the workforce coupled with the keen desire to experiment will lead to the growth of contemporary ethnic wear with trendy and comfort elements

40

New Product Opportunities

Lingerie:

•Increasing share of western wear in the wardrobe, the trend of occasion and outfit-based innerwear and the growing awareness and desire to indulge in branded intimate apparel is driving growth of the lingerie subcategory

Lifestyle Accessories:

•Lifestyle accessories are finding high acceptance across all consumer segments, viz. youth, men’s and women’s. This is leading to an high growth opportunity across all products, i.e. shoes, handbags and wallets, travel and fashion accessories

Active & Comfort wear:

•Enhanced lifestyles, with varied and multiple activities packed within a day, are leading to Activewear and Comfort wear as an emerging subcategory. Products with functional and comfort attributes at smart prices will drive growth within this segment

Annexure: Assumptions & Definitions

42

Assumptions & Definitions

Key Assumptions

•Growth for market is in nominal terms

•Exchange rate (USD to INR) maintained at Rs 47 for 2011 market and future projections

•All figures have been rounded off

Definitions

•CAGR: Compound Annual Growth Rate

•P: Projected numbers for future years

•E: Estimated numbers

•EBITDA: Earnings Before Interest, Tax, Depreciation and Amortization

•INR: Indian National Rupee (Rs)

•MMF: Man-Made Fiber

•MMFY: Man-Made Filament Yarn

•mn: Million

•bn: Billion

43

Definitions: Apparel Product Categories

•The following are the broad categories of apparel and respective products in each category

Menswear (Male > 14 yrs)

Shirts Woven shirts (full sleeve and half sleeve)

Trousers Woven trousers (formal wear, casual wear)

Suits Formal Suits , safari suits, coats

Winterwear Sweaters, jackets, jerseys, shawls etc.

T-Shirts Knitted T-shirts

Denim Jeans, denim tops

Dailywear Woven & knitted pyjamas / shorts worn for daily use

Activewear Sportswear, Gymwear, Swimwear etc.

Ethnic Kurta Pyjamas, Sherwani, Dhoti, Lungis etc

Innerwear Men’s briefs, vests etc.

Others Ties, Socks, handkerchiefs , gloves and other accessories etc.

Boyswear (Male < 14 yrs)

Tee/Shirts – Boys Boys’ t-shirts, woven shirts

Denim – Boys Boys ‘jeans , denim shirts etc.

Bottomwear – Boys Boys’ trousers , shorts, corduroys, cargos etc.

Ethnic – Boys Boys’ kurta pyjama, sherwani etc.

Winterwear– Boys Boys’ sweaters, jerseys, jackets etc.

Uniforms- Boys School uniforms

Others – Boys Accessories like socks, gloves etc.

Womenswear (Female > 14 yrs)

Saree Sarees Salwar Kameez / Ethnic Salwaar Kameez Dupatta, lehenga, churidar, dresses etc. Tops/shirts Woven tops / shirts / dresses mostly for formal wear T-Shirts Knitted T-shirts for casual wear / party wear Denim Women’s jeans and denim tops Formal Jackets Women’s suits jackets for formal wear Sleepwear Nightwear including maxi, nighties etc. Trousers/skirts Women’s trousers (formal and casual), capris, skirts etc Innerwear Women’s lingerie items (bras, panties, camisoles etc.) Blouse/petticoat Saree woven blouses and petticoat Winterwear Sweaters, jackets, shawls etc. Others Accessories including bags , gloves, handkerchiefs etc.

Girlswear (Female < 14 yrs)

Bottomwear – Girls Girls trousers, skirts etc. Ethnic – Girls Salwaar Kameez Dupatta, Churidar etc. Tee/Shirts – Girls T-shirts, woven shirts Denim – Girls Jeans, denim tops etc. Dresses – Girls Frocks, dresses etc. Winterwear – Girls Sweaters, jackets etc. Uniform – Girls School uniform Others – Girls Accessories like socks, scarves etc.

