SETTING UP OF A GARMENT INDUSTRY

Dilip SinghKumar SarveshRajeev Sharan

A.P.-04(D.F.T.)

SETTING UP OF A GARMENT INDUSTRY

NIFT BANGALORE/ A.P. (DFT)/2008-12


CONTENTS

INTRODUCTION Stages of Business Development Objectives of the Project Scope of the Project Benefits of the Project SWOT Analysis Terms Used in Foreign Trades

Market Analysis

COMPETITIVENESS OF INDIAN APPAREL EXPORT FIRMS

CARPORATE MARKET

INITIATIVES TAKEN BY THE GOVERNMENT TO MAKE THE INDUSTRY GLOBALLY COMPETITIVE

LARGEST MARKETS

TARGETED TRADING COUNTRIES

TARGETED CUSTOMERS

EXPORT GROWTH IN INDIA

SHARE OF TEXTILE & CLOTHING EXPORTS IN INDIA’S TOTAL EXPORTS

SHARE OF EXPORTS OF VARIOUS CLASSIFIED SECTORS

HIGHEST EXPORTS FROM TEXTILE SECTOR

INDIAN GARMENT INDUSTRY - CURRENT ENVIRONMENT & FUTURE PROSPECTS

INDIA’S SHARE IN WORLD TRADE

APPAREL EXPORT GROWTH IN INDIA

TRENDS IN INVESTMENT AND PRODUCTION

TRENDS IN EXPORTS: HOW DOES INDIA FARE?

SUPPORTIVE GOVERNMENT POLICIES AND NEW TRENDS TOWARDS

NEW TRENDS TOWARDS RE-EMERGENCE OF THE TEXTILE AND APPAREL SUBSECTORS IN INDIA

FURTHER STEPS REQUIRED TO INCREASE INDIA’S COMPETITIVENESS

ANALYSIS ON OVERSEAS MARKET DEMAND OF JACKET INDUSTRY

Workflow in Departments Merchandising Department



Sampling Department Purchase Department Store Department Pattern Making Department Cutting Department Sewing Department Finishing Department Flowchart Explaining Workflow in Departments Trims and Accessory Department Flowchart Showing the Ideal Working of Fabric Department Spreading department

PRODUCTS TO BE MANUFACTURED Product specification of jackets

Product Specifications for Men’s Long Sleeve Shirt PLANT LOCATION

Plant Layout

MACHINERY LAY-OUT IN SEWING

Machinery Lay-out for Sewing room Machinery Lay-out for Collar, Cuff, Pocket, Button and Button Holing

Basic corporate information and industry Financial Information Technical Capability Technical Proposal

Product Description COST ESTIMATION

Labour FACTORY SUPERVISION OFFICE /ADMINISTRATION Machinery POWER Raw materials TOTAL COST OF THE PROJECT Calculation of Interest on Bank Loan Estimation of Depreciation Cost Quotation to Customer Calculation of Break Even Level

Request For Proposal Benefits of requests of proposal Specifications

RESULTS AND DISCUSSIONS Export contribution Export growth Export Development in India Improved Plant layout Modified Sewing Layout Cost Estimation



Feasibility of the project FURTHER DEVELOPMENTS CONCLUSION

INTRODUCTION



India is a country of opportunities and after the economic reforms of 1991 the world market has got wide open for India in all trades especially for the business in export. In such a scenario opening a garment export house is a very wise thing to do. India is a good place for textile and apparel industry as here we have abundant availability of cotton which is the primary requirement for apparel industry, labour comes cheap in India be it skilled or unskilled which considerably reduces the cost of production and hence attracting a lot of international business houses which sense an increased amount of profit in countries like India which over the years have made India a sourcing hub be the material based industries such as apparel or knowledge based industry such as IT and telecommunication.This project has been designed keeping in mind the huge potential of India in the apparel export industry and utilise this potential to the optimum level possible.

Stages of Business Development

Business idea generation

Business plan preparation

Start-up and growth

Established company

Interest of market

Financing decisions

Objectives of the Project

- To utilize the potential of india in the apparel industry to the optimum level.- To set up a new garment export company with an initial production target

of four lakhs shirts per with an installed capacity of six lakhs shirts per annum and 1lakh jacket per annum.

- To provide employment to a number of people thereby to develop their life styles

- To develop the economy of the country by earning foreign exchange

Scope of the Project



After the economic reforms of 1991 the export has played a very important part in the growth of the economy of the country . Export has considerably flourished in India be it the services and knowledge based sectors such as IT, telecommunication and BPO or material based industries such as textiles . textiles is one the major foreign exchange earner for India in that apparels make a very considerable amount of contribution. A garment export house set up keeping in mind this project if managed anrd run properly is sure to gain a considerable amount of foreign exchange for the country and provide employment to a large number of people in the country. With the growth and devlopement in the industry ther will be visible contribution in the economy of the country.

