Textileindustrypptstrategicmanagement 120528131152-phpapp02

Textile industry

♫ India’s textile industry is one of the economy’s largest.♫ The industry scenario started changing after the economic

liberalization of Indian economy in 1991.♫ It has now become the largest industries in the

world.♫ Indian textile industry contributes about 14 % to industrial production.♫ 4% to country’s gross domestic product.♫ 17% to country’s export earnings♫ Provides direct employment to over 35 million people ♫ India earns about 27% of its total foreign exchange through textile

exports.♫ The textile industry of India also contributes nearly 14% of the total

industrial production of the country. ♫ It also contributes around 3% to the GDP of the country♫ It is the largest provider of employment after agriculture.

History English inventors in the 18th century began to automate textile cottage industry processes

including carding, spinning and weaving.

James Hargreaves developed the Spinning Jenny, a device which replaced eight hand spinners in one operation. Richard Arkwright assembled these processes and started the first factory on the Derwent River in Cromford, England in 1771.

In 1792, Samuel slater opened a yarn spinning mill in Pawtucket, Rhode Island, the first successful automated yarn spinning in the US.

In the early 1800s, cotton was raised in the southern United States and exported to mills in England and the north.  .

In 1814, James Cabot Lowell of Boston built a factory in Waltham, up the Charles River from Boston.  

Later, the Boston Associates built an entire mill town on the Merrimack River, and later named it  "Lowell" in memory of James Cabot Lowell.

In the 1990s, a new world order began to replace.  Buying from the lowest cost  producer drove many textile manufacturers out of the production side and into imports.  Manufacturing companies changed to marketing companies

STRUCTURE OF TEXTILE INDUSTRY

Indian textile industry can be divided into several segments, some of which can be listed as below:

Cotton Textiles

Silk Textiles

Woollen Textiles

Readymade Garments

Hand-crafted Textiles

Jute and Coir

Facts of Indian Textile Industry

India is the second largest producer of cotton yarn.

4% contribution to GDP\

2nd largest producer of cotton

14% contribution to industrial production

17% contribution to export earning

Direct employment to more than 35 million people

India is the largest in loom age Concluding handloom in the world and

contributes about 61 percent to the world loom age.

Strong and Diverse raw material base

Second largest exporter of yarn

. Globally competitive spinning industries.

Strong presence in entire textile value chain.

SWOT ANALYSISSTRENGTH

♫ India has rich resources of raw materials of textile industry. It is one of the largest producers of cotton in

the world and is also rich in resources of fibres like polyester, silk, viscose etc. 

♫ India is rich in highly trained manpower. The country has a huge advantage due to lower wage rates.

Because of low labour rates the manufacturing cost in textile automatically comes down to very

reasonable rates. 

♫ India is highly competitive in spinning sector and has presence in almost all processes of the value chain. 

♫ Indian garment industry is very diverse in size, manufacturing facility, type of apparel produced, quantity

and quality of output, cost, and requirement for fabric etc. It comprises suppliers of ready-made garments

for both, domestic or exports markets. 

Weakness  ♫ Knitted garments manufacturing has remained as an extremely fragmented industry.

Global players would prefer to source their entire requirement from two or three vendors

and the Indian garment units find it difficult to meet the capacity requirements.

♫ Industry still plagued with some historical regulations such as knitted garments still

remaining as a SSI domain.

♫ Labour force giving low productivity as compared to other competing countries.

♫ Technology obsolescence despite measures such as TUFS.

♫ Low bargaining power in a customer-ruled market.

♫ India seriously lacks in trade pact memberships, which leads to restricted access to the

other major markets. 

♫ Indian labour laws are relatively unfavourable to the trades and there is an urgent need

for labour reforms in India. 

Opportunity

♫ Low per-capita domestic consumption of textile indicating significant

potential growth.

♫ Domestic market extremely sensitive to fashion fads and this has

resulted in the development of a responsive garment industry.

♫ India's global share is just 3% while China controls about 15%. In

post-2005, China is expected to capture 43% of global textile trade.

♫ Companies need to concentrate on new product developments.

♫ Increased use of CAD to develop designing capabilities and for

developing greater options.