44

Definitions: Apparel Product Categories

Technical Textiles

Agrotech Agriculture, horticulture and forestryBuildtech Building and constructionClothtech Technical components of shoes and clothingGeotech Geotextiles, civil engineering

Hometech Components of furniture, household textiles and floor coverings

Indutech Filtration, cleaning and other industrial usage Meditech Hygiene and medicalMobiltech Automobiles, shipping, railways and aerospaceOekotech Environmental protectionPacktech Packaging Protech Personal and property protection Sporttech Sport and leisure

Home Textiles

Bed Linen Bed Sheets, bed covers, quilts, duvets, comforters, pillows etc.

Blankets Blankets used for warmth covering during sleep Curtains Made ups hanged for covering doors and windows Kitchen Linen Aprons, table mats, oven mitts etc Rugs and Carpets

Textile floor covering

Towels Bath towels, bath robes etcUpholstery Sofa covers etc.

45

About Technopak

India’s leading management consulting firm with more than 20 years of experience in working with organizations across consumer goods and services.

Founded on the principle of “concept to commissioning”, we partner our clients to identify their maximum-value opportunities, provide solutions to their key challenges and help them create a robust and high growth business models.

We have the ability to be the strategic advisors with customized solution during the ideation phase, implementation guide through start-up and a trusted advisor overall.

Drawing from the extensive experience of more than 175 professionals, Technopak focuses on six major divisions, which are Fashion (Textile & Apparel), Retail & Consumer Products, Healthcare (Strategy & Design), Education, Food & Agriculture and Leisure & Tourism.

Our key services are:

Business Strategy: Assistance in developing value creating strategies based on consumer insights, competition mapping, international benchmarking and client capabilities.

Start-Up Assistance: Leveraging operations and industry expertise to ‘commission the concept’ on turnkey basis.

Performance Enhancement: Operations, industry & management of change expertise to enhance the performance and value of client operations and businesses.

Capital Advisory: Supporting business strategy and execution with comprehensive capital advisory in our industries of focus.

Consumer Insights: Holistic consumer & shopper understanding applied to offer implementable business solutions.

46

Strategy & Planning• Business Entry• India Entry & Partnerships• Growth and Diversification• Industry Studies - Benchmarking• Trends etc.

Mergers and Acquisitions / JV’s• Partner Search• Due Diligence• Investment Evaluation• Partnership Structure

Training• Skill Enhancement• Soft Skills• Managerial Development

Performance Improvement

Leveraging techno-managerial expertise for overall performance enhancement of client’s manufacturing facility; focus on development and implementation of result-oriented strategy

Start-Up Assistance

Start-up of apparel manufacturing business and plants, leveraging operations and industry expertise to ‘commission’ the ‘concept’ on a turnkey basis

Skills Development

Leveraging technical expertise for setting up training center for operators based on scientific methodology

With almost 20 years of experience in delivering end-to-end solutions to the entire gamut of the textile industry, right from fibre to retailing, the Fashion& Textile division at Technopak assists the textile and apparel organizations in optimizing their profits through enhancement and expansion. Many leading Indian and international Textile manufacturers and Apparel brands have benefited from our offerings in the areas of business planning and strategy, apparel operations, supply chain management and strategic alliances. Our team consists of top calibre advisors who have worked closely with a diverse group of clients comprising textile manufacturers, apparel retailers, garment manufacturers and exporters, apparel sourcing organizations, trade promotion councils, industry associations, international development bodies, and financial institutions as well as central and state governments.

About Fashion - Textile & Apparel Division

Textile Operations• Project Management

Consultancy (PMC)• Construction Management

Consultancy (CMC)• Technology Selection• Techno-economic Feasibility

Report• Lean Management

Public Private Partnership• Mega Cluster Development• Skill Development

• Textile Parks

Fashion & Textile Services Apparel Operations Services

47

Retail & Consumer ProductsTechnopak aids retailers and consumer product companies in formulating growth strategy and performance enhancement mandates. Over the past two decades, we have worked on various facets such as entry into the Indian market, development of new category, activation of new retail formats, channel development, product extension, region expansion etc. One key reason why Technopak is considered the industry leader is the relentless focus on the Indian Market. We help clients understand the market dynamics in India and help them arrive at the best method to grow business in India. Our Retail and Consumer product expertise helps gain a competitive edge by providing execution capabilities and corporate strategies.

