Textile Industry Operations

Submitted by:

Priyanka Beriwala (3)Shivam Dixit (13)Jackson Jose (23)Srujan Maddula (33)Yash Parikh (43)Saurabh Sharma (53)Aakash Tyagi (63)

Global Scenario

• Textile sector is valued at 437bn USD

• Falls under sensitive category due to Deflation in commodity prices Currency depreciation in emerging markets Poor economic prospects in Brazil and Russia China’s shift towards a services economy

Global Scenario

Strengths

• Resilient long-term demand thanks to rising middle classes in emerging markets

• Steady supply cost thanks to higher resort to man-made fibers, whose prices are less volatile than those of cotton or wool

Global Scenario

Weaknesses

• Profitability undermined by volatile raw material prices and rising wages • Fierce competition weighing on margins and further stress by e-

commerce activities • Changing consumer behavior forcing the T&C to become more flexible • Even though India is a giant in the world textile markets, China has an

advantage when it comes to Mass production

Global Scenario

China #1Producer #1Exporter

Italy #2Producer

#2Exporter

India #3Producer

#3Exporter

Key players

Global Scenario

India vis-à-vis Other Competitors

• Industry Structure• FDI• Trade Agreements• Cost and Availability of Raw Material, Manpower and Technology• Total Process Time• Technological Processes and Innovation

National Scenario

It can be divided into two main segments:

1.) Unorganized Sector

2.) Organized Sector

National Scenario

• India’s Textile and Apparel industry - country’s oldest second only to agriculture.• Second largest producer of cotton in the world and largest producer

of jute in the world.• 4% contributor to GDP• 11 % contributor to export earnings• Major Employment generator in India• 25% of world's spinning capacity

National Scenario

Sections in Indian Textile Industry:

• Man Made Fiber• The Cotton Sector• The Hand-loom Sector• The Woolen Sector• The Jute Sector• The sericulture and Silk Sector

Indian textiles

Raw material baseLabour

FlexibilityRich Heritage

Domestic market

Increasing dependence on cotton

Low Labour ProductivityPoor Infrastructure

Ever growing industryUse of IT in the field

Market access through bilateral negotiation

Rapid changes in Fashion CycleConservatism in India

Formation of Trading Blocks

SWOT

Case Study

Challenges

• Heavy competition • Fall of operating margins• Brand growth had slowed down • Great financial losses• Cost of doing business increasing • Stakeholders did no longer want to associate with the brand

Solutions

•Simplified the company structure - breaking down into customer-centric divisions rather than product-centric verticals•Divesting or shutting down of non-core parts of the business•Raymond shut down low-cost fabric brands while selling off carpets, curtains, upholstery businesses.•Outsourced the Raymond’s IT domain to Accenture •Drop in workforce by a fifth•Raymond then shifted focus on brand positioning and underwent renovation.

Benefits• Stock has doubled outpacing the Sensex's rise of 34%.

• Revenue has grown 37% and profits more than tripled.

• Raymond is back to being a venerated company

Major PlayersVardhman Textiles

• Dedicated Sourcing Teams

• Quality assurance – 100% on cotton texting, 5-10% bale testing

• Large inventories for instant production

• Complete Vertical Integration

• Power Independence

Major PlayersArvind Mills

• Constant diversification and expansion

• Sanjay Lalbhai’s Reno-vision

• Currently in JVs with Tommy Hillfiger, Calvin Klein, Nautica, Billabong, Debenhams, Hanes etc.

Good/ Ailing industries• Heavy FDI inflow – last 5 years 1.85 Billion USD

• 100% FDI in textiles

• Export promotion policies

• Union Cabinet – Rs. 6000 crore package to bring in investments worth Rs. 74,000 crores and generating 10 million jobs

Ailing industries

• Chinese advantage of mass production

• Requirement of infrastructural changes and Capex

Industrial Visit

YarnTwistin

gDyeing

Testing

Weaving

Warping

Thank you