Threats 

♫ Competition in post-2005 is not just in exports, but is also likely within the

country due to cheaper imports of goods of higher quality at lower costs.

♫ Standards such as SA-8000 or WARP have resulted in increased pressure on

companies for improvement of their working practices.

♫ Alternative competitive advantages would continue to be a barrier

FACTORS AFFECTING TEXTILE INDUSTRY

Textile Industry

Rivalry

Demand Conditions

Cost & Location

Government Regulation

Policy

India’s Position in World Textile Economy

Recent developments

Bangladesh is planning to set up two special economic zones (SEZ) for attracting Indian companies in view of the duty free trade between the two countries.

Italian luxury major Canali has entered into a 51:49 joint venture with genesis luxury fashion, which currently has distribution rights of Canali branded products in India . The company will now sell Canali branded products in India exclusively

Performance of the Textile Industry

The industry which was growing at 3-4 percent during the last six decades has now accelerated to the annual growth rate of 9-10 percent but various factors have effecting annual growth rate of textile Industry, Global recession is one of them.

The impact of the global and domestic economic slow down directly affect

the performance of the industry.

Index of industrial production (IIP) data has been released by the central statistical organization (CSO) shows a dismal picture of textile production .

PERCENTAGE GROWTH IN TEXTILES

Export scenario Developed countries' exports declined from 52.2% share in 1990 to 37.8 % in

2002.

And that of developing countries increased from 47.8% to 62.2 % in the same period.

In 2003 the exports figures in percentage of the world trade in Textiles Group (for select countries) were:

INDIAN TEXTILE EXPORTS 2010

45%

25%

18%

4%

18%

2%2%

ready garmentcotton textileMan-made tex-tileshandi craftssilk & hand-loomWool & Woolen tex-tilesothers

India’s textile exports (in US$ billion)

FY 06 FY 07 FY 08 FY 09 FY 10 FY 110

5

10

15

20

25

30

17.6 19.122.1 21.2 22.4

26.8

Textile export statistics

Financial year Textile exports US$ Millions

Total exports US$ Millions

Percentage of textile exports

2004-2005 14026.72 83538.95 16.79%

2005-2006 17520.07 103090.53 16.99%

2006-2007 19146.04 126262.68 15.16%

2007-2008 19558.53 143567.86 13.62%

2008-2009 18519.96 153018.22 12.10%

2009-2010 22418.00 178751.43 12.54%

MAJOR PLAYERS IN TEXTILE INDUSTRY

Company Business area

Welspun India LTD Home tesxtile,bathrobes, terry towels

Vardhman group Yarn,fabric,sewing threads, acrylic fibre

Raymond Ltd. Tailored clothing,denim,shirting, woollen outerwear

Bombay dyeing & manufacturing ltd.compqny

Bed linen, towels, shirts, dresses, and saris in cotton and polyster blend

ITC lifestyle Lifestyle market

Reliance industries Ltd.

Fabric, formal men's wear

Problems Of Textile Industry in India

Highest incidence of sickness The plant and machinery and technology by a number of units are absolute. Government regulations like the obligation to produce controlled cloth are against

the interest of the industry. The cotton yield per hectare of land is very low in India. Competition from the man made fabrics and synthetics. India has been facing severe competition from other countries like Taiwan, South

Koria, China and Japan. The cotton textile industry is frequently plagued by labour problems. The industry faces number of other problems like power cuts, infrastructural problems, lack of finance, exorbitant rise in raw material prices and production costs etc.

Government initiates and regulatory framework

The government has offered health insurance coverage to 161.10 million weavers and ancillary workers under handloom weavers comprehensive scheme.

The CENTRAL COTTAGE INDUSTRIES CORPORATION OF INDIA and THE HANDICRAFTS AND HANDLOOMS EXPORT CORPORATION OF INDIA have developed a number of e- marketing platforms to simplify marketing issues.

As per the 12th year five year plan, the integrated skill development scheme aims to train over 2675,000 people within next 5 years.

As per the credit guarantee program, over 25000 artisans credit cards have been supplied to artisans and 16.50 million additional applications for issuing credit cards have been forwarded to banks .

The Indian government has given approval to 40 new textiles parks to be set up and this would be executed over a period of 36 months.

The new textiles park would leverage employment to 400,000 textile workers