Healthcare Strategy & DesignAt Technopak, our team is dedicated to assist healthcare clients manage their businesses through innovative solutions focusing on short-term as well as long-term results. Our expertise in the field of strategy development and implementation assistance, and performance enhancement has allowed us to perform various assignments across the entire healthcare spectrum and at various geographical locations. Our team comprises of architects, planners, designers, engineers, business analysts & research professionals offers a variety of services that cover the entire gamut of Hospitals and Healthcare operatives.

The Healthcare Design division was set up in 2008 and comprises of a dedicated team of professionals with wide experience in the development of projects related to the Healthcare industry. Our team assists in creating “healing environment” for the hospital, encompassing state of the art technology, and supporting both the comfort of the patient and the patient care comfort of the staff.

Food & AgricultureTechnopak’s Food Services & Agriculture team comprises of established domain experts who build and enhance the business performance of organizations which are either working in the sector or are willing to enter this space. Our end-to-end solutions are customized as per the business’s requirements and capabilities. We continuously strive to create strong industry relationships and work for a global footprint by delivering a wide range of services to organizations that operate or wish to operate in the Food and Agriculture sector, in India as well as internationally.

EducationTechnopak’ Education division has a vast understanding of the sector in terms of industry environment, growth potential, regulation and policy, which has enabled us to become a thought leader in the sector. Technopak caters to all the education segments – K-12, Higher Education, Vocational Training and ancillaries. Innovative business models and government thrust on privatization has led to assertive participation by private organizations. Such participation spans various levels of investment and operational scale, be it organization planning for expansion in the country or foreign institutions aiming to foray into the Indian education sector.

Our Other Divisions

48

Authors

Amit Gugnani, Senior Vice President

Pakhie Saxena, Associate Director

Peush Narang, Principal Consultant

B.Prakash, Senior Consultant

Kanti Prakash Brahma, Consultant

Disclaimer •This information package is distributed by Technopak Advisors Private Limited (hereinafter “Technopak”) on a strictly private and confidential and on ‘need to know’ basis exclusively to the

intended recipient. This information package and the information and projections contained herein may not be disclosed, reproduced or used in whole or in part for any purpose or furnished to any other person(s). The person(s) who is/are in possession of this information package or may come in possession at a later day hereby undertake(s) to observe the restrictions contained herein.

•The information contained herein is of a general nature and is not intended to address the facts and figures of any particular individual or entity. The content provided here treats the subjects covered here in condensed form. It is intended to provide a general guide to the subject matter and should not be relied on as a basis for business decisions . No one should act upon such information without taking appropriate additional professional advise and/or thorough examination of the particular situation. This information package is distributed by Technopak upon the express understanding that no information herein contained has been independently verified. Further, no representation or warranty (expressed or implied) is made nor is any responsibility of any kind accepted with respect to the completeness or accuracy of any information as maybe contained herein. Also, no representation or warranty (expressed or implied) is made that such information remains unchanged in any respect as of any date or dates after those stated here in with respect to any matter concerning any statement made in this Information package. Technopak and its directors , employees, agents and consultants shall have no liability (including liability to any person by reason of negligence or negligent misstatement) for any statements, opinions, information or matters (expressed or implied) arising out of, contained in or derived from, or of any omissions from the information package and any liability whatsoever for any direct, indirect, consequential or other loss arising from any use of this information package and/or further communication in relation to this information package.

•All recipients of the information package should make their own independent evaluations and should conduct their own investigation and analysis and should check the accuracy, reliability and completeness of the information and obtain independent and specified advise from appropriate professional adviser, as they deem necessary.

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T: +91-124-454 1111, F: +91-124-454 1198

Technopak Advisors Pvt. Ltd.

For further information, please contact:

Amit GugnaniSr. Vice President

[email protected]: +91 9871755992

Amit MishraAssociate Director

[email protected]: +91 8800944558

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