textile project nirvana

7/28/2019 Textile Project NIRVANA

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PROJECT REPORT ONPROJECT REPORT ON

WEAR IT, TO ACHIEVE ITWEAR IT, TO ACHIEVE ITSubmitted To: Submitted By:


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Executive SummaryExecutive Summary

is not just a physical identity, but it is the dream of the promoter tocontribute to the society. This is a garment manufacturing company, whichdirectly gets the raw material (fabric/ cloth) and after converting it in ready madegarment sell it to foreign customers, export house and domestic distributors &retailers.

The unique-selling proposition of will be its world class innovative andqualitative design at attractive prices.

ObjectivesObjectives

1. Provide world class latest design to our customer.

2. No compromise with respect to quality.

3. To become a company for social cause, contribute to society in various

philanthropic ways.

The common values of our organization on which we established are:

customer-orientation

professionalism

creativity

team spirit / collegiality

VisionVision

To provide products with ultimate design and uncompromised quality.


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MissionMission

To transform the Company into a modern and dynamic Textile Products

manufacturing Company and to provide quality products to customers and explore

new markets to promote / expand sales of the Company through Good

Governance and foster a sound and dynamic team, to promote employee

participation, so as to achieve optimum profitability for The Company for

sustainable and equitable growth and prosperity of the Company, its employees

and shareholders.

Organisation ChartOrganisation Chart

Sumedh.K

Logistics &Distribution

Krishna.N

Production

Manager Mehul.C

Marketing

Manager

Varun.K

FinanceManager

Sunil.V

SalesManager

CEO

Amit.H

Ankit.D

R & D


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Share Holding PatternShare Holding Pattern

IndoGarment is fully private limited company, stake equally owned by six

promoters.

Why Textile IndustryWhy Textile Industry

A worldwide increase in demand for Indian textiles and garments.

The apparel industry is the largest source of foreign exchange flow into thecountry with the garments exports accounting for almost 16% of the total exports

of the country. The industry is very vast with over 30,000 readymade garments

manufacturing units and employs nearly three million people.

PROMOTERS SHA

16.66

16.6616.66%

16.66%

16.66%

Sumedh. King some exemptions. OLI in Maharashtra.


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There is great demand for Indian readymade garments the world over. They are

renowned in the international market for their durability, high quality and

exquisite work. The ready availability of highly skilled cheap labour is one of the

primary reasons for Indian garments being so economically priced. Apart from

this there are other factors in favour of the Indian garments industry like the cost

effectiveness in manufacturing, raw materials and quick adjustment to what will

sell, offering high quality at competitive prices, shorter lead times and a virtual

monopoly in embellishments.

The lowering of customs duties on imported textile machinery

With the lowering of the customs duties, removal of quantitative restrictions and

phasing out of MFA, the Indian textile industry is going to face fierce competition

not only in exports but also in domestic market. Thus the industry will have to

improve its efficiency and productivity to meet the emerging global competition.

The new Policy is targeting textile exports to reach US$ 50 billion by 2010, of

which the share of garment exports being US$ 25 billion.

Budget Impact

The budget will have an overall positive impact on the textile industry, which is

happy to receive the expected Fiscal Stimulation Package. The main thrust for the

textile sector, is to have a moderate rate structure, to complete the CENVAT chain

to promote compliance, to encourage modernisation and to eliminate evasion.

Reduction of duty across the board - The textile industry which suffers from

low level excise compliance of about 35-40% duet its complicated structure

and sectorial disparities has been granted a special merit rate of excise duty.


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Lowering of excise duty along with levy of excise duty at weaving and knitting

stage will complete the Cenvat chain. Its also expected that at such low and

special merit rate the overall compliance level of the industry will move up

significantly. Reduction in Customs duty that will enhance the imports from

US and EU countries. With the result the decentralized sector namely,

powerloom, handloom and small garmenting units would now be relieved of

problems relating to maintaining excise records and complying with the excise

procedures. Additional excise duty on textiles & textile articles (AT&T) and

Additional Excise Duty have been abolished. Basic Custom Duty on various

textile machinery and spare parts to 5% has also been reduced. Reducing import duty on textile machineries and spares - Lowering of

customs duty on textile machinery from 25% to 5% will fill the gap and meet

the need of investment both for modernization and capacity creation mainly in

weaving and processing sectors.

Extending the scope of Textile Up-gradation Fund

The Export Promotion Credit Guarantee Scheme has been extended to thetextile sector (limit reduced to Rs.10 million).

The ERMI Units have taken the lead in incorporating IT in the textile sector.

[Use of ERP and CAD].

Government initiatives for special package for modernization of power looms

and textile infrastructure development scheme, in addition to existing TUF

scheme will provide opportunity for power looms to upgrade and restructure to

meet the challenges.

Our ProductOur Product

Designer Kurtas


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We being Indian exporters will use this opportunities to make Indian

culture global. Kurta is a hardcore traditional Indian wear and the way it is

been glamorized by Indian designers it will certainly take on international

markets by storm.

SWOT ANALYSIS- INDIAN TEXTILE INDUSTRYSWOT ANALYSIS- INDIAN TEXTILE INDUSTRY

Strength Weakness

Abundant RM availability

Low cost Skilled Labour

Presence across the Value Chain

Growing Domestic Market

Fragmented Industry

Historical Govt. Policies

Lower productivity and cost

competitiveness

Opportunities Threats

Post 2005 Challenge

R&D & product development

Competition in domestic market

Historical Govt. Policies

Regional Alliances.

STRENGTHSSTRENGTHS1. Abundant Raw Material Availability: This will allow the industry to cut

costs and reduce overall lead-times across the value chain. India is one of the

largest producers of Natural and Man-made fibre.


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Since our company Indo Garment Industries is situated in Mumbai (Maharashtra)

it has the advantage of being in close proximity of sources of both Natural and

Man-Made fibre and fabric as well as access to important fibre through excellent

ports (Eg. JNPT)

2. Low Cost of skilled labour: This provides a competitive advantage for the

industry. Maharashtra has one of the best available skilled labour force in textile

due to existence of traditional textile centres- Mumbai, Sholapur, Amravati etc.

3. Presence across the Value Chain: Provides a competitive advantage when

compared to countries like Bangladesh and Sri Lanka who has developed

primarily as garmenters. The presence across the value chain resulted in Reduced Lead-Times: Manufacturing capacity present across the entire

product range enables textile companies and garmenters to source their

material locally and reduce lead times. Especially Maharashtra has presence

across the entire value chain- yarn, fabric, process houses, garmenters and

access to excellent ports.

4. Growing domestic markets: Growing domestic markets in India allows

manufacturers to Mitigate Risks while allowing them to build competitiveness.

Domestic markets in India are very sensitive to fashion and fads and this has

resulted in development of very responsive garment industry. Also very low per

capita consumption of textile in India indicates significant potential for growth.

WEAKNESSSESWEAKNESSSES

1. Fragmented Industry: Leading to lower the ability to expand and emerge as

"World Class" Player. In case of Maharashtra the industry is extremely

fragmented with significant section of the industry is still in the power loom

sector- in centres like Bhiwandi.


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Degree of Fragmentation in Indian Textile Industry.Degree of Fragmentation in Indian Textile Industry.

Power loom sector -63%

Handloom Sector -14%

Mill Sector - 4%,

Hosiery Sector -19%

2. Historical Regulations: Though relaxed continue to be an impediment to

global competitiveness. These regulations resulted in complex industry structure,

which is currently an impediment Eg. Pre-2000, Garmenting was reserved for the

SSI sector, which was resulted in most unit being set-up with small capacities.Knitted garments continue to be reserved for SSI sector.

3. Lower Productivity and Cost Competitiveness: Low cost competitiveness

has hampered the ability to compete with low cost global players. Labour force in

India has a much lower productivity as compared to competing countries like

China, Sri-Lanka etc. The Indian Industry lacks adequate economies of scale and

is therefore unable to compete with china and other countries. Costs like Indirect

Taxes, Power and Interest Rates are relatively high in India as compared to the

competing countries.

4. Technology obsolescence: Technological Obsolescence has resulted in the

need for significant technological investments to achieve world-class quality.

Large portion of the processing capacity is still obsolete. While state of the art

technology mills exist, majority of the capacity lies currently with the power loom

sector. This has also resulted in low value addition in the industry.

OPPORTUNITIESOPPORTUNITIES


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1. Post-2005 challenges: Post 2005 is s huge opportunity that needs to be

capitalised. Global Trade is expected to be triple from the current USD 305 Bn to

USD 856 Bn.

2. New Product Development: Indian companies need additional focus in order

to move up the value chain and capture a greater global market share. Indian

companies needs to increase focus on product development like new specialized

fabric like Smart Fabrics, Specialized treatments etc. At the same time Indian

garment industry should stress on faster turnaround times for design samples. To

facilitate the process of new product development we should increase the use of

CAD to develop designing capabilities in the organization and developing greateroptions. Indian garment industry should invest in trend forecasting to enable

growth of the industry in India.

THREATSTHREATS

1. Competition in global markets: Almost all the major players in the industry

are competing with each other not only on the basis of lower prices but also on

better quality. Competition is not likely to remain just in export space, the

industry is likely to face competition from cheaper imports as well. This is likely

to affect the international industry and may lead to increase consolidation.

2. Ecological and Social awareness: Increasing Social and Ecological awareness

is likely to result in increased pressure on the industry to follow international

labour and environmental laws. Developed markets have seen extensive

developments in the form of increased consumer consciousness on issues such as

usage of polluting dyes, usage of child labour, unhealthy working conditions etc.

The Indian Industry need to prepare for the fall-out of such issues by improving

its working practices.


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3. Regional alliances: Regional Trade Blocks play a significant role in the global

garment industry with countries enjoying concessional tariffs by virtue of being

member of such blocks/alliances. Indian industry, would need to be prepared to

face fall-out of the post 2005 scenarios in the form of continued barriers for

imports.

INDUSTRY ANALYSISINDUSTRY ANALYSIS

Competitors of Indo-Garment Industry

The apparel industry is one of India's largest foreign exchange earners, accounting

for nearly 16% of the country's total exports. The 1996 Indian textile exports

approximately amounted to Rs.35,000 crores of which apparel occupied over

Rs14,000 crores.

It has been estimated that India has approximately 30,000 readymade garment

manufacturing units and around three million people are working in the industry .

Today not only is the garment export business growing, enthusiasm in the minds

of the foreign buyers is also at a high.Today many leading fashion labels are being

associated with Indian products. India is increasingly being looked upon as a

major supplier of high quality fashion apparels and Indian apparels have come to

be appreciated in major markets internationally. The credit for this

goes to our exporter commmunity.

Consistant efforts towards extensive market coverage, improving

technical capabilities and putting together an attractive and wide


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merchandise line has paid rich dividends. But till today, our clothing industry is

dominated by sub-contractors and consists mainly of small units of 50 to 60

machines. India's supply base is medium quality, relatively high fashion, but small

volume business.

The Top 10 competitors are as follows:1) Indian Rayan & Inds 2) Ambattuer Clothing

3) Rupa & Co. 4) Nahar Spinning Mills

5) Raymond Apparel 6) S P L Industries

7) Maxwell Industries 8) Maral Overseas

9) Zodiac Clothig Co. 10)Eastern Silk Inds

LOCATIONLOCATION

Market Share of Apparel IndustryMarket Share of Apparel Industry

7.6

7.55

4.89

3.8

3.57

2.74

2.74

2.31

2.31.81

58.13

Indian Rayon & Inds

Ambattuer Clothing

Rupa & Co.

Nahar Spinning Mills

Raymond Apparel

S P L Industries

Maxwell Industries

Maral Overseas

Zodiac Clothig Co.

Eastern Silk Inds

Others


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Location is the one of the major factor to look in this Industry and especially in

our firm which is mainly concentrating on Exports.

There are lot of options in selecting this location, each state provides special areas

for attracting the firms and do business by giving some exemptions.

Apart from these the. Some of the benefits that they are providing are as follows:

These Units arefree from plethora of rules and regulations governing

import and export.

100% Foreign direct investment in manufacturing sector allowed through

automatic route.

No industrial licensing restrictions on products reserved for Small Scale

Sector.

No licence required for imports.

And now in SEZs why we selected NAVI MUMBAI SEZ (NMSEZ) because of

the following reasons:

NMSEZ is the heart of Navi Mumbai.

Proximity to International and Domestic transportation infrastructure

Access to Mumbai, a regional and national trading centre for many products

Access to cheap and skilled manpower

Access to social infrastructure - CIDCO

Mile StonesMile Stones

Start Date End Date Budget (Cr.)

Company Set Up Dec 01, 04 Aug 31, 05 2.5 Cr.

Financial Backing Presentations Dec 01, 04 15 Feb, 05 1.3 Cr.


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Central / State Dept. Dec 15, 04 Dec 31, 04 -

Custom / Forex Dept Dec 15, 04 Dec 31, 04 -

Land Acquisition 15 Nov, 04 15 Jan, 05 35 Lakh

Construction 15 Dec, 04 May 31, 05 50 lakh

Recruitment Aug 1, 05 Sep. 30, 05

Raw Material Sep 01, 05 Oct 01, 05 30 lakhs

Production Start Oct 01, 05

Logo Design Sep1, 05 Sep 30, 05

PRODUCTION OF KURTASPRODUCTION OF KURTAS

We have planned production quarterly as under :

1st Qrt 2nd Qrt 3rd Qrt 4th Qrt

Stitch M/Cs 50 50 75 75

Shifts 1 1 1 2

Employees 69 69 69 129

In the first quarter we will be having 50 machines, 1 shift having 8 hours

duration and 69 employees. Machines will import from Germany each costing

1.2 lakh and knitting machine cost 50 lakh.

Number of Kurtas will be produced 165000 in the first quarter.

In second and third quarter we stick to the same production strategy.

In the 4th quarter we will add one more shift assuming that production will

increase.

NUMBER OF EMPLOYEESNUMBER OF EMPLOYEES


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1st Qrt 2nd Qrt 3rd Qrt 4th QrtSupervisor 2 2 2 3Maintenance 2 2 2 3Labours 55 55 55 110

Quality inspection 1 1 1 2Asst. quality inspec. 1 1 1 2Sweeper/cleaner 2 2 2 3Administrators/CA 1 1 1 1Accountant 5 5 5 5Total employees 69 69 69 129

SALARIES

Factory cost Rs./Empl./Month

Supervisor 5500Maintenance 3000

Labours 2500

Quality inspection 7000

Assistant quality inspec. 3500

Sweeper/cleaner 2000Administartion cost

Administarator/CA 7000

Accountant 3000

QUARTERLY PRODUCTIONQUARTERLY PRODUCTION

1shift = 8 hours

Working days per month = 26

Production = 165000

Raw material (i.e. buttons) cost will be Rs.7/- per pair.

Raw material cost = Rs.92812500

To produce each shirt there are 5 processes (cutting, stitching, designer

works, washing & drying, ironing)

Each process takes 12 minutes on an average

Per hour production on 5m/c =264


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Per day production=2115

Marketing and SalesMarketing and Sales

Considering that to the core of our business is stitching cloth and making

ready made garments for the garment companies, the textile industry can be

segmented into the cloth manufactures or fabric manufactures, readymade

garment exporters and companies that are a hybrid of these two.

Most companies in our business are targeting the ready made garment

exporters and the hybrid companies. This part of the business is straight forward

but difficult to differentiate. All these companies pick up the cloth or fabric from

these garment exporters, stitch the garment as per the specifications and then

deliver it to them on time. The margin enjoyed is pretty substantial especially in

the recent past when the demand for these readymade garments has shot up.

We will get in touch with the fabric or cloth manufacturers who supply this

cloth to the readymade garment exporters. The arrangement we intend to have is

that we will aim for a tie up with these companies who can in turn offer the

garment manufacturers a complete set of services. This will ensure that we get a

steady flow of business from these companies though the margins will be thinner

as we need to give them the added margins that they can offer to the garment

exporters. What we will also gain in this process is the experience of handling

large orders which can later be used to get into the market on our own. The fabric

or cloth manufacturers on the other hand will gain in the sense that apart from the

revenue they get on their existing business, they will get additional profits in

terms of the margins on the stitching cost they offer to the readymade garment

manufacturers and what we offer them. They will also be able to differentiate


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themselves as a company offering a range of services which would help them get

more business.

Once our company name is established and we have carved a niche for

ourselves, we would reverse the roles i.e. we will look out for fabric

manufacturers who would tie up with us for assured business while we gain on the

margins. This entire setup works favorably for us mainly because this ensures

optimum utilization of our machinery and man power a must for succeeding in

this industry.

We intend targeting these two segments by positioning ourselves on two

counts quality stitching and excellent prices. Quality stitching would becommunicated to the target segment by highlighting the best imported machinery

that being used in our factories and the highest quality of stitching tools being

employed. The price aspect would be communicated by highlighting the

increased automation of the processes in our factories. The prices are also

achieved as a result of the lower margins that we will be able to absorb.

The 4 PsThe 4 Ps

Product: The product strategy in place is the highest quality of stitching on offer

and the ability to cater to all kinds of fabrics. Its ultimate designs are of

international appeal.

Price: The margins allow us a lot of flexibility in pricing which would be used to

offer better credit periods. Discounts would also be offered based on the size of

the orders.


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Place: As part of our promotion, we intend to offer both pick up and delivery of

the material from and to the garment exporters or the fabric manufacturers.

Promotion: We intend to use advertising in media as a medium to promote our

business. Also we intend to use direct marketing with a core pitch stitching

relationships around which the campaign will revolve. An excellent sales agency

will also be put in place for better results.

STPSTP

SegmentationSegmentationThere are several basis of segmentation some of which are discussed below

Geographic Segmentation:

This involves segmenting on the basis of region, country, continent,

state, and district, urban & rural areas.. So we will be targeting North

East USA which includes New York, Boston & Philadelphia.

Demographic Segmentation:

We will be targeting men falling in the age group of 14-35. The market

places selected comprise of people mainly falling in the same age group.

Also there are many Indians residing over here who can be targeted as

our target market.

Psychographic Segmentation:

Variables such as the personality types, lifestyles & value systems form

the basis of psychographic segmentation. In this case people who are

stylish, open to new trends & traditional will be zeroed upon.

Volume Segmentation:


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Here the volume of purchase or the potential quantity of purchase is the

basis of segmentation. There may be bulk buyers & small scale buyers,

regular buyers & one time buyers. For Kurtas we are targeting young

and middle age crowd which is stylish and responsive to new trend

forming majority of the population.

Target Market SegmentsTarget Market Segments

Targeted primarily to style conscious person one who;

Is casual.

Has affiliation towards cotton material

Views it as fashionable apparel.

Consideration of Profitability:

The profit potential on the premium segment is quite high & a relativelylower volume would provide adequate returns to the firm. But as

competition is increasing day by day, and this product is generally

considered trendy the company will have to depend upon timely R&D in

design & fabric as we plan for a long term stand in the international

market.Market Segmentation & Target Market selection are closely

related to marketing strategy formulation. It is segmentation that leads

the firm to the acquisition of a competitive capability or a distinctive

excellence in catering to the specific needs of target segments of the

market.


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PSYCHOGRAPHIC ATTRIBUTESPSYCHOGRAPHIC ATTRIBUTES

As Youth of modern times who likes to portray an image which is versatile,

flamboyant, cheerful and simultaneously attached with their culture and we are

now targeting those youth by proper utilization of media tools to spread awareness

about our traditional oriented garments.

POSITIONINGPOSITIONINGIt involves the act of fixing the exact locus of the product offer in the chosen

market; it decides how & around what distinctive feature, the product offer has to

be couched & communicated to the consumers.

RESEARCH & DEVELOPMENTRESEARCH & DEVELOPMENTAs we have long term plans for the international markets and our product is

considered as trendy, timely R&D is necessary to retain the interest of the

consumers in the product. Also as time passes we will diversify into other clothing

like designer shirts, T- Shirts etc.


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Pricing on Quarterly basisPricing on Quarterly basis

Particulars Amount ( in Rs.)

Raw material 92812500

Labour 555000

Other manufacturing expenses 1100000

Total 94467500

Duties @ 10 % 9446750

Agency charges 100000000

Distribution cha 14273998

Total 218188248

Total kurtas manufactured are 165000.

Therefore cost price = 218188248/165000 = Rs. 1322 i.e. $ 29

Selling price would be $ 125

Therefore our profit would be $ 96 i.e. Rs.4416/unit.


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BRANDINGBRANDING

Brand is a name or symbol used to identify the source of a product. When

developing a new product, branding is an important decision. The brand can add

significant value when it is well recognized and has positive associations in the

mind of the consumer. This concept is referred to as brand equity

BRAND NAMEBRAND NAME

As we are the players of international market we need to name our brand in way

so that it appeals to that particular market. We have planned as our brandname since it is not only universally understood but also denotes Indian ness.

Brand Punch LineBrand Punch Line

The company name itself will be used to form the punch line of the brand.

means attainment of perfect bliss. That is what will be the kind of feeling the


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end user experiences after wearing our product. Hence the punch line WEAR IT,WEAR IT,

TO ACHIEVE ITTO ACHIEVE IT

Brand EquityBrand Equity

Brand equity is a set of brand assets and liabilities linked to a brand, its name

and symbol, that add to or subtract from the value provided by a product or

service to a firm to that firms customers.

The asset and liabilities on which brand equity is based will differ from context to

context; they can be usefully grouped into five categories:

1. Brand loyalty

2. Name Awareness

3. Perceived Quality

4. Brand association in addition to perceived quality

5. Other proprietary brand assets- patents, trademarks, channel relationship

etc.

Brand Equity provide Value ToBrand Equity provide Value To

Customers by enhancing

customers:

Interpretation / processingof information

Confidence in the purchasedecision

Use satisfaction

Firm by enhancing:

Effeciencies/Effectivenessof Mktg Prog

Brand Loyalty

Prices / Margins

Brand Extensions

Trade Leverage


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We will consider at least three perspectives to view brand equity:

Strong brand equity provides the following benefits: Facilitates a more predictable income stream.

Increases cash flow by increasing market share, reducing promotional costs,

and allowing premium pricing.

Brand equity is an asset that can be sold or leased.

Building and Managing Brand EquityBuilding and Managing Brand EquityIn his 1989 paper, Managing Brand Equity, Peter H. Farquhar outlined the

following three stages that are required in order to build a strong brand, consider it

with the example of

1) Introduction - introduce a quality product with the strategy of using the

brand as a platform from which to penetrate deeper into the market. A

positive evaluation by the consumer is important. Launch of is

based on the same principle.


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2) Elaboration - The brand is easy to remember and develop repeat usage.

There is accessible brand attitude, that is, the consumer easily remembers

his or her positive evaluation of the brand.

3) Fortification - the brand carries a consistent image over time to reinforce its

place in the consumer's mind and develops a special relationship with the

consumer.

Advertising aspectAdvertising aspect

Hoardings: - Electronic hoardings are easy way to advertise new brands that come

to market. So we plan to expose our brand through electronic hoardings through

out the NewYork city

Newspaper & magazine; - Newspaper & magazine advertising is the easiest way

to reach out the masses. Thus impressive advertising through newspaper would

help us to reach our target market effectively

Television ads: - taking cost into consideration advertising through television

becomes occasional but spot on like at the launch of new product and so on.


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Sales promotionSales promotion

Other than the efforts put in by the Sales agency we will even look forward to tie-

up with shopping malls. Also opportunities in entering shopping festivals will be

targeted. A continuous follow-up with the PR agency is necessary for

improvements in methods of building a brand image. Tie-ups with Marketing

agencies over there will help us market our product in a foreign environment.

DISTRIBUTION CHANNELDISTRIBUTION CHANNEL

Manufacturers & exportersManufacturers & exporters

Commission AgentsCommission Agents


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Small independent retailers Large independent retailers Multiple retailersSmall independent retailers Large independent retailers Multiple retailers

ConsumersConsumers

textile project nirvana

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