MARKETING STRATEGIES OF TIRUPUR …shodhganga.inflibnet.ac.in/bitstream/10603/37229/10/questionnaire.pdfi MARKETING STRATEGIES OF TIRUPUR KNITWEAR GARMENT MANUFACTURING EXPORTERS –

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MARKETING STRATEGIES OF TIRUPUR KNITWEAR GARMENT

MANUFACTURING EXPORTERS

– AN ANALYSIS

I request you to kindly give your honest opinion for the following questions. Your

views and opinions will be kept confidential; your kind cooperation for academic pursuit

is solicited.

P.Suguna, Research Scholar, P.S.G.R.Krishnammal College for Women, Coimbatore.

PROFILE OF THE ORGANISATION 1. Name of the organization:

2. Are you member of TEA?

Yes No

3. Type of Exporter:

In house exporter Manufacturing Exporter

4. Type of the organization:

Sole proprietor Partnership Firm Limited company

5. Experience in the field:

Less than 5 Years 5-10 years 10-15 years Above 15 years

6. Type of the capital employed:

Own capital Own and borrowed capital

7. Sources of Finance:

Commercial banks Funding agencies Private financiers

Friends and relatives

ACHIEVEMENTS

8. Status acquired by the company:

No status

Export house Export trading house

Star trading house Super star trading house

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9. Specify your organization’s Annual Turn over:

Less than 5 crore 5 to 10 crore 10-15 crore above 15 crore

10. Specify your organisation’s turnover for the last three years:

Less than 25 crores 25-50 crores 50-75 crores above 75 crores

11. Specify the % of growth in turnover for the current year:

less than 10% 10 – 15% 15- 20 % above 20%

12. Specify the share of export turnover of your company:

Below 0.05% 0.05 %- 0.5% 0.5%-1% above 1%

II MARKETING PRACTICES ADOPTED - kindly tick your preferences appropriately

A. PEOPLE-

13. Who do you think will be important for an export business?

End consumer The buyer An exporter Manufacturing workforce

BUYERS POINT OF VIEW 14. What is the type of buyers you have contacted with?

Fashion oriented companies Specialty Stores Mass merchandisers

Chains stores Small importers

15. What do the buyers expect while pricing the product?

Price based on quality Price based on quantity Competitive pricing

16.w.hat traits from exporters are expected by the buyers? Rank them

Traits RankCommunication skill agility Quality consciousness Discerning Time management/timely delivery Relationship management proactiveness

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17.Which factors initiates the buyers to identify the source of the products:(Rank them)

Factors RankRight cost Logistic mgt Reliability & Relationship Corporate social responsibility Green Marketing Proximity to markets Technology Compliances mgt Timely delivery

END CONSUMER POINT OF VIEW 18.a. Is the customers habits and preference are essential?

Yes NO

b. If the customers’ habits and preference are essential for export of garments, what

are the features they look for?

Style Comfort Colour Design Quality of fabric

19. Rank the factors influencing customer’s perception on quality

Price Fashion & style Brand influence Performance

Ethical

MANUFACTURING WORK FORCE- POINT OF VIEW

20. Specify the percentage of stable employees employed in your organization:

Percentage of stable employees

Below 20%

20-40%

40-60%

60% and above

21. Do you have a marketing department?

Yes No

22. Specify the basis for recruiting your marketing personnel?

Technical back round Experience Commitment to serve the market

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23. How is your retaining capacity of your marketing people?

Excellent V.good Good Average Not good

FROM THE EXPORTERS’ POINT OF VIEW:

24. Why did you opt this business?

love for fashion inherited born in this city profitability

urge to be an entrepreneur social status

25. What do you expect from the buyer?

Flexibility Communicative

Dependability Consistency of orders

26. Specify the method of securing orders

Canvassing Walk in orders Contact established from past records

Web sites

27. Specify the nature of your export orders

Export orders throughout the year Orders of seasonal nature

28. Reasons for not getting orders throughout the year

Seasonal business Competition Market fluctuations

Independent preferences of the importers Rejection in the past

Non conformity with taste and fashions

29. Specify the corporate social responsibility strategy that you have followed.

code of conduct making commitments to the public

consultation with stakeholders environment friendly production and packaging

30. What is your perception towards fashion forecast and trends?

closely linked with business Difficult to understand and conceive

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31. Is it comfortable for you to transform designer’s style to street wears or commercial

styles

Yes No

32. Does working for big brands increase your input costs which brings down your

profits relatively.

Yes No

33. Rank the risk associated with the export of garments

Non acceptance of goods by the buyers currency fluctuations

Quality related problems Payment related problems

Customs formalities related problems at buyers end Buyers country risk

Domestic policies of the government

B. AREA OF OPERATION (PLACE)

34. Why have you chosen this location for business?

Suitable Climate Pursuing family business

Available Infrastructural facilities A centre for all process

Availability of skilled work force availability of raw material /Existence of

hosiery environment

35. Specify your area of operation

Global market Global market and domestic market

36. Which part of the world do you export to?

USA EU Canada Far east countries Middle East Countries

Oceanic countries

37. Do you have an idea of penetrating new market?

Yes No

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38. To develop your market, do you have marketing collaboration abroad?

Yes No

39. Do you have any sourcing office for trims and raw materials abroad?

Yes No

C.PRODUCT

40. Specify the fabric material used in garment manufactured?

Cotton based Woolen based Cellulose fibre(bamboo-viscose)

Synthetic fibre (man made)

41. Specify the segment which you are concentrating (UVR) on?

High value Medium value Low value High & medium value

Medium & low value All

42. What do you export? State the category of your export.

category Men Women Girls Boys Children

Casual only

Causal & Fashion

Casual & Formal

Casual & Leisure

Casual & sports

43. Does your concern own any brands?

Yes No

44. Specify the reason for creating a brand name

Creation of corporate image Independence on the brands

creating identity

45. If not created the brand name, tick the reason

Lack of financial capability Lack of expertise high risk factor

working with buyers own brands Not interested

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46. Do you involve in collective branding?

Yes No

47. If not, specify the reasons.

Lack of clear strategy Lack of funds

conflict of interest with own brands and buyers brand Not interested

48. How frequently do you introduce a new product (new style) in the market?

Less than 3 months 3 to 6 months 6 to 1 year above 1 year

49. Specify the areas in which you would like to improve/ develop your product

Manufacturing process Design development

Introducing latest technical developments in yarn and fabric

50. How would you like to laterally diversify your products, please specify.

Home textiles Technical textiles Smart textiles

51. Do you like to include eco-friendly concepts in your line of product?

Yes No

52. If yes, specify the reason

To promote business To discharge corporate social responsibility

To satisfy the requirement of the buyer

Commitment towards our environment and sustainable world

53. Rate the quality parameters of the product

International standard requirement buyer’s standards Features

Aesthetics

54. Do you use recycling material for packing?

Yes No

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55. How do you develop your samples ahead of the seasons?

Based on buyer’s requirement Based on research department

Both

56. Specify the inspection personnel involved in your garment export business

SGS ITS Buying Agent In house inspection 57. Do you have any research and Development department?

Yes No

D. PRICING POLICIES

58. In your view what factors are important to determine the price? Competition cost of variable inputs Demand & supply

Tariff measures and non-tariff measures

59. Which method do you adopt to ascertain the selling price?

Cost plus Marginal costing Kaizan costing Activity based costing

60. What measures do you feel is important to bring down cost?

Total ERP system Backward integration

Introducing automation of the manufacturing process specialisation

61. Specify your pricing objectives

To capture order To increase the turnover To obtain UVR

To develop the market

62. Specify the pricing strategy that you have followed

Normal mode of pricing competitive pricing fixed margin pricing

63. Specify your terms of pricing

FOB CIF C&F

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E. PROMOTIONAL ACTIVITIES

64. How does your concern market the products directly?

Direct marketing representative agents Joint venture with foreign buyer

65. If through direct marketing, specify the techniques they have followed.

trade fair online marketing Direct meet

66. Which of the following promotional measures do you consider as important for your

export

E. PHYSICAL DISTRIBUTION

67. Mention the lead time that you required exporting your orders?

Less than 40 days 40-50 days 50 and 60 days 60 and above

68. How frequently do you use inland container facilities?

Frequent always sometimes never

69. How will you reduce the cost of transportation?

alternative choice (selecting new shipping company) Collaborative plan

Selection of route

Promotional measures Extremely important

Very important

Important Least important

Not at all

National fair, international fair

One to one marketing

Collaboration plan/joint venture

Cause marketing

Event marketing/sponsorship marketing

Advertisement through websites

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70. Do you give any rebate to your buyer for delayed shipment?

Yes No

If yes, how much

Less than 5% 5-10% 10-15%

71. How do you prefer to choose your terms for shipment?

On a fixed contract with clearing and forwarding agents throughout the year

working on best rates with different forwarders

72. Do you have avail warehousing facility at a port of discharge?

Yes No

73. Please specify some suggestion to reduce transit time.

Choosing the right mode

Outsourced effective logistics management

F. PRESENTATION

74.How do you prefer presentation of your garment

Physical presentation Electronic presentation

Both

75. If through physical presentation, specify the methods

a) sending samples b) showroom presentation c) fashion shows

76. If through electronic presentation, specify the methods

a) CD-DVD b)Web sites c)e-mails

77. Do you think that visual merchandising has positive effect on sales?

Yes No

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IV. ROLE OF GOVERNMENT IN ASSISTING THE INDUSTRY

78. Rank the following government schemes do you consider as effective.

Schemes Rank

TUF(modernization)

TMC(Textile mission for cotton)

Interest subsidy in technical textiles

Assistance provided to apparel training institutions and trainees

Brand equity fund

Market development assistance scheme

79. Specify the subsidy/incentive availed by you, which was given by the government.

Duty drawback Advance/ Duty exemption entitlement scheme

EPCG with DEPB

80. Specify the export credit facilities availed by you from the commercial banks.

Packing credit Post shipment credit

Credit facility for importing capital good. (Second hand)

81. Specify the kind of attention required from the government for the following issues.

Issues High

attention needed

Normal Attention

needed

Less attention

Creating conducive environment for investment

Effective fiscal policy

Bilateral agreement with importing countries

Stable exchange rate policy

Priority to be given to garment industry

Initiative to establish more SEZ

Reduction in cost of energy

Cluster development

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82. Please help in identifying your SWOT by ticking the relevant columns.

III.SWOT: STRENGTH OF THE ORGANISATION

SA-STRONGLY AGREE, A-AGREE, DA-DISAGREE, SD-STRONGLY DISAGREE, NEU-NEUTRAL

WEAKNESS:

Weakness SA A DA SD NEU High capital cost

Technical backwardness

Lack of product specialisation

Limited fabric base

Labour intensive nature

Deficient Pollution control measures

Lack of professionalism

Difficulty in following non-compliances with

orders

Lack of branding capability

Ineffective Marketing information system

OPPORTUNITIES

Strength SA A DA SD NEU Availability of RM

Quality management system

Labour cost advantage

Skilled work force

Design capability

Capability in product development/ adaptation Adoptability to the latest innovation

Effective planning

Accepting the Delivery in small quantity

Communication skill

Strategic alliance

Supply chain management

Cost of finance

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THREATS

83. What is your opinion will the future strategies that ought to be adopted for an

effective and a productive export business? Please tick the appropriate columns for both

the external and the organizational factors. A. EXTERNAL FACTORS

OPPORTUNITIES A SA DA SD NEU Exploring Niche marketing

Integration of information technology

Adoption of global sourcing-knitted garments

Product development and product diversification

Increased use of eco-friendly materials

Market shift towards branded readymade garments

Cluster approach

THREATS A SA DA SD NEU Competition from neighbor hood Changes in trend Environmental changes Fluctuation in exchange value Delay in Technology up gradation Lack of attention in the value added item Govt policy changes with regard to export Pollution problem

External factors SA A N D SD Capacity building consistent with social standards

Competitive market oriented approach

Technology up gradation

Currency fluctuation management –hedging

Market development

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B.ORGANISATIONAL FACTORS

Organisational factors SA A N D SD

Human resource development

Productivity enhancement

Right quality at low cost

Compliance management

Effective ERP

Consistent SWOT analysis

Competitive pricing

Product Diversification

Consistent marketing research

Just in time- Inventory management

On time delivery

Product innovation

Design development

Building indigenous brands

Supply chain management

Business Re-engineering

Effective investment management

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LIST OF PUBLICATIONS

Impact of currency fluctuation on Garment Industry-profit Realisation and

competitiveness, Southern Economist, December 15, 2010-ISSN 0038-4046.

Impact of corporate social responsibility in Garment Industry, Economic Challenger,

April-June 2011- ISSN 0975-1351.

A Study on Strategies for Promoting Technical Textiles-Lateral Diversification,

PRERANA, Journal of Management Thought and Practice, April 2011.-

ISSN:0974-908X

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IMPACT OF CURRENCY FLUCTUATIONS ON GARMENT INDUSTRY

(with reference to Tirupur knitwear Industries)

I. Introduction

The Textile industry in India plays a vital role in the economic development of the

country. The textile industry has been rated as a sunrise industry with the largest foreign

exchange earnings and 8% GDP contributions. The exports of textiles and clothing

products from India have increased steadily during the last 5 years from $13.5 billion in

2003-04 to $22.13 billion in 2007-08. In 2007-08, India’s export of garments had risen

by 9% ($9.69 billion) from the previous year’s exports. However due to Global

economic slowdown, rise in cotton prices, currency fluctuations, dwindling orders and a

decline in the export of textiles and clothing, the textile industry has fallen short of the

target for 2008-09. Against the target $11.62 billion set for the year 2008-09, the

industry could achieve only $8.78 billion in its exports, resulting in just 76% efficiency.

Further India’s clothing exports fell by 13% in January 2010 from that in January 2009.

Currency fluctuations play a major role on the country’s textile industry involved

in exports. The major drag due to currency fluctuations has brought about a drop of 20%

in demand from USA and EUROPE. Companies are however not prepared to quantify the

impact. Due to highly volatile and uncertain currency trends this industry’s cushion to

factorize on the risk is being narrowed, resulting in slowdown of orders as can be inferred

from the tables below, dealing with currency fluctuations against the Dollars and Euro.

CURRENCY FLUCTUATION AGAINST DOLLAR DURING JAN-2008 TO AUGUST 2010 (Bimonthly Fluctuation)

INCREASE /DECREASE IN RUPEE SWAP VALUE

Countries Jan 2008

Mar 2008

May 2008

July 2008

Sep 2008

Nov 2008

Jan 2009

value on 15thMarch

2009

Softening /hardening

Value on 15th August 2010

Softening /hardening

INDIA 39.39 1.52 7.24 -0.77 11.49 6.40 1.86 52.94 34% 46.617 6.32%

PAKISTAN 62.75 0%. 7.88 5.70 9.19 4.29 -2.98 80.17 28% 85.616 5.45%

BANGALADESH 69.80 0.07 -0.04 0.14 -0.18 0.84 -0.82 70.03 0.32% 69.69 0.34%

SRILANKA 114.10 -5.45 0.12 -0.12 -0.14 -1.19 -1.75 115.69 1.39% 112.5 3.19%

CHINA 7.20 -2.5 -1.15 -1.4 0.14 -6.86 7.2 7.56 0.5% 6.79 0.77%

VIETNAM 166.3 0.90 0.58 4.2 -0.18 2.5 3 177.25 9.25% 193.40 16.15%

SOURCE: APPAREL ONLINE April1-15, 2009, p.no.38

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The table reveals the bimonthly currency fluctuations of rupee against dollar.

During the period of January 2008 to March 15th 2009, India’s rupee had softened by

34% but currencies of other countries like Bangladesh, Srilanka, China, and Vietnam

have remained almost the same against the US dollar. From July 2008 to March 2009 the

rupee value continuously softened by 27%. But Pakistan’s rupee had softened only by

13.3 %. While Bangladesh and Srilankan’s rupee softened by only 1.39% and 0.32%

respectively for the whole year. When the rupee swap value as on 15th August 2010

considered in about 18 months time the rupee has hardened by 6.32%. While Pakistan’s

rupee had softened by 5.45%. While currencies of Bangaladesh, Srilanka and China

hardened only by0.34%, 3.19%, 0.77% during the same period.

CURRENCY FLUCTUATION AGAINST EURO DURING JAN-2008 TO MARCH 2009

(Bimonthly fluctuation)

Increase/Decrease in Rupee swap value

Countries

Jan 2008

Mar 2008

May 2008

July 2008

Sep 2008

Nov 2008

Jan 09

value on 15th March 2009

Softening /hardening

Value on 15th August

2010 Softening/hardening

INDIA 58.23 8.2 5.8 -0.8 3.46 -5.3 -2.12

68.47 17.58% 59.88 12.5%

PAKISTAN 92.78 6.85 6.53 2.10 0.05 1.93 -7.2 103.70 11.76% 110.34 -6.64%

BANGALADESH 103.25 6.89 -1.39 0.11 7.47 -10 0.29 90.57 -12.28% 87.71 3.15%

SRILANKA 159.64 6.77 -1.2 -0.2 -7.1 -8.9 3.35 149.63 -6.2% 144.833 3.2%

CHINA 10.64 4.2 -2.3 -1.6 -7.0 -10.9 -0.1 11.08 3.45% 9.74 12%

VIETNAM 238.42 8.68 0.77 4.25 9.02 -8.38 6.70 229.71 -3.6% 248 -8%

SOURCE: APPAREL ONLINE APRIL 1-15,2009 Pno.38

The table shows the Bimonthly currency fluctuations of rupee value against Euro.

India’s Rupee value has weakened continuously compared to its neighboring countries’

currencies which were have been relatively stable. India’s Rupee value had softened by

17.58% from January 2008 to March 15th 2009. But the currencies of Bangladesh,

Vietnam and Srilanka became strong and increased in value by 12.28%, 6.2%, and 3.6%,

respectively. Currencies of Pakistan and China had weakened by 3.45% during the same

period. When the rupee swap value as on 15th August 2010 considered in about 18

months time the currencies of India, Bangaladesh, Srilanka and China had hardened by

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12.5%, 3.15%, 3.2%,12% respectively. While currencies of Pakistan and Vietnam had

softened by 6.64% and 8%.

II. Foreign Exchange Rate System

Indian foreign exchange rate system was on the fixed rate model till the 90’s.

After liberalization of the economy since 1991 the rupee pegging system was switched on

to floating rate model Indian Apparel Industry, which held a competitive position in the

textile exports, has been adversely affected by the fluctuations in the value of rupee.

The volatility of the rupee impacted the shipments from India. During January to

June 2008, the apparel export dropped by 3per cent5 and the industry faced a decline of

4 per cent on UVR (unit value realization) due to 14per cent appreciation of rupee.

However 1per cent appreciation of rupee, profit has fallen by 1.2per cent.6 Many

exporters who had tried to hedge their currency risk by executing Forex derivative

contracts with banks, suffered huge losses on steep fluctuations in the value of rupee as

they were not experienced in finalizing such contracts with banks. Banks also had

increased their interest rate up to 40per cent on term loans.

Even depreciation of rupee did not support much, since the benefit was already

offset by the increase in input cost, processing cost and transaction cost by more than

15 per cent to 20 per cent, compared to the beginning of the financial year. The

approximate 12per cent depreciation of the rupee has been matched by 4per cent increase

in bank interest rates since1st October 2008 with a 3per cent reduction of Duty drawback

rate.

III. Statement of the Problem

Tirupur Garment industry is known for its dynamic entrepreneurs. US being the

major destination of India’s clothing exports account for 27.87per cent of exports. Orders

from US are mostly basic styles, in huge quantities like T-Shirts under garments, ladies

wear, men’s wear, kids wear, sports wear, leisure wear etc., Whereas orders from EU and

Japan are comparatively small but fashion oriented in which Indian exporters excel. Fifty

six per cent of India’s total knitwear exports from Tirupur have been based on the design,

product development and effective merchandising. Exporters in Tirupur cluster are

striving towards planning and marketing the products to leading apparel sellers’

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worldwide. They are recently revamping their knowledge gaining techniques by using

modern information technological systems. Though each and every aspect mentioned

earlier form the core of the industry one important and crucial factor is, every exporter

should upgrade his skill and knowledge on the forex area and the countries economy

which are always a major factor for any export oriented industry. At this juncture the

study aims at drawing an introspective view of the exporters on the impact of currency

fluctuations, and their competitiveness in the global market and to study the remedial

measures taken for the redressal of the issues by the exporters, government agencies and

other support service systems in India.

IV. Objectives of the Study To analyze the competitive position of Tirupur knitwear exporters.

To analyze the influencing factors those cause the forex market fluctuations.

To study the perception of the exporters towards currency fluctuations and the risk

management techniques adopted.

To study the satisfaction level of exporters towards the measures taken by the

Government of India.

To study the exporter’s expectations towards the measures to be taken by the government.

V. Research Methodology The study has been descriptive in nature and has drawn conclusions about the

reactions of the exporters with respect to currency fluctuations during global recession

clubbed with shift in competitiveness. There are nearly 686 registered exporters who are

currently registered in TEA (Tirupur Exporters Association). Of this 216 i.e., 32 per cent

of the total population has been selected as sample respondents by using convenient

sampling method.. A well structured close ended interview schedule with twenty queries

related to competitive position, influencing factors of forex market in India, reason and

impact of currency fluctuations, measures taken by RBI, measures to be taken by the

government and RBI have been framed to collect the primary data from the respondent’s

group. Study period extended to 20 months from 1st January 2009 to 15th August 2010).

The secondary data for the review were sourced from news bulletin of various textile and

research agencies, both official and unofficial newspapers, RBI and WTO reports.

Kendall’s coefficient of concordance was used to analyse the opinion of the exporters.

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VI. Results and Discussion The growth of India’s exports in 2006 was due to a boom in economies around

the world. In 2006, according to WTO, world export growth was around 8per cent but

from 2007export growth reduced to 6per cent due to World economic slowdown,

currency fluctuations and crude oil prices. Indian exports have been partially hit by the

slow down of the global economic pressures.

I Profile of the Exporters The profile of the 216 surveyed respondents is depicted in this section of the

research work.

Table 1: Profile of The Tirupur Knitwear Industry

Particular Respondents Percentage

Nature of Exporter

Manufacturering exporters – in - house 89 41.20 Manufacturering exporters 127 58.80

Years of Experience

Less than 5 years 94 43.52 5-10 years 68 31.48 Above 10 years 54 25.00

Type of Organization

Proprietorship 98 45.37 Partnership 109 50.46 Company 9 4.17

Turn Over for the Year

Below 5crore 72 33.33 5-10 crore 81 37.50 10-15 crore 43 19.91 Above 15 crore 20 9.26

Country Traded & Currency Accepted

Untied States (US Dollar) 125 57.87 Europe Other than U.K(Euro) 73 33.80 United Kingdom’s (Pound) 9 4.17 Japan (Yen) 7 2.78 Saudi Arabia (Riyal) 2 1.39

Source: Primary Data

The sample surveyed has revealed that

i) There has been more number of manufacturers (58.8%) than in house

(41.2%).ii) There is more number of new entrants into the business (43.52%) with <

5years experience, as compared to those with more than 10 years (25%) experience.

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However, considering the risk involved in the export business, respondents with more

than 5 years of experience have constituted 56.48%. 95.83% (45.37+50.46) of the

respondents have either partnership firms or run a proprietary business and only 4% of

the respondents have been Private Limited Companies. 70.83% of the exporters

contacted, have an annual turnover of less than Rs.10crores, whereas those exceeding

Rs.10crores turnover target have been 21.91%. A very small proportion of 9.28% have > 15

crores annual turnover. The popular destination of Tirupur Knitwear industry has been the US

(57.87%) followed by non UK European countries (33.8%) and UK (a mere 4.17%)

II. Competitiveness of Indian Exporters and Factors Influencing Forex market The competitive position of exporters has been challenged by certain factors that

contribute to export market success. This section had dealt with these issues.

Table 2 Factors Reasoned for Competitive Position of Exporters

Features Total Score Mean Rank

Maintaining the Time Frame 1544 7.15 1 Competitive Price Quotation 1461 6.76 2 Conforming to quality standards 1239 5.73 3 Adoption of Latest Technology 791 3.66 4 Creative and unique designing 769 3.56 5 Optimal Production Capacity 766 3.54 6 Following Eco –Label Standards 702 3.25 7 Maintaining corporate social responsibility 504 2.33 8

Results of Kendall’s Co-efficient of Concordance

W S Chi-Square Value Table value

0.534 1045924 807.040 18.475**

** - Significant at 1% level Source: Primary Data In Table 2, 8 variables were ranked by the respondents as the main reasons for

establishing a competitive strategy among them. Total score has been calculated by

multiplying the points given for each rank. Mean values have been calculated by dividing

the total score by the number of respondents. Kendal’s coefficient has been calculated by

adding the ranks assigned by the respondents. Among the eight variables chosen most of

the exporters have ranked first (7.15) for the time frame to be maintained. Competitive

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price quotation has scored the maximum mean next (6.76). Conforming to the quality of

goods exported as per their initial agreement has scored the next highest mean of 5.73.

The adoption of latest technology and creative and unique designing have scored the next

to mean of 3.66 & 3.56 respectively. Optimum production capacity (mean value 3.54)

has been considered as the next important factor. The next two highest mean value have

been 3.25 for maintaining corporate social responsibility and for following eco label

standards (2.33).

To ascertain the consistency with which the respondent exporters have stated their

priorities by meeting competitive standards in the market, Kendall’s Coefficient of

Concordance has been applied with the following hypothesis “Exporters opinion on the

competitive position of Indian knitwear industry significantly varies from one person to

the other”.