Benefits of the Project

1.Cash assistance2.Tax concessions3.Financial assistance4.Special assistance to export oriented industries5.Import benefits6.Foreign exchange7.Freight concessions8.Special concessions to small scale industries9.Awards for exporters10.Insurance against risks11.Raw material allocation12.Duty draw-backs13.Transport Concessions1 Cash AssiatanceCash assistance is allowed on export of selected products to meet the international price competitions. With these assistances, exporters can sell their products in foreign market on lower price than the price prevailing in the domestic market even less than their cost price. The assistance is available only for the registered exporters of approvedproducts.

1 Tax Concession

Exporters are entitled to many concessions in respect of the income tax, sales tax, excise duty, import duty and export duty etc.

2 Financial Assistance

Finance in the form of advance or loan is available for export from the Commercial Banks, Industrial Development Bank of India (IDBI), Reserve Bank of India (RBI),



Export Credit And Guarantee Corporation (ECGC) and State Bank of India (SBI) etc. The State Trading Corporation (STC) also provides assistance to exporters. The Banks also make payments against letter of credit (L/C) money in advance against export documents and packing credit facility is also provided to the exporters.

4 Special Assistances to Export Oriented Industries

Export oriented industries are given special assistances in respect of the following 1.Free permission to have foreign collaboration.2.Permission for increased capacity of production than the licensed capacity.3.Preference in obtaining industrial license for various types. 4.Priority in importing capital equipments, machinery, spares and raw materials etc.5.Priority for further expansion of the industry.6.Indigenous raw materials are made available to the exporters.

5 Imports Benefits

Registered exporters can get the benefits of replenishment of import contents like raw materials, accessories, spares etc against export of the product and can apply for import license against exports of specified products.

6 Foreign Exchange

Exporters can obtain blanket permits of foreign exchange on the minimum export ofRs.5,00,000 in the case of non-traditional goods and Rs.25,00,000 in the case of the traditional goods like jute etc. Exporters can also import samples under the blanket foreign exchange scheme.

7 Freight Concessions

Concessional Railway freight is allowed on the movement of a large number of export products from their centers of productions to the ports of shipment. Cash assistance is given against exports of some goods by air to compensate the high freight.

8 Special Concessions to Small Scale Industries

Special facilities and concessions available to small scale industries in respect of finance, procurement of raw materials, marketing of products and imports.

9 Awards for Exporters

Exporters with the outstanding export performance are eligible for award by the Government of India. The work relating to the product development, exploration of



difficult and new markets and distinct contribution in any of the exports fields are taken into consideration for the grants of these awards.

10 Insurance Against RisksExport involves a number of risks. The buyers may default or they go bankrupt. There may be victim of war and quake which may wreck his fortunes. There may be some import restrictions. Goods sent by ship might be lost in the course of transit etc.Exporters can easily pass all the burden of such types of risks to the Export Credit Guarantee Corporation (ECGC) for a modest premium.11 Raw Material Allocation

Arrangements for prompt and proper supplies of selected indigenous raw materials for manufacturing units producing goods for export have been provided.

12 Duty Draw-backs

When a product is exported, it is entitled to(a) Wavier or rebate of the central excise duty payable on the export products, and(b) Draw-backs of the whole of the customs and central excise duties paid on raw

materials and components used in the manufacture of the export products.

13 Transport Concessions

The railway allows concessions of two kinds. One in the priority in the movement of goods and the other rebate in the rail freights. The priority in the movement is available for the raw materials required for the manufacture of articles for export available, for the packing material, special priority label printed and distributed by the Ministry of Commerce can be pasted on the wagon doors carrying export cargo so as to ensure speedy movement.

SWOT Analysis

1 Strengths

o Abundant availability of cotton in India



o Cheap labour availibity of skilled labours

o Capability in product development

o Rich cultural heritage and immense diversity

2 Weaknesses

o Cotton production depends largely on rain

o Small scale nature of the industry

o Lack of expansion of the units

o Lack of technological up-gradation

o Delayed lead time

o Infrastructural problems

o Investment and technology

o Lack of exact marketing information

o Unbalanced sector wise (spinning, weaving and processing) developments

3 Opportunities

o Falling market share of the newly entered countries

o Multi fiber agreement phase out

o Backward integrated production in knit sector

o Increasing wage rates of competing countries

o Dissatisfaction of USA / EU with China in certain aspects

o Accelerated export effort

3 Threats

o Competition and pressure on price and quality due to multi fiber agreement phase out



o Newly developing competing countries like Vietnam and Bangladesh

o Unbalanced sector wise investments and developments

o No balancing between large and small scale sectors

Terms Used in Foreign Trades

1 Place and Mode of Delivery



Place where the buyer has to take the possession of the goods either by means of physical delivery (directly receiving the goods) or constructive delivery (receiving the documents like bills of lading or Railway receipts etc, which represent the goods).

2 Transport charges, Packing etc

Normally these charges will be collected from buyers only and some times paid by the seller also.

3 Insurance against Risks involved in Transit

Insuring for the goods is safe since there are many risks like fire, breakage, theft, improper handling of middle-men etc. There are many insurance companies undertake insurance. But it has to be decided who has to pay for the insurance.

4 C.I.F [Cost, Insurance, Freight]

C.I.F is normally included in the selling price itself. Seller undertakes all expenses upto the place of destination of the buyer.

5 Mode of Payments

This has to be clearly stated by the seller in his quotations i.e. whether the payment is in advance or against delivery or after a stipulated time along with the details of bank through which the payments have to be made.

With respect to mode of payment following terms are used

Loco price – cost of goods plus a nominal profit for seller, cost of transportation, insurance and all expenses to be paid by the buyer.

F.O.B. [Free on Board] – Transfer of the property and of the attendant’s risks thereafter are all for the account of the buyer as soon the seller has placed the goods on board. All expenses including placing on board and expenses incurred when the goods were in charge of the seller. And all these expenses will be included in the selling price itself. In USA it is necessary to precisely state “F.O.B. Vessel” in order to distinguish it from “F.O.B. Rail car (wagon) or F.O.B. Factory”.

F.A.S. [Free Alongside Ship] – Transfer of property and the attendant risks are for the buyer as soon as the seller delivered the merchandise alongside the ship.



Here the expenses incurred is to be paid by the seller till this level but the cost of placing on board from the freight and subsequent charges are for the account of the buyer.

Payment of Bills

O/D. [On demand] – Payments will be made on demand i.e on the presentation of the bill. This is also called as sight bills.



C.O.D.[Cash on delivery] – Cash to be paid on delivery of the goods either physically or against documents.

D/A. [Documents against acceptance] – Clearing the goods and selling before the maturity of the bill which will be more convenient to the buyer but not to the seller.

D/P. [Document against payment] – Documents will be held by the bank till the date of maturity, if the importer undertakes to receive the goods and pay the amount which is due for the bank and which has been paid to the seller.

L/C. [Letter of credit] – It is a letter issued by the banker of overseas importer to the exporter or his bank so as to claim the payment from the particular bank Workflow in Departments

Competitiveness of Indian Apparel Export Firms

Indian apparel exporting firms have proved their competitiveness in some market segments in recent years. Global trade in apparel is likely to change significantly due to



major changes in the international business environment. The paper takes a view that Indian apparel export firms will have the opportunity to increase their global market share provided they take the necessary steps to make themselves competitive in a quota- free world after 31 December 2004. The analysis is based on a survey of leading Delhi-based apparel exporting firms. Since the Delhi region accounts for India's largest apparel export trade, these firms are among the top firms in the country in terms of apparel export sales turnover. The paper studies select structural and operational parameters of Delhi firms that could impact their performance in future and brings out critical issues that require immediate attention. The paper also offers suggestions on how the government can facilitate better management practices in apparel exporting firms so that they become globally competitive.

Carporate Market

The corporatewear market can still be split into five segments. These are:

* workwear;

* careerwear;

* corporate casualwear;

* uniforms;

* protective clothing.

The dividing lines between them are becoming ever more blurred. It is no longer possible to be

categorical about where workwear ends and protectivewear begins. To most people a standard

boilersuit made of poly/cotton is workwear. But if the fabric is impregnated with chemical dyes which

make it reflect light, and it therefore becomes a high visibility boilersuit, has it transformed into

protectivewear? The industry has suffered from becoming ‘commoditised’, as a result of irrevocable

and irreversible changes in the supply chain. Consequently the market has become fixated on price to

its own detriment.



INITIATIVES TAKEN BY THE GOVERNMENT TO MAKE THE INDUSTRY GLOBALLY

COMPETITIVE

oSetting up of US $ 6 Billion Technology Upgradation Fund for modernising the entire

value chain of the industry

oLaunching of a Technology Mission on Cotton to improve

othe quality and productivity of raw cotton

oSetting up of Special Economic Zones and Textile & Apparel Parks

oOpening up of Textile Sector for Foreign Direct Investments



oProgressive reduction of import duty on textile machinery and products

Largest Markets

Following table (table. 2.1) gives the market shares of the major customers of India

Table. 2.1 Largest Markets

European Union 43.80%

United States 24.60%

Other Quota countries 5.60%

Non-Quota Countries 26.00%

Targeted Trading Countries

Quota Countries

1. United States of America

2. Canada

3.West European countries - Austria

Benelux (Belgium, Netherlands & Luxemburg)

Denmark

Finland

France

Germany

Greece

Italy

Portugal

Spain

Sweden

United Kingdom

Non-Quota Countries



1. West Europe – Ceuta

Switzerland

2. East Europe – Bulgaria,

C.I.S

Czechoslovakia

Hungary

Poland

Romania

3. West Asia – Bahrain

Israel

Kuwait

Oman

Qatar

Saudi Arabia

U.A.E

4. Oceania – Australia

New Zealand

5. South and East Asia – Hong Kong

Japan

Malaysia

Singapore

South Korea

Taiwan

6. Africa – Algeria

Canary Island

Kenya



Mauritius

South Africa

Sudan

7. South America – Argentina

Brazil

Chile

Colombia

Mexico

Netherlands

Panama

Venezuela

Targeted customers

1 United States – Tommy Hil Figure

Levi Strauss and Co

Gap Inc

Liz Claiborn

V.F.Corporation

J.C.Penny Company

Wall-Mart Stores

May Department Stores

Federated Department Stores Inc

F.W.Wool Worth Company

2 Japan – Mitsubishi Corporation

C.Itoh and Co

Sumitomo Corporation

Marubeni Corporation



3 France – Studio Aventures

Sunvalley

Export Growth in India

1 Total Export Growth in India

The following table (table. 2.2) gives the year wise total exports of India to various countries

Table. 2.2 Total Exports of India to various Countries

Year Rupees

in crores

1991-92 44041.81

1992-93 53688.26

1993-94 69748.85

1994-95 82673.40

1995-96 106353.40

1996-97 118817.30

1997-98 1301007.00

1998-99 1416035.00

The table. 2.2 shows the total exports in values from India to various countries.

The table shows a tremendous increase from the year 1997-98 than the previous years which has

earned more foreign exchange and better opening hope to the Indian exporters. So there is a total

change in the year 1997-98 which put a basement to earn foreign currency.

SHARE OF TEXTILE & CLOTHING EXPORTS IN INDIA’S TOTAL EXPORTS



SHARE OF EXPORTS OF VARIOUS CLASSIFIED SECTORS

HIGHEST EXPORTS FROM TEXTILE SECTOR



INDIAN GARMENT INDUSTRY - CURRENT ENVIRONMENT & FUTURE PROSPECTS

o12.5% share in India’s commodity export basket.

oRepresents value added sub-sector.

oLess import sensitive.

o7% of Industrial production.

oExport target of US$ 25 billion by 2010.

oFuture employment generation: Additional 6 lakhs jobs by 2005.

Source: Draft report of readymade garments for X Five year plan, National Textile Policy 2000-01.

INDIA’S SHARE IN WORLD TRADE

Apparel Export Growth in India

The following table (table. 2.3) shows the year wise total apparel exports from India



Table. 2.3 Apparel Exports of India to various Countries

Year Qty (pcs) in lakhs Value in lakh US$

1985 2559 8660

1986 3008 10550

1987 3842 14380

1988 3967 15520

1989 4941 19130

1990 6027 24950

1991 6648 24010

1992 7585 28830

1993 9052 34670

1994 9960 44220

1995 10602 44740

1996 11847 47920

1997 13015 48640

1998 13380 50490

1999 14040 53230

2000 15050 57450

2001 12643 45430

2002 12316 44100

Using the data in table. 2.3 graphs were plotted in Fig. 2.2 and Fig. 2.3 from which

the following points were observed

Quantity wise – There is a gradual and steady growth in the apparel exports from the year 1988 to

2000, but in the year 2001and 2002 there is a sudden fall.



Value wise - Even though there is increase from 1988 to 2000, there are some fluctuations then and

there. This may be even due to changes in the exchange rate of the currency. But in the years 2000

and 2001 there is a sudden fall in the graph.

By considering both the graphs there is a sudden fall which may be due to the diversion of our

orders to other countries like China, Bangladesh etc.

5 Apparels and Accessories Export Trade-Data of Competing Countries

2.5.1 Not-Knit Apparels and Accessories Exported to USA

Following tables (table. 2.4, table. 2.5 and table. 2.6) shows the year wise, country wise

Not-Knit (wovens etc) Apparels and Accessories Exported to USA from various countries

[value in thousands of US$].

Table. 2.4 Not-Knit Apparels and Accessories Exported to USA

year China HongKong Indonesi

a

Bangladesh Philippine

s

1989 1588557 2172436 412930 265316 541416

1990 2110809 2203501 445015 339610 666338

1991 2303306 2195271 425147 338835 639603

1992 3073946 2397712 594067 516308 747340

1993 3787807 2226880 724039 556818 842639

1994 3511269 2329259 754713 697798 886061

1995 3276590 2265519 870299 775809 947952

1996 3510669 2109248 983684 797186 919073

1997 4161308 1930828 1132902 1025377 962868

1998 3811343 2184134 1196353 1167443 1048265

1999 3750519 2084823 1261736 1161605 1061924

2000 4167042 2223939 1500569 1471538 1185460

2001 4152517 2003698 1599968 1449558 1176582



2002 4478787 1951781 1456514 1260601 1038342


Year India Italy Srilanka SouthKorea Thailand France

1989 512078 585217 261709 1434239 174572 143062

1990 558117 571411 317523 1358404 207098 162610

1991 553824 579168 352983 1212154 246981 143305

1992 744530 593294 482308 1250587 355278 143496

1993 829645 599698 637076 1247709 468231 135963

1994 991176 681987 653643 1155854 486824 141231

1995 905131 822105 719439 1029907 563279 162945

1996 938104 949515 768952 877907 568597 167690

1997 1014761 1003083 911264 884451 637408 155006

1998 1110992 1068681 991755 1000937 652101 178120

1999 1135665 1039939 949814 1112527 711264 161871

2000 1377783 1041451 1079992 1267518 826926 162789

2001 1275864 1025234 1070223 1122299 847171 174570

2002 1384733 1031864 1004306 919224 807535 176697


Year Pakista

n

Nepal Japan Swiz Spain Total

1989 81587 39770 167879 8182 11956 13359914

1990 89787 42511 104535 9791 15923 14364048

1991 85752 41529 90139 14106 12908 14891865

1992 142264 64087 85134 15277 9320 17966676

1993 159095 77963 77400 18905 9601 19861507

1994 164544 104468 65791 20195 12087 21062179



1995 160680 77269 52752 26097 11013 22217488

1996 166850 76899 50554 27912 20094 22869540

1997 223184 63411 54687 38901 22758 25992603

1998 224326 79579 43516 36159 22181 28140633

1999 231502 118986 34853 37623 20964 28691939

2000 308334 143768 38741 36788 18986 32800552

2001 299743 108718 42633 28464 15499 31691335

2002 255422 75661 38531 25506 20989 30895566

Data of certain countries have only been given but total in the last

column indicates the total imports to USA from all over the world

From the above table, it is clear that China is in the top most level in exports of clothing. There are

tremendous differences between China and other countries. This statistics shows very much

confidence that there are greater opportunities available to export the not-knit (wovens etc) apparel

items to USA.

There are a lot of fluctuations in values between the countries Indonesia, India, Thailand, South

Korea and Sri Lanka. So India can get the orders tremendously if the concentrations are made on the

points cited in the market trends of this project.

Knit Apparels and Accessories Exported to US

Following tables (table. 2.7, table. 2.8 and table. 2.9) shows the year wise, country wise Knit

Apparels and Accessories Exported to USA from various countries [value in thousands of US$].

Table. 2.7 Knit Apparels and Accessories Exported to USA

Year China Hongkon

g

Indonesi

a

Banglades

h

Philippine

s

1989 1068637 1632348 158213 59763 286487

1990 1086288 1659794 183716 88451 342030

1991 1131526 1746555 140095 98354 343720

1992 1401062 1869278 232419 171315 408709



1993 1509035 1713753 250749 144103 392726

1994 1574307 1994373 274859 149716 430383

1995 1376489 1995339 318705 220706 540576

1996 1514853 1818417 348495 223559 539651

1997 1836698 2041912 469936 306091 610830

1998 1859335 2263708 467064 330503 677105

1999 2024269 2189891 428228 363599 712296

2000 2034623 2268079 559271 470614 690502

2001 2277225 2198345 615068 480685 700451

2002 2619334 1949776 584960 494791 769030


Year India Italy Srilank

a

Southkore

a

Thailan

d

Franc

e

1989 28800 223642 91999 1127977 207420 33055

1990 30877 226101 106764 889796 228890 33378

1991 45009 204716 128029 717333 264689 25101

1992 83593 188702 142585 675611 360752 24420

1993 133174 177068 159108 697367 361789 23051

1994 192853 220873 171665 728743 416135 28424

1995 258358 254092 199313 630612 478357 33879

1996 311847 322687 232571 545912 490327 37298

1997 386028 353366 286693 670249 638365 43973

1998 449442 414632 308289 902601 816561 48897

1999 437414 441257 307940 989318 814022 52157

2000 473902 493688 376815 995061 1013976 56433

2001 505541 491237 416116 1049731 992468 56457

2002 571625 446909 401670 1133157 940075 53403




Year Malaysia Pakistan Nepal Japan Swiz Spain Total

1989 164172 106570 2416 44599 6287 4788 8583099

1990 189978 117167 1449 35364 6013 5248 8616738

1991 214945 123867 1184 23824 6690 3179 8853569

1992 215982 195195 846 23288 4774 2711 10288371

1993 195209 200081 1161 20461 5285 2272 10630702

1994 224936 276175 2239 15460 6757 3949 12188227

1995 256260 393270 3374 14650 7690 7510 13885932

1996 266430 400605 11675 13770 8097 4240 15060046

1997 294438 400582 20852 14741 9497 3780 18653248

1998 355906 458919 20939 18401 8954 4589 21654658

1999 364713 509646 17159 22989 9082 5516 23712398

2000 396578 620867 34770 32008 8396 7314 26405227

2001 413148 635077 40652 92714 9161 6573 26858264

2002 431908 627595 32384 135069 7155 4267 27823050

Note: - Data of certain countries have only been given but total indicates the

total imports to USA from all over the world and not the total of given data.

1)- HongKong and China are the competing Exporters to USA in Knits.

2)- HongKong was leading all the other countries till the year 2000 but from 2001 HongKong has got

drop and China has crossed it and raised up comparatively.

3)-India Exports only a minimum level to USA but there is a steady and gradual improvement in the

level by every year.

4)-South Korea, Thailand, Sri Lanka and Philippines are the competitors to India.

Trends in investment and production



In the post-independence period until the mid-1980s, India followed a strong inward-looking policy,

using a variety of regulatory mechanisms to orient the textile and clothing sector in a key way. A strict

industrial licensing regime required firms to seek government permission for establishing any new

operation or the expansion of existing ones, while several sectors such as garments, knitting etc., were

kept restricted for small-scale entrepreneurs, and strict labour laws proved a disincentive for expansion.

The New Textile Policy relaxed several licensing requirements, raised the maximum limits on

allowable investment and reduced import controls. Businesses were also encouraged to modernize their

technological base through the disbursement of cheaper lines of credit.

This trend continued in 1991 with the opening up of the Indian economy, but the sector remained

largely stagnant and decaying during the 1990s when several large mills closed and several traditional

entrepreneurs moved out of the textile trade. In fact, after a very long time the sector has received a real

boost only in the past four-five years as the general economy has substantially improved, leading to a

surge in demand. There is an all-around sentiment of tremendous optimism, backed by a surge in

production and investment growth. As the investment figures in figure I show, the sanctioned

investment (basically, projects in various stages of implementation) has shown almost 100 per cent

growth, year-on-year, for the past five years. The investment figures at this level have so far been

unprecedented in the history of the Indian textile sector.

Sanctioned investments in India's textile and clothing sector



As a result, production in the Indian textile sector has certainly received a boost as can be seen from

figures II and III, which show the increase in the production of yarn and fabric of cotton. In fact, the

growth in yarn production has averaged between 8.5 per cent and 10 per cent for various types of yarn

after a period of stagnation. Similarly, the rate of growth for fabrics in the past few years has increased

from 8 per cent to 10 per cent and the target has been set at 12 per cent during the next five years of the

Eleventh Plan. In cotton textiles, particularly, this growth has come after a long period of practically a

flat graph.

At this point, it is worthwhile analysing the growth drivers that are boosting India’s textile demand and

consequent production. In the domestic sector, the increase in GDP per capita, at around 8.5 per cent

for the past four to five years, has significantly increased the disposable income of the expanding

Indian middle class.2 The increasing number of working women, the greater use of credit cards and the

greater number of working youths (a result of the much talked about “demographic dividend” boom in

the construction/housing sector leading to the use of more home textiles) have all facilitated increasing

purchases of textiles and clothing items. Above all, the growing penetration of organized retail (the



percentage of which is expected to grow from the present 3 per cent to more than 10 per cent by 2010)

(Kearney, 2006) will facilitate availability, thus substantially increasing purchases of textiles and

clothing by Indian consumers.

In the export sector, the end of the MFA has given a boost to the Indian textile entrepreneur trend,

which has been augmented by the progressive dismantling of spinning and weaving from the developed

world.

In fact, in response to the growth drivers, and in anticipation of those drivers becoming sustainable in

the long term, the Indian textile industry has been making substantial investments in the past four-five

years (see figure I).



Trends in exports: How does India fare?

Indian exports from 1992/93 to 2005/06 showed an increasing trend (figure IV), especially in 2005/06,

when a growth rate of 18.33 per cent was recorded. However, India was not a big gainer during the

early period of integration. While the share of China in global textile and clothing exports increased

from 7.94 per cent in 1990 to 14.75 per cent in 2000, 20.93 per cent in 2004 and 24.02 per cent in

2005, India’s figures are more modest. India’s share increased from 2.22 per cent in 1990 to 3.16 per

cent in 2000, 3.12 per cent in 2004 and 3.56 per cent in 2005.

The United States has remained the largest single-country destination for Indian textile and clothing

exports, with its share rising from 21 per cent in 1995/96 to 27 percent in 2005/06 (figure V). The

European Union, with 41.006 per cent, is a major destination. Among other major destinations are the

United Arab Emirates (5.51 percent), China (3.05 per cent), Canada (2.21 per cent), Bangladesh (2.15

per cent) and Saudi Arabia (2.02 per cent). Compared with 1995 figures, there has not been any major

change. The United States and the European Union remain India’s major destinations, with the latter



country becoming of increasing importance. The major items of export to the United States comprise

ready-made garments and made-ups, including home textiles and carpets. However, Japan has declined

somewhat as an export destination, with a present export level of only 1.5 per cent compared with 3 per

cent earlier. At the same time, not unexpectedly, China has become an important importer of raw

cotton and cotton yarn.

Analysis of production and export trends

Certain characteristics of India’s textile and clothing sector stand out when compared to other

successful exporters. First, unlike several other exporting countries, India has a strong domestic textile

presence across the entire value chain, ranging from raw materials to garments. Indeed, India’s apparel

industry draws heavily on its local fibre and fabric base. It is thus hardly surprising that India’s export

basket consists almost equally of textiles and clothing, with values of US$ 8.86 billion and US$ 8.22

billion, respectively. Only a few countries such as China, Indonesia, Pakistan and Turkey, plus the

European Union, are strong in both subsectors or else their major clothing exporters are also significant

textile importers.



However, this strength in textile production and raw materials has not been properly utilized in

enhancing exports, as China has so capably done. One reason has been the restrictive government

policies that, until the 1990s, kept the garment subsector only for the small-scale enterprise sector,

while labour policies ensured that most industries would rather remain small and not take export orders

then expand. Another reason was a huge disparity between domestic textile producers and apparel

exporters – the two being separate set of entrepreneurs. The latter group was thus unable to take full

advantage of India’s extensive textile production capabilities.

Third, the Indian textile and clothing sector received an insignificant FDI inflow of only US$ 450.02

million between 1991 and March 2006, amounting to just 1.16 per cent of total FDI of US$ 38.96



billion.3 This was due, in part, to the lesser attractiveness of India as an FDI destination and in part to

the Government’s restrictive policy. Thus, India was unable to gain from the growing global

integration as the rapidly expanding apparel-exporting countries such as Cambodia, China, Mexico and

Viet Nam, plus the countries of Eastern Europe, were able to expand their apparel exports due to

substantial FDI inflows.

Another consequence of the poor FDI inflow was the relative absence of global retailers and textile

chains until quite recently. The weak presence of major buyers such as Wal-Mart, Sears, Nike and Liz

Claiborne hindered the organization of the domestic product towards substantive exports. A third factor

that hindered India’s export growth was its absence from practically all major regional free-trade

agreements. In the past decade, the fastest-growing apparel exporters – Bangladesh, Mexico, Romania

and Turkey – have all been part of preferential trade agreements while China has received massive FDI

inflows from Hong Kong, China, Taiwan Province of China and Japan. In fact, each of the above

exporting countries experienced a surge in exports after joining their respective regional trade

agreements or a bilateral preferential trade agreement.

Supportive government policies and new trends towards

re-emergence of the textile economy in India

1. Supportive government policies

It has been shown above that the Indian textile and apparel sector has shown positive signs of an upturn

in the past three to four years. The Government has taken several positive steps, detailed below, to

facilitate the smooth growth of the sector.4

(a) Technology Upgrading Fund Scheme

To facilitate technological upgrading in the sector, the Government launched TUFS with effect from 1

April 1999 for five years initially, and which has now been extended up to 2011/12. The scheme

provides for reimbursement of 5 per cent interest paid on term loans for technological upgrading of

textile machinery. In this way, the Government has assisted the Indian textile companies by ensuring

that they are not over-burdened by the high interest rate prevailing in the country.

(b) Integrated textile parks scheme



In order to a world-class infrastructure for textile units as well as facilitate the need for them to meet

international social and environmental standards, this scheme envisages the creation of textile parks in

the public-private partnership mode. Currently, 30 parks are in various stages of implementation, and

50 more are planned for the next five years.

(c) Fiscal rationalization

In the 2006 budget, the excise duty on all manmade fibres and yarns was reduced from 16 per cent to 8

per cent. The 2007 budget carried it forward by reducing the customs duty on polyester fibres and

yarns from 10 per cent to 7.5 per cent. The customs duty on polyester raw materials such as DMT, PTA

and MEG were also reduced from 10 per cent to 7.5 per cent. These measures are expected to make

manmade fibres and yarn cheaper and thus increase the competitiveness of fabric and apparel

manufacturers.

(d) Technology Mission on Cotton

In February 2000, the Government launched the Technology Mission on Cotton with the objective of

addressing the issues of raising productivity, improving quality and reduction of contamination in

cotton. Indeed, cotton production in the past three years has increased substantially and contamination

has been reduced, as assessed by independent agencies.

(e) Other steps taken to increase competitiveness

Earlier, only small-scale manufacturers were allowed to make woven RMG, knitted and hosiery

products. While the initial aim was to boost employment opportunities and promote entrepreneurship at

the smaller enterprise levels, in practice it rendered the small manufacturers uncompetitive globally. By

2003/04, the sector had been totally freed. In addition, FDI up to 100 per cent through the automatic

route has now been allowed.

2. Positive response of the industry

The industry has responded positively to these policy initiatives, and investment in this sector has been

unprecedented. In fact, growth figures during the past few years have made the entire textile industry

brim with unprecedented confidence and optimism. It is no coincidence that two separate studies

(although overlapping in part), carried out in 2006, projected almost identical growth targets for the



industry. The first study was the “Report of the Working Group on the Textile and Jute Industry for the

Eleventh Five- Year Plan”,5 in which the textile industry was projected to grow at 16 per cent in value

to reach US$ 115 billion by 2012. The report also projected a growth rate of 12 percent in volume for

cloth production while apparel was expected to grow at 16 percent in volume and 20 per cent in value

terms. Exports were expected to grow at a rate of 20 per cent in value. The second study was the

Confederation of Indian Textile Industries-sponsored “Vision for the Indian Textile and Clothing

Industry” prepared by CRISIL.6 The study envisages a figure of US$ 110 billion by 2012, boosted by a

CAGR of 10 per cent annually in the domestic sector and 19 per cent annually in the export sector.

New trends towards re-emergence of the textile and apparel subsectors in India

Several new trends can be seen in the textile and clothing sector that will only serve to strengthen the

sector.

(a) Consolidation and integration

There is a significant scaling up by way of horizontal consolidation and vertical integration. The

majority of the investments under TUFS have come not from new entrants but by the existing players.

With the removal of restrictions on increasing capacity, following the progressive liberalization of this

sector during the mid-1980s and continuing into the 2000s, the mean investment per firm in plant and

machinery has significantly increased. In the past fours, in particular, this trend has greatly accelerated.

The largest Indian firms, such as Arvind, Indian Rayons, Vardhaman, Welspun and Alok, among

others, have sanctioned investments of more than Rs 10,000 crores in the past few years.7

Second, there has been a significant forward integration into garments by yarn makers, spinners and

major weavers. For example, Arvind Mills and Vardhman exemplify this trend. Interestingly, a

significant number of cotton ginners are forward integrating into spinning, as can be seen in the cotton

areas of Andhra Pradesh and Punjab.

Third, significant backward integration by small and medium-sized knitwear exporters into yarn-

making is occurring in the Coimbatore-Tirupur area. In fact, some of the best examples of full

integration are exemplified by Alok, Welspun Industries and Vardhman Industries, which straddle the

entire range from spinning to branded garments and home textiles.



Thus, there is an all-around trend towards scaling up as well as capturing the entire value chain from

spinning to garmenting, in order to gain from the efficiencies at each level. Even the government-

facilitated integrated textile parks scheme is serving the purpose of informal consolidation, as despite

separate ownership, firms are likely to have a similar brand name and take common big orders.

(b) Blurring of boundaries between export and domestic markets

Whereas previously domestic textile companies and exporters formed two separate sets of

entrepreneurs, that boundary is now fast becoming blurred, as all major domestic players are becoming

significant exporters. As purchasing power in the Indian market has increased, due to India’s increasing

GDP and “demographic dividend”, there has been a rapid rise of domestic brands. Practically all of the

20 to 30 top textile andm apparel firms have introduced their domestic brands and are aggressively

positioning themselves within segments of domestic markets.

As these players become large, several of them are going beyond the national boundaries by purchasing

international brands in order to penetrate the First World market as well as to supply the domestic

market under that brand name. For example, in the home textile market, Welspun has purchased

Christy while GHCL has purchