PRE- FEASIBILITY STUDY

Polo T-Shirts

Submitted by: Anand Jignasaben, Anshika Rawat, Devesh Raushan, Ekta Gupta, Sonam Anand

INTRODUCTION

• Most of the production of this unit will be for export purpose, and hence will contribute in the earning of foreign exchange for the country.

• There is a vast range of knitted products like knitted T-shirts, blouses, trousers and shorts etc.

• However, this unit is designed on basic Polo T-shirt. Initially, for some time period, this unit will operate on CMT(Cutting, Manufacturing and Trimming) (commercial basis), but ultimately, this would be an export-oriented unit.

• This project will also have the potential for horizontal as well as vertical integration.

OPPORTUNITY RATIONALE

• The availability of suitable raw material, development of certain skill levels and introduction of international brands with local garment manufacturers are some of the favoring factors for further expansion of knit garments industry in the country.

• The quotas phase out factor in the year 2005 is also opening new doors of opportunities in the global trade of garment exports in the coming years.

• It has been forecasted, that in the coming days of post quota scenario, specialized and small or medium size garments stitching units will be able to perform in a better way.

• The reason for this is a lower cost structure and more developed and concentrated skills to produce the best possible products as per the requirement of international customers.

Proposed Capacity:• 2,000 Garments/Day (52

Stitching Machines)

Total Project Cost: • Rs. 7.5 Million

PROCESS FLOW CHART

CURRENT INDUSTRY STRUCTURE

• The garments and apparel industry of Pakistan, especially the knitwear segment, is characterized by heavy presence of vertically integrated units.

• 700 vertically integrated units in the knitwear sector.

• 4,000 garment units with a diverse range of stitching capability including leather, knit and woven garments.

 • 1,000 stitching units manufacturing T-shirts for export

• Major concentration of the industry is in Lahore and Karachi. Other hubs are Faisalabad, Gujranwala, and Sialkot.

MARKETING

• In view of the fact that main raw material and skilled manpower is available in Pakistan, scope for garment exports from Pakistan is unlimited.

• Effective marketing plays a very crucial role for making this business a success.

• Export orders can be generated either through local or foreign buying houses that have their presence in the country and source export orders for foreign customers from local industry.

• The other way to get export orders is through direct marketing in the international markets while initiating contacts with potential customers directly and/or through participation in international trade fairs, exhibitions etc.

• In the absence of export orders, other factories that have excess export orders can also provide sub-contract work on CMT (cut, manufacture & trim) basis.

• Guidelines for Garments Export Business

– Ensure best quality at all costs.

– Commitments with buyers regarding quality, price and shipment are basic essentials

– Concentration should be on non-quota or low priced quota garments and on those categories of garments where newcomers can get share of the cheap quotas at the time of auction.

 – Sourcing of export orders, can be a good startup point of marketing efforts. The prices offered by

these buying houses might be lower than those of direct orders, but at least they can be good entry point and learning experience for new exporters.

 – Many garment factories are considering it worthwhile setting up their overseas offices and

warehouses in the potential markets.

– The professional marketing staff and owner(s) should regularly visit international clothing fairs, shows and exhibitions.

– It is very important to be active, quick in response to the customers and flexible with buyers regarding their requests and requirements

– Regular subscriptions with local and foreign textile trade and fashion magazines will ensure the flow of latest marketing and trade information to the exporter.

• Total Market Size and Growth

– Total global trade value of T-shirts and other related knitted garments is more than $33 billion.

– USA is the largest importing country with a share of 29% and a total value of $7.4 billion. USA is a rapidly growing market with annual growth rates of 10% in value terms and 7% in quantity term.

– Germany is the second largest importer in this category with imports of $4.5 billion. However, German market has been stagnant during last many years and has grown by only 1%.

– Japan is the third largest importer with total imports of $3.8 billion.

– Kenya, Tunisia, Zimbabwe, Algeria and other African countries are growing markets for T-shirts.

RAW MATERIAL

• The main raw materials used in the manufacturing of Polo T-shirts are listed below:

♦ Printed or dyed knitted fabric (may be 100% Cotton or Polyester/Cotton in different ratios)

♦ Buttons

♦ Threads

♦ Labels

♦ Zippers

♦ Packing material

HUMAN RESOURCE REQUIREMENTS

For a garment-stitching unit of 52 stitching machines.

MACHINERY DETAILS

•Machinery List

Following combination of stitching machines is required for manufacturing 2,000 knitted Polo T-shirts per day. Approx. prices for Japanese origin machinery as given below:

LAND & BUILDING

• Total Land Requirement For garments stitching unit with production of about 2,000 garments per day, approx.

13,640 square feet covered area is required.

• Covered Area Requirement

• Recommended Mode– It is recommended that this project should be started in a rented building. This will reduce the initial

capital cost of the project.

• Suitable Locations– The clusters of garments stitching industry exist predominantly in Lahore, Karachi and Faisalabad.

The basic criterion for the selection of location within these clusters should be the accessibility of skilled manpower.

• Utilities Requirements♦ Electricity

♦ Telephone

♦ Fax

PROJECT COSTS

ESTIMATED TIME FRAME FOR PROJECT COMPLETION

♦ 2 months for completion of initial formalities, i.e. formation, registration of the company etc.

♦ 3-4 months for purchase, import and shipment of machinery, installation and trial run.

♦ 2-3 months for furnishing and staff/labor appointments and trial production.

♦ In case of self financed project, rented building, and local procurement of machinery, this setup can be started even within a few weeks time period. Getting finance from the bank may take 3-4 months.

♦ The project can take-off within 6-8 months as some of the activities will be in progress simultaneously.

KEY SUCCESS FACTORS

♦ Assurance of high consistent quality

♦ Surety of on time delivery

♦ Competitive rates

♦ Cost efficiency

♦ Better services to the customer i.e. claim settlement etc.

♦ Better communication with the customers

♦ To run a garment manufacturing set-up is a full-time job, and requires continuous hard work and attention. Anyone who is not prepared to put best possible efforts, concentration and hard work should not attempt to enter in this business.

THREATS FOR THE BUSINESS

• Quota factor (price and availability) plays a major role in defining the trends of exports of knitted products from Pakistan, and directly affects the exports of knitted garments.

 

• The labor force at the lowest level i.e. skilled/semi skilled manpower, machine operators are quite unorganized. Their job behavior and seriousness about the completion of any assigned job is sometimes quite unpredictable.

• Stitching expertise is not available at the very best possible level

• In case of CMT based unit, the requirement of credit and/or delay of payments from customer side might cause disturbance in the cash cycle.

• Asia pacific markets are emerging as new players in the world knitwear trade. Competition from China, Hong Kong, Vietnam, Korea is likely to increase in the coming years. NAFTA is also one of the threats.

REGULATIONS

Being the export-based unit, tax exemptions are available on earnings and profits. Also, government offers re-finance facilities, incentives in terms of rebates, and duty free machinery

imports.

REFERENCES

• SMEDA Polo T-Shirts Stitching Unit

• Kapra Boutique Pre-Feasibility Study BOUTIQUE (Women Designer Wear)

• 264TextilesFeasibility.

• giz2011-commercialisation-solar-energy-india-en

THANK YOUQuestions invited..