W value (0.534, which has been less than ±1) has shown a moderate level of

concordance among the respondents, though chi-square value has highly significant at

1% level of efficiency. Hence the hypothesis framed has been rejected. Thus the

exporters’ have similar opinion on the competitive position of Indian knitwear industry

with respect to the priorities held by the respondents.

Forex market is influenced by many external factors that contribute to the

strategies to be adopted by the respondent exporters. Table 3 has enumerated the

situations under which the foreign market is influenced.

Table 3. Factors Influencing the Forex Market in India Factors Total Score Mean Rank Price of crude oil 1861 8.61 1 Change in interest rate 1481 6.85 2 Fluctuations in export 1441 6.67 3 Inflow of foreign fund 1386 6.41 4 Government policy changes 1158 5.36 5 Changes in foreign exchange reserves 983 4.55 6 Economic data 980 4.53 7 Inflation 931 4.31 8 Foreign currency fluctuations 866 4.00 9 Natural calamities 793 3.67 10 Results of Kendall’s Co-efficient of Concordance W S Chi-Square Value Table value 0.274 1053938 532.292 21.666** ** - Significant at 1% level Source: Primary Data

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The exporters in Tirupur primarily believe that the fluctuations in the Forex

market has been due to current changes in the international crude oil prices which has

scored maximum mean of 8.61. The changes in interest rate by RBI have resulted in the

fluctuations in cost of operations which have impeded the competitiveness of export

market in the international scene. This factor being a core issue in entering the global

scene has been rated as the second most important influencing factor with a mean of 6.85.

The respondent exporter’s contribution to export market is entirely dependent on the

basic fluctuations in export caused due to rising prices and interest rates. This has carried

the weight age of 6.67 mean, establishing the fact that only slight change in policy

decisions can adversely affect the export market. The next highest mean (6.41) has been

assigned by the respondent exporters believes that inflow of foreign fund has cause the

market volatility. Changes in Government policies have been ranked fifth by the

respondent exporters with only a moderate mean of 5.36 indirectly recording the fact that

in India, in the current situation the government policies do not change adversely the

exporters functioning. The changes in foreign exchange reserves and economic data of

the country have been rated low with the low mean as these factors do not encroach into

the effective functioning of the exporters on specific grounds. However inflation as an

influencing factor, being a global factor has only affected moderately and with the

foreign currency and climatic fluctuations.

Kendall’s Coefficient has been applied to test the validity of factors influencing

the foreign market and the opinion of the respondents with the null hypothesis

“Exporters’ opinion on the influencing factors that cause the changes in the forex market

fluctuations considerably have differed from one another.”

W value (0.274, which has been less than ±1) has shown a low level of

concordance among the respondents, though the chi-square value has been highly

significant at 1% level, rejecting the hypothesis. Thereby the exporters’ opinion on the

influencing factors that cause the changes in forex market fluctuation has no similarity

with each other as opinion differs from person to person.

xxiv 

III. Reasons for Currency fluctuations and its impact

Foreign currency exchange rates are a very significant tool in maintaining the

exporter’s business promotions. Foreign currency fluctuations can easily turn into a nightmare

for exporters’ when not planned well. Currencies do not move uniformly against each other.

The reason for currency fluctuation and its impact on the exporters in general and Tirupur

knitwear exporters in particular, has been the main focus in this section. Discussion has

emphasized the impact of rupee appreciation and depreciation individually.

The table 4 has quoted the reasons for rupee appreciation and the exporters’

opinion on appreciation of rupee in the recent times.

Table: 4 Reason for Rupee Appreciation

Reason Total Score Mean Rank

High foreign exchange inflows 922 4.26 1

Positive growth rate of GDP 854 3.95 2

Favorable balance of payment 807 3.73 3

Foreign debt services (ECB) 714 3.30 4

Positive Bilateral trade relations 635 2.93 5

Interest rate difference 604 2.79 6

Results of Kendall’s Co-efficient of Concordance

W S Level of Significance Table value

0.097 79270 104.854 15.086**

Source: Primary Data

According to the respondent exporters in Tirupur the rupee appreciation has been

due to high foreign currency inflow in to the country with the highest mean 4.26. The

high foreign exchange inflow has resulted in positive growth of GDP and favorable

balance of payment position which have been ranked high (mean 3.95 and 3.73

respectively) Fourth rank, as a factor influencing rupee appreciation, has been suggested

as ECB (external commercial borrowing), where as, positive bilateral trade relations have

been ranked next at 2.93. The respondents have ranked last the interest rate of

differences; perhaps due to the fact that the initial increase in interest rates have not

substantial affectation on rupee appreciation.

xxv 

The consistency of opinion on factors influencing rupee appreciation has been tested

with Kendall’s Coefficient of concordance with the null hypothesis “the reasons ranked

for rupee appreciation by respondent exporters have no similarity”.

W value (0.097, which has been less than ±1) has shown a very low level of

concordance among the respondents though the chi-square value has given a significant

result at 1% level. Hence the hypothesis framed has been rejected, and the opinion of the

respondents has no similarity in reasoning the causes for rupee appreciation.

The effect of rupee appreciation on the day to day operations of respondent

exporters has been assured in Table No.5.

Table 5. Impact of Rupee Appreciation

Impact Total Score Mean

Ran

k

Changes in demand and supply 1415 6.55 1

Erosion in profit 1310 6.06 2

Decline in export growth 1101 5.10 3

Reduction in UVR (Unit Value Realization) 1010 4.68 4

High marketing cost 875 4.05 5

Increase in raw material cost 786 3.64 6

Reduction in working hours 678 3.14 7

Unemployment 601 2.78 8

Source: Primary Data

Changes in demand and supply have been the first reason attributed to rupee

appreciation with the highest mean of 6.55 (ranked first) and vice versa. Rupee

appreciation has also resulted in erosion of profits with a next high mean of 6.06

contributing to a decline in export growth of the respondents (5.10 mean). Reduction in

UVR as the fourth ranked factor (with the mean of 4.68) has been affected by rupee

appreciation, as stated by the respondents. High marketing cost and increase in Raw

material cost has also become the subject of changes due to rupee appreciation, which

have been ranked as 5th, 6th respectively. Adverse effects on rupee appreciation have

xxvi 

been traced to reduction in working hours and unemployment as opined by the

respondents.

Currency fluctuation is double edged phenomena. Rupee appreciation directs the

economy towards growth on one hand, and other has reflected in steep depreciation,

almost bordering the free fall of Indian Rupee vis-à-vis US Dollar. During the period of

January 2008 to March 15th 2009, India’s rupee weakened by 34% but currencies of other

countries like Bangladesh, Srilanka, China and Vietnam have remained almost the same

against the US dollar. The impact of rupee getting weaker against dollar had a big role

in raising the UVR of cotton garment export form India. UVR of cotton stood around

$3.2 US during Jan-Sep ’08, but it was 4.4 during Sep-Nov-08, while the rupee rose by

more than 17% during the same period. A weak Rupee has definitely helped the Indian

garment exporters, especially in the US market, where Indian garment prices have fallen

even below the currency of Bangladesh in May 2008.

Table:6 and 7have depicted the opinion of the exporters on Rupee

deprecation and its impact on their business operations.

Table: 6 Reason For Rupee Depreciation

Reason Total Score Mean Rank

Appreciation of US Dollar 757 3.50 1

Rise in crude oil prices 604 2.79 2

Slow down in capital inflows( FII) 425 1.96 3

Slow bilateral trade 374 1.73 4

Source: Primary Data

The exporters who have faced the current volatile situation in the exchange rate

market are very uncertain about the future rates recoveries. The exporters in Tirupur have

considered the primary reason to be the appreciation of American Dollar (mean 3.50).

Rise in crude oil prices, slowdown in FII inflows and slow bilateral trade relations have

also impacted rupee depreciation.

xxvii 

Table: 7 Impact of Rupee Depreciation

Impact Total Score Mean Rank

Increased competitiveness 522 2.42 1

Rise in volume of export 506 2.34 2

Realizing profit from exchange fluctuations 450 2.08 3

Rise in UVR (Unit Value Realization) 434 2.01 4

Source: primary data

Currency fluctuation in international market inevitably leads towards uncertainty

and risk which persuade them to adopt and practice risk management techniques. Table 8

has shown a few of the techniques adopted by the respondents for managing risks.

Table 8 Risk Management Techniques Adopted

Risk Management Techniques No.of Respondents Percent

Initiative from the government to educate and easening the norms 31 14.35

To go for Euro & other currency 58 26.85

Bank support(Hedging) 127 58.80

Total 216 100

Source: Primary Data The table indicates that 58.80 percent of the exporters have considered hedging to be

the best to manage and control the risk by signing of forward contracts to avoid currency

fluctuation. 26.85 percent of the exporters have opined that they should start trading in Euro

and other countries to avoid US Dollar fluctuations. The balance of respondent exporters

have sort government assistance through seminars, conferences to manage the risk.

The focus of trade policy reforms in India has been on liberalization, openness

and globalization with a basic thrust on outward oriented export promotion activity,

removal of quantitative restrictions, and improving competitiveness of Indian industry to

meet global market requirements. Getting a first hand information from the beneficiaries

on the satisfaction level delivered from the steps taken by government to overcome

currency fluctuations has been shown in Table no.9

xxviii 

Table 9. Exporters Level of Satisfaction Towards Measures Takenby Rbi/Govt

Measures Total Score Mean Rank

Decrease in Repo rate 498 2.31 1

Intervention in currency market 492 2.28 2

Decrease in cash Reserve ratio 504 2.33 3

Easening currency regulation 504 2.33 4

Liberalizing export credit norms 357 1.65 5

Source: Primary Data The exporters in Tirupur are primarily satisfied with the reduction in Repo rates

i.e., bankers agreement to purchase the Bills of Exchange at a lesser margin, with the

basic aim of mitigating exporter losses due to currency fluctuations. The government

intervention in currency market to correct the price volatility has been a welcome sign for

the respondents. The flexibility of money supply has been achieved by reducing the Cash

reserve ratio. Easening currency regulation has provided greater satisfaction than

liberalizing export credit norms.

Most of the exporters have confirmed that the government should consider the

garment industry under priority sector (mean 2.62). The exporters have also suggested

that government should fix the value of rupee against dollar permanently suggesting a

single currency for whole world at the international market place. Exporters have opined

that the exchange rate policy should be calibrated to reduce the volatility of the exchange

rate. The respondent exporters have also suggested that the dual exchange rate is the

need of the hour i.e., 40% export proceeds realized may be converted into fixed exchange

rate while the balance 60% may be converted at a floating exchange rate. The respondent

exporters will be satisfied if the government shows positive approach with respect to

fiscal policies, incentive schemes and labor laws.

Conclusion

With an expected dual exchange rate, stable exchange rate against dollar, full

refund of all taxes and levies by State/Central Government / Corporation to the industry

as well as interest free loans for modernization along with zero duty import of capital

goods, and the concessional rate of export credit, the industry can bloom with wings to

expand production and employment as well as its foreign earnings.

xxix 

IMPACT OF CORPORATE SOCIAL RESPONSIBILITY IN GARMENT

INDUSTRY

(with reference to Tirupur Knitwear Industry)

INTRODUCTION

Corporate social responsibility is a company's obligation to be responsible to all

of its stakeholders in all its operations and activities with the aim of achieving sustainable

development not only in the economical component but also in the social and

environmental dimensions. Company's stakeholders includes employees, customers,

suppliers, community organizations, subsidiaries and affiliates, joint venture partners,

local neighborhoods, investors, shareholders, and the environment are all those who are

influenced by and can influence a company's decisions and actions, both locally and

globally. Business promotion concerns on the role of business towards society, which has

been promoted by increased sensitivity to ethical issues. Such sensitive issues like

environmental pollution, improper treatment of workers, and defective production

leading to customers’ inconvenience or danger are the ethical issues to be considered by

business firms. Government regulations regarding environmental and social issues have

increased. Investors have begun to make investment decisions based on social

sustainability in addition to economics. Many buyers have become increasingly sensitive

to the social performance of the companies from which they buy their goods and services.

This obligation demands firms to operate in an economically, socially and

environmentally endurable way.

CORPORATE SOCIAL RESPONSIBILITY IN TIRUPUR GARMENT INDUSTRY

Tirupur the “Town of Export Excellence.” is the textile center of Western Tamil

Nadu, and is predominantly an export niche, the town gains its significance for its

updated technology and the quality of its macro economic environment. The industry is

booming for the past few decades in international market due to tremendous market

reform progress. Like the firms in other industries, garment industry is also realizing their

responsibility towards various stakeholders associated with them and the environment.

Generally, the situations of corporate social responsibility in garment industry are

improving. However, the ways by which different organizations choose to fulfill their

xxx 

social responsibility might be different. Identifying stakeholders, their relevant issues and

managing the relationships, developing CSR policies and guidelines, trainings/sensitizing

company’s staff, benchmarking a company’s social responsibility program, establishing

CSR management system, social audit, keep the company abreast of latest issues in

development and social responsibility through publication, seminar, workshop and the

website. The various activities of CSR include building of hospitals, charitable

dispensaries, educational institutions, construction of roads, reducing the poverty,

controlling of pollution, etc. By adopting these welfare measures, the firms may attempt

to bring about a social change.

Many non-governmental organizations in Tirupur are engaged in such social

development and environmental development activities. These organizations are good

enough to support the industrial development by ensuring community participation. ILO,

Steering group consists of seven major trade unions and five NGO, SAVE, VALAM are

the organizations initiatively participating. With the support of these organizations the

garment exporters were implementing the corporate social responsibility more efficiently.

STATEMENT OF THE PROBLEM

Successful global business has the power to make a real difference. Economic

performance and social responsibility can go hand in hand, when there is a genuine

consideration of our impact on the community and the environment in which we live and

work. True global companies must foster good relations with customers, communities

where they operate and bear the responsibility of the impact of their activities on

environment and society. At this juncture the study has been taken to know the

effectiveness of corporate social responsibility in the garment industry in Tirupur.

OBJECTIVES

To know the vital role of CSR in developing corporate reputation.

To know the mode of implementing CSR.

To study the level of satisfaction towards the benefits derived through CSR

strategies.

To study the impact of CSR

xxxi 

RESEARCH METHODOLOGY

The study being descriptive in nature and is expected to draw conclusion about

the reactions of the export community with respect to impact of Corporate social

responsibility in garment industry. 100 garment exporters have been selected as sample

respondents using convenient random sampling technique. A well structured close ended

interview schedule with queries related to mode of implementation of CSR, importance

of CSR and impact of CSR has been framed to collect the primary data from the

respondent’s group. Kendall’s coefficient of concordance, ANOVA and Chi square test

was used to test the exporters’ opinion.

RESULTS AND DISCUSSIONS

The community today needs external agency intervention in the alleviation of

many social problems like poverty, ill-health, unemployment, community education,

providing shelter and eco development programs. The Non Governmental Organizations

existing within the industrial location and closer to the community can better act as

moderators and facilitators in the realization of their social need and better environmental

protection. Table1 depicts the mode of implementation of CSR by both manufacturing

exporters and in-house exporters in the garment industry.

Table – 1 Mode of Implementation of Csr

MODE Manufacturing exporters

In house exporters TOTAL

Joined with NGO & government 9 10.23% 4 33.33% 13 13%

Maintaining separate team 16 18.18% 5 41.67% 21 21%

Joined with non-profit organization 63 71.59% 3 25% 66 66%

From the study, among 100 garment exporting units, 10.23% of the

manufacturing exporters and 33.33% of the In House exporters have joined with NGO &

government to implement CSR, 18.18% of the manufacturing exporters and 41.67% of

the In House exporters were maintaining separate teams to implement the CSR and

71.59% of the manufacturing exporters and 25% of the In House exporters were joining

with non-profit organizations to implement the CSR.

xxxii 

CSR is very important to thoroughly understand the perception of the company.

Companies with high CSR standards are able to clearly demonstrate responsibility to

investors, shareholders, employees, customers and the general public. Therefore they

manage risk and enhance their corporate reputation. Table.2 explains the importance of

CSR in developing corporate reputation. The total score has been calculated from the

highest rank points given to assigned ranks from total respondents, multiplied by its

respective position of factor taken for consideration; mean value is obtained by total

score divided by number of respondents.

Table –2 Importance Of Csr In Developing Corporate Reputation

S.NO FACTORS TOTAL SCORE MEAN RANK

1. Increased Buyers interest 501 5.01 1

2. Social awareness 496 4.96 2

3. Growing investors’ pressure 476 4.76 3

4. Demand for greater disclosure 470 4.70 4

5. Globalisation & Market forces 455 4.55 5

6. Supplier relationship 433 4.33 6

7. Shrinking role of government 420 4.20 7

8. Competitive labour market 349 3.49 8

Among 100 garment exporting units, most of the respondents have ranked the

increased buyer interest (5.01) as first; social awareness (4.96) as second, growing

investor’s pressure (4.76) as third, fourth rank to the demand for greater disclosure (4.70),

fifth rank for the globalization & market forces (4.55), sixth rank for the supplier relation

(4.33), seventh rank for the shrinking role of government (4.20) and eighth rank for the

competitive labor market (3.49). Kendall's Coefficient of Concordance has been used to

find whether the ranks assigned by the exporters have any similarities. The Kendall’s (W)

vary between 0 and 1. Higher the value of (w) higher the similarity among the

respondents in assigning ranks. The Kendall’s (W) has been found to be 0.041, which has

indicated that there has been very low similarities among the exporters in assigning ranks

for the importance of CSR in developing corporate reputation.

xxxiii 

Corporate Social Responsibility is the “continuing commitment by business to

behave ethically and contribute to economic development while improving the quality of

life of the workforce and their families as well as of the local community and society at

large”. Companies with rigorous corporate responsibility standards are also best

positioned to attract and retain high quality staff, thereby reducing employee turnover

rates and recruitment costs. Exporters of Tirupur realized the same as they implemented

the CSR strategies. Table 3 depicts the benefits derived through CSR strategies.

Table 3. Level of Satisfaction Towards The Benefits Derived Through CSR Strategies to Employees

S. No Benefits HS S N DS HDS Total

1 Increase workers productivity 26 32 18 16 8 352

2 Delivery of positive social, healthy outcomes 39 23 8 15 15 356

3 Increases loyalty 16 20 24 22 18 294

4 Increases retention 12 14 38 26 10 292

5 Improved recruitment 9 27 20 19 25 276

As per the Likert’s summated scale, from the total points obtained, it is observed

that most of the exporters were highly satisfied at the delivery of positive social &

community healthy outcomes, increase in workers productivity but where less satisfied in

the increase in loyalty, increased retention and improved recruitment. To ascertain if

there has been any difference in opinion among the exporter towards the benefits derived

through CSR strategies, a null hypothesis has been framed to apply ANOVA for within

group’s and between group’s.

Hypothesis: There has been no significant difference in opinion among the exporters

towards the benefits derived through CSR strategies.

Sum of squares df Mean

square F Table value

Between groups 180.8 4 45.2 0.5935

2.87 Within groups 1523 20 76.15

Total 1704 24

xxxiv 

ANOVA have shown that there has been no significant difference at 5% level on

the opinion among the exporters towards the benefits derived through CSR strategies.

Exporters were in an urge to implement CSR towards environment which will

endure corporate reputation in the society. Table.4 depicts the level of satisfaction

towards implementation of CSR towards environment.

Table – 4 Level of Satisfaction Towards Implementation of CSR Towards Environment

S.No IMPLEMENTATION HS S N DS HDS TOTAL

1 Green procurement 26 45 9 12 8 369

2 Use of renewable raw material 32 16 24 10 18 334

4 Environmental management through certification

12 9 43 16 20 277

5 Better product durability and functionality

22 12 18 34 14 294

6 Integration of management tools with business plan

18 11 13 19 19 290

From the total points obtained, most of the respondents were more satisfied in

green procurement and use of renewable raw material, whereas are comparatively less

satisfied with the implementation of environmental management through certification,

better product durability & functionality and integration of environment management tools

with business plan. To ascertain that there is no significant difference in opinion among the

exporters towards the implementation of CSR in developing environment, a null hypothesis has

been framed to apply ANOVA for within groups’ and between groups.

Table-5 Impact of Corporate Social Responsibility

Benefits Before

implementing CSR After implementing

CSR

Same as before Has Increased

Productivity & Profitability 1 14 15

Reputation gained from buyers 4 22 26

Contribution towards society and environment

5 34 39

Recognition earned from employees, society and Government

3 17 20

xxxv 

Implementation of corporate social responsibility is not effective in promoting the

business. Calculated value of chi square (19.7532) is much more than table value 9.488

and hence the result of experiment does not support the hypothesis. We can thus conclude

that the implementation of corporate social responsibility is important for promoting

corporate reputation. As an impact on promotion of corporate social responsibility; 13

respondents have found no difference in performance of business and environment before

and after implementing CSR, whereas the remaining respondents have found that CSR

has brought much of changes in their business and environment viz., contribution towards

society and environment, reputation gained from buyers, recognition earned from

employees, society and government and increase in productivity and profitability.

SUGGESTIONS

Every exporter has to maintain separate team to implement the CSR, can provide

more incentives and amenities to retain their employees, concentration in providing zero

discharge-pollution free environments. A well developed focus to be made for its

corporate responsibility on improving conditions in contracted factories, aiming for

carbon neutrality, and making sports available to young people across the world,

providing costly equipments to government hospitals, helping orphanages.

CONCLUSION

Both public & private CSR efforts must be extended to solve the identified

problems. Indian government may also look forward like Saudi Arabia compels the firms

to pay some portion of the profit to government to spend that amount where the money

needed within the country. Innovative strategies & methodologies will create win-win

situation for all, consultative & collaborative model of change works, which is really

profitable for all.

xxxvi 

A Study on Strategies for Promoting Technical Textiles-Lateral Diversification:

With Special Reference to Tirupur Knit Wear Exporters Dr. Rameshwari Ramachandra P.Suguna N.Krishnaveni

INTRODUCTION

The technical textiles are one of the fastest growing segments of the textile and

apparel industry worldwide. The very distinctive feature of technical textiles is that it can

make value addition as high as 500 percent depending upon the application and end uses.

At the same time, it is a diverse and dynamic one, having wide range of materials,

processes, products and application.

With the growing demand of functional textiles and due to closing down of

conventional textiles owing to high cost of raw materials, market fluctuations, to meet the

global competition, to reach newer horizons of market, for new entrepreneurs who are

enthusiastic to enter into innovative vicinity, use of textiles in various fields like medical,

technical, agricultural and protective clothing etc., promotion of ecofriendly textile

products, product diversification that focuses to widen the scope of technical textile

market and rather than importing such functional textile material, a diversification of the

textile industry by manufacturing these products in our country with available skilled

labour and resources, are the reasons for selection of the opportunities open for technical

textiles.

A Technical textile is a textile product manufactured for non-aesthetic purposes,

where function is the primary criterion. It is a huge and growing sector and supports a

vast array of other industries. Technical textiles include textiles for automotive

applications, medical textiles (e.g., implants), geotextiles (reinforcement of

embankments), agrotextiles (textiles for crop protection), and protective clothing

(e.g., heat and radiation protection for fire fighter clothing, molten metal protection for

welders, stab protection and bulletproof vests, and spacesuits).

Technical Textiles offers new ways, means and opportunities to the Indian textile

industry to sustain the present growth and thrive in near future. It would offer not only an

opportunity to augment growth, but also a new direction for advancement of the industry.

The field of technical textiles had not received adequate importance in Indian context so

xxxvii 

far; however, it is a potential area where the textile industry can excel. Traditional textiles

today are unable to cope with cost of production for various reasons like fast

technological obsolescence, high cost of modernization, increasing cost of power etc.

Present product mix of traditional textiles is not remunerative enough and therefore more

and more ideas of value-addition to textile products are gaining momentum. Technical

textiles, in this context, are just perfect.

India has enough of bleached cotton, polypropylene and polyester viscose yarn

and resources. But high-tenacity polyester, specialty flame retardant, and ballistic

protective materials like Kevlar, Nomex, and broad spectrum antimicrobials incorporated

textile products are to be imported. They are mainly required for defence and medical

applications. The government should consider their zero-duty import. Vigorous push

needs to be given to the use of locally available coir and jute in a big way to produce

environment-friendly products.

STATEMENT OF THE PROBLEM

At present, India is importing $5 billion worth of technical textile products such

as composite leather, sanitary napkins and diapers to meet the domestic demand, which

has been growing at 8 per cent a year. This has led to the development of Rs.150-crore

zone—that is planned to be established on 200 acres during the 11th Plan under the cluster

development programme of the Textiles Committee. This will be a boon for the small and

medium enterprises in the region to switch from conventional textiles to value-added

technical textiles. Small and medium enterprises in the Tirupur region are set to flourish

as technical textiles manufacturing zone that will come up near Tirupur sooner.

At this juncture this study aims at drawing an introspective view of the existing

conventional textile exporters of Tiruppur; on the reasons for choosing the technical

textile sector, opportunities, contribution of government and the strategies to be adopted

for sustainable development.

REVIEW OF LITERATURE

Nonwovens are most widely used in diverse applications of technical textiles due

to their unique characteristics, performance and cost advantage. Behnam Pourdeyhimi

xxxviii 

(2009) presented in his lecture that nonwovens are not only replacing traditional textiles,

but are also creating new markets for new value added products.

The application of hot-melt products for the production of functional technical

textiles are necessary for developing of new solutions and systems for the required fields

such as for the automotive industry, for interlinings, medical textiles, and other clothing

applications and to meet the high demand on technical textiles for the protection of

human, environment, and machinery, as well for special textiles for functional

applications such as roofing systems, geotextiles, building textiles, and textiles for

airplanes. Owing to recent advancements in medical procedures and textile engineering;

single use materials used in the operating theatre have found a greater use. To meet the

fashion requirements and comfort rather than covering body, latest technology and

sophisticated machines are inevitable to enter into new areas like medical, protective,

filtration, transmission, transportation, structural and many non conventional

applications. To avoid the risk contamination by pesticides, protective clothing is useful

to give some degree of protection for agricultural workers who are at a risk contamination

by pesticides, insecticides and herbicides. The design, manufacture and applications of

textile composites in space and aerospace have become one of the most predominant

aspects in present day textiles. (Abreu et al., 2003; Andrea Glawe et al., 2003;

Anita Desai 2005; Kumar et al., 2005; Ragavendra Pavan et al., 2009)

The Government of India has come up with several positive schemes to support

the growth of the non woven and technical textile industry. Center for Excellence in

Technical Textiles is likely to be set up in Surat very soon or which details are been

worked out by the Government of Gujarat in collaboration with South Gujarat Chamber

of Commerce and Industries. These units will manufacture medical textiles, geo textiles,

parachute textiles, laminated fabrics; application in agriculture etc., similarly in an earlier

scenario, the Pakistan government has removed the 5% customs duty on import of textile

machinery in the annual budget of 2005-06, to overcome the troublesome situation of

home textiles. The State Economic and Trade Commission of China have recently

approved 115 textile technical renovation projects in three groups, estimated to cost 14.71

billion Yuan (US$1.8 billion), with 9.76 billion Yuan of bank loans (Asia pulse news

2000; Seshadri Ramkumar and Appachi Arunachalam, 2009; Chandan Chatterjee 2010).

xxxix 

The second international exhibition of machine tools and automation industry was

conducted at Karachi Expo Centre in September 2006. The event had attracted more than

60 local and foreign companies, which encouraged foreign investors to invest

in technical textile sector and other machine tools. Pakistani exporters were provided to

avail the facility of testing their products in 19 internationally accredited labs

within Pakistan. These labs have successfully participated in 35 international proficiency

testing schemes for the quality of technical textile raw materials and products (Pakisthan

Press International 2006; Zawdu Felleke, Trade Related Technical Assistance Programme

of United Nations Industrial Development organization, 2008).

Changing pattern of Chinese textile market was identified with a growing focus

on technical innovations and the significant relocation of manufacturing and service

centres to Asia. To meet the growing International competiton, US companies followed the

strategies to relocate some operations offshore (Owen and Phil, 2005; Ting Chi, et al., 2005).

OBJECTIVES OF THE STUDY

The study is expected to draw conclusion about the opinion of the exporters to

enter into technical textiles to meet the domestic as well as international needs.

• To study the features that influences the lateral diversification

• To analyze the exporters’ choice of preference towards the technical textiles sector

• To know the exporters’ opinion towards the schemes of the government

• To study the strategies to be focused to promote the technical textiles

METHODOLOGY

Manufacturing Exporters of garment industry were chosen for the study.

Sampling unit may be a geographical one such as state, district, village etc., so in this

research sampling unit is Tirupur Garment units. The study being descriptive nature, 33

small and medium exporters of total population have been selected as sample respondents

by using convenient sampling technique. Interview schedule has been used as instrument

to conduct this research. A well structured close ended interview schedule with queries

relating to: reasons to choose technical textile sector, application oriented areas of

technical textiles, an outlook about the government schemes, strategies to be focused for long

term development, has been framed to obtain primary data from the respondent’s group.

xl 

The secondary data for the review were sourced from news bulletin of various textile and

research agencies, both official and unofficial newspapers. The study period extended for

about twelve months from October 2009 to October 2010. In order to analyze the

objectives of the study, several statistical methods and tests were used. Percentage

analysis, Chi square test, ANOVA, Kendall’s coefficient of concordance was used to test

the relationship among the variables taken for study.

ANALYSIS

This section presents the analysis of the data that was collected from the

respondents. The profile of the 33 surveyed respondents is depicted in this section of the

research work.

Table 1 Profile of the Tirupur Knitwear Industry

Particulars Respondents Percentage

Experience

Less than 5 Years 15 46%

5-10 years 11 33%

Above 10 years 7 21%

Sources of finance

Own capital 3 9%

Borrowed capital 8 24%

Own and borrowed capital 22 67%

Turn over

Less than 10 crore 16 48%

10 to 20crore 8 24%

Above 20 crore 9 28%

Application areas

Agro Tech 5 15%

Medi Tech 18 55%

Home Tech 10 30%

There are more number of new entrants into the business (46%) with less than 5

years experience, as compared to those with 5-10 years experience (33%). However,

considering the risk involved in the export business, respondents with more than 10 years

of experience have constituted only to about 21%. 9% of the exporters invested their own

money in the business. 24% of them have taken up the risk of borrowing money from

external sources to run the business whereas 67% of the respondents have sourced their

own and borrowed capital. 46% of the exporters contacted, have an annual turnover of

xli 

less than Rs.10 crores, while those exceeding Rs.10 crores turnover target have been

11%. A very small proportion of 7 % have more than 20 crores annual turnover.

15% of the respondent exporters had chosen Agro tech which includes technical

textiles used in agriculture, horticulture (include floriculture), fisheries and forestry. 55%

of them invested their capital in the Meditech which covers technical textiles used in

hygiene and medical facilities. Home tech is manufactured by 30% of the exporters

which includes technical textiles used in household activities like furniture components,

mattress components, upholstery and interior furnishing, stuffed toys, etc.

Reasons for preference of technical textiles: India is an emerging economy and their

textile markets are bound to grow on globalization hence technical textiles can be

indigenized. Downstream processes generate relatively more employment and are

influenced by labour cost. The labour cost in India is competitive compared to developed

countries. Indigenization of technical textiles will not only minimize import and achieve

strategic self sufficiency in sensitive and emerging areas of applications like defense,

aerospace, sustainable development, waste management etc. but also provide new

avenues of value added exports. Growth in Asia is expected to be more than 6.5%, with

the projected growth rate being merely 2.2% in the developed countries Promoting

technical textiles as a tool of value addition for survival and revival of Indian textile

industry hold a high potential of success. The table 2 has quoted the reasons for the

preference of technical textiles and the exporters’ opinion about the basis for choosing

the technical textiles rather than conventional in the recent times.

Table 2 Reasons for preference of Technical Textiles

Reasons Total scores Mean Rank

Passion towards new business venture 208 6.30 1

High rate of consumption 183 5.55 2

Suited for small and medium size industries 167 5.06 3

Changing nature of conventional textile industry 155 4.70 4

Rising price of cotton 140 4.24 5

Availability of cheap and skilled labours 122 3.70 6

Opportunity to cater both domestic and export market 118 3.58 7

Create additional employment opportunity 95 2.88 8

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Among the eight variables chosen most of the exporters have selected technical

textile sector driven due to a passion towards entering new business venture (mean value

6.30). High rate of consumption has scored the next maximum mean (5.55). As the

industry is best suited for small and medium sized industries it scored a mean value of

5.06. Changing nature of conventional textile industry has scored the next highest mean

of 4.70. Rising price of cotton and availability of cheap and skilled labour has scored the

next mean of 4.24 and 3.70 respectively. Opportunity to cater both domestic and export

market is considered as the next important factor (mean value 3.58). The next highest

mean value has been 2.88 for creation of additional employment opportunity.

Kendall’s Coefficient has been applied to test the validity of factors influencing

the technical textiles and analyse the opinion of the respondents with the null hypothesis

as “Exporters’ opinion on the influencing factors that leads to choice of technical textiles

considerably have differed from one another”.

W value 0.0711 (which has been less than ±1) has shown a low level of

concordance among the respondents, though the chi-square value has been highly

significant at 1% level, rejecting the hypothesis. Thereby the exporters’ opinion on the

influencing factors that leads to choice of technical textiles has very low similarity with

each other in assigning the ranks.

Contribution of government in promoting technical textiles: Government of India

during its 11th five year plan i.e., April 2007-March 2012, has initiated positive schemes

to support the growth of technical textile industry. National Mission for technical textiles

was launched by Prime Minister Dr. Manmohan in the texsummit conference on

September 2007 in New Delhi. The main aim of the mission is to expand the current

technical textile industry to a size of around 12-15 billion dollars by 2012. The mission

will be divided into 4 mini-missions which will focus on creating awareness, human

resource development, capacity building of the non-woven and technical textile industry

and related machinery industry, establishing centers for research excellence and support

with testing and standardization. Exporters’ opinion on the schemes of the government is

showed in the table 3.

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Table 3. Opinion about the schemes

Schemes Excellent Good Fair Total points

TUF- 10 % subsidy for new machinery - 5% interest subsidy 19 10 4 81

Drop down of custom duty on imported technical textile machinery - from 10 % to 5%

22 8 3 85

R and D infrastructure -20 centers of excellence in research on non-woven and technical textiles in next five years

12 14 7 71

Setting up of Technology information and forecasting assessment council (Kumaraguru College of Technology- Coimbatore for South India)

10 15 6 66

To ascertain if there has been any difference in opinion among the exporters’

towards the awareness about the schemes of government of India, a null hypothesis has

been framed to apply ANOVA for within group’s and between group’s as; there has been

no significant difference in opinion among the exporters towards the awareness about the

schemes of the government towards the growth of technical textiles.

ANOVA TEST

Sum of squares df Mean square F Table value

Between groups 236.17 2 118.08 7.08

4.26 With in groups 150.06 9 16.67

Total 386.23 11

ANOVA table shows that there has been significant difference in the opinion

among the exporters towards various schemes taken for study that are proposed by the

government at 5% level.

Strategies for promotion of Technical Textiles in Tirupur: Although various quarters

of textile industry have started identifying the concept and composition of technical

textile and related products, still there are prevalent apprehensions to venture into this

field. Strategies are required to be put in place as early as possible. This has been shown

in the table 4.

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Table 4 Strategies for promotion of Technical Textiles

Strategies Need Immediate focus

Need to be Focused

Total score Mean

Improving manufacturing facilities 22 11 55 1.67

Market Development 21 12 54 1.63

R and D and Centre of Excellence 20 13 53 1.60

Identifying the application areas 19 14 52 1.58

Focus on backward integration 18 15 51 1.55

SEZ to be extended 17 16 50 1.51

Literature, Standards and Information technology 17 16 50 1.51

Textile manufacturers venturing into the area of technical textiles need to focus on

the level of their in-house technologies, know-how and competence and make concerted

efforts to modify them to the requisite level. If it is inescapable to import technology in

high-tech areas of technical textiles, it is essential that efforts should be aimed at

acquiring the state-of-the-art technology as far as possible and to be prepared to invest,

assimilate, innovate and improve the technology. Hence improvements in manufacturing

facilities have scored the maximum opinion with a mean score of 1.67. Success of a new

technical textile product will essentially depend on the user of the product. It will be

necessary to have close interaction between textile technologists and technical personnel

users, viz., engineers, doctors, etc. who will use such technical textiles. Product

development and production of technical textiles will succeed only if simultaneous

market development is also carried out to sustain demand (mean score 1.63). Research

and development, consultancy, quality management, testing and evaluation hold the key

to the success of capturing a substantial share of the competitive global market of

technical textiles. According to exporters’ substantial investment in R and D will be

unavoidable. Strong world class testing facilities for accurate and relevant evaluation of

technical textile must be made available in India to satisfy the stringent and critical

requirements of performance related product parameters in the global market. Thus R and

D and developing a Centre of Excellence has scored a next highest mean (1.60).

�Identifying the products with different application areas with a strong potential in the

domestic market, and which will in the long run, help exports have gained a mean score

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of 1.58. Initially such items should be selected for which there exists know-how,

production facilities, raw material etc. Such products may be on the lower end of

technology but should have a big impact in terms of volume, value addition, etc. The

existing production capacity / capability with incremental addition to the facilities may be

focused. It will create a favorable psychological impact and climate for future investment

in more demanding products. Focus on backward integration scores as the next important

factor with a mean value of 1.55 as to reduce the supplier power and to minimize the

cost. Exporters opined that SEZ benefits are to be extended to more number of areas to

enjoy the tax exemption benefits and concessions which has a mean score of 1.51. Many

of the specifications like directives, literature, books, etc. are very costly and most of the

manufacturers will not be able to afford them. Also IT facilities to be created centrally for

dissemination to the concerned users is the strategy to be focused (mean score 1.51).

To establish the authenticity of the relationship between the Experience and

Strategies to be followed, a chi square test was applied with the null hypothesis, that there

has been no significant relationship between the Strategies and Experience of exporting

companies. To find the relationship Table 5 was prepared.

Table 5 Strategies for promotion of Technical Textiles

Experience / Strategies Less than 5 years

10-20 years

Above 20 years

Improving manufacturing facilities 2 2 1 5

Market Development 3 2 1 6

RandD and centre of excellence 3 3 1 7

Identifying the application areas 3 1 1 5

Focus on backward integration 2 1 1 4

SEZ to be extended 1 1 1 3

Literature, Standards and Information technology

1 1 1 3

15 11 7 33

xlvi 

The calculated value of Chi-square has been (0.4277) which has been less than the

table value (21.026) and hence there has been no significant relationship between the

Strategies to be adopted and Experience of the exporters. It depends upon the exporters’

objective, willingness to enter into novel field, technical know-how, investment capacity,

market development, and government support, not merely on the experience of exporters.

DISCUSSION

The rationale of this research was to highlight the scope and strategies for the

promotion of technical textiles in Indian Scenario. Respondents’ opinion for choice of

technical textiles and their perception towards government schemes were analyzed. The

findings are as follows; Kendall’s Coefficient has been applied to test the validity of

factors influencing the technical textiles and the opinion of the respondents analyzed, the

exporters’ opinion on the influencing factors that leads to choice of technical textiles has

very low similarity with each other in assigning the ranks.

The profile of respondent exporters reveals that 67% of the respondents have

sourced their own and borrowed capital, from commercial banks to enter into the

technical textiles. The State Economic and Trade Commission of China has recently

approved 115 textile technical renovation projects in three groups, estimated to cost 14.71

billion Yuan (US$1.8 billion), with 9.76 billion Yuan of bank loans (Asia pulse

news,2000). Such capital sources and loans from banks encourage more exporters to

enter in to technical textiles. 15%, 55%, 30% of respondents have chosen Agro tech,

Meditech, Home tech as their choice of the filed in technical textiles respectively.

Various applications of technical textiles in different fields as functional textiles,

meditech, protective clothing, Geotech etc., have been revealed in other countries also.

(Abreu et al., 2003; Andrea Glawe et al., 2003; Anita Desai 2005; Kumar et al., 2005;

Ragavendra Pavan et al., 2009).

Reasons for the preference of technical textiles and the exporters’ opinion on their

inclination for choosing the technical textiles rather than conventional textiles were

studied. Among the eight variables chosen most of the exporters have selected technical

textile sector driven due to a passion towards entering new business venture as the reason

for their preference towards technical textiles. Similarly other reasons were ranked.

xlvii 

Changing pattern of Chinese textile market was identified with a growing focus

on technical innovations and the significant relocation of manufacturing and service

centres to Asia. To meet the growing International competiton, US companies followed

the strategies to relocate some operations offshore (Owen and Phil, 2005;

Ting Chi, et al., 2005). Preference of choice for the diversification into technical textiles

varies among the exporters.

It was observed from the ANOVA table that there has been significant difference

in the opinion among the exporters towards various schemes taken for study that are

proposed by the government at 5% level. The Government of India has come up with

several positive schemes to support the growth of the non woven and technical textile

industry. TUF subsidy, drop down of custom duty to 5% by the government have

encouraged exporters. Similarly the Pakistan government has also removed the 5%

customs duty on import of textile machinery of home textiles. The State Economic and

Trade Commission of China have recently approved 115 textile technical renovation

projects through bank loans. The study shows that 20 centers of excellence in research on

non-woven and technical textiles are planned, and a technology information and

forecasting assessment council has been formulated. A technical textiles Expo organized

by Pakisthan government at Karachi encouraged FDI and 19 internationally accredited

labs were set up to test the quality of technical textile products.

In the present study a Chi-square analysis has shown that there is no significant

relationship between the Strategies to be adopted for promotion of technical textiles and

experience of the exporters. It depends upon the exporters’ objective, willingness to enter

into novel field, technical know-how, investment capacity, market development, and

government support, not merely on the experience of exporters.

CONCLUSION

Government may provide subsidy and extended support facilities, to encourage

the technical textile manufacturers for increasing their export potential for various

products and expanding the domestic markets. Awareness programmes are to be

conducted for more number of exporters to enter into this field. R and D facilities for

indigenous development of raw materials and diversification of products, Centre of

xlviii 

Excellence for standard testing facilities are to be set up. End users may be educated

about the functional properties which will enhance their life style. Empowerment of

human resources is possible by creating skill-oriented employment opportunities. Lateral

diversification opens up wider market potential in the global scale. To fulfill the social

objectives of providing cheaper and efficient products like shelters, protective clothing

etc. to the masses in the event of disasters like flood, draught, earthquake and the like,

transparent and effective policy matters are to be formulated by the government to

encourage the exporters who ventured into technical textiles and recognize such ventures

as knowledge based industry. Thus a scheme of planning should be made to ensure the

inputs and to offer a congenial environment, both regulatory and fiscal, to achieve greater

share in the global technical textile market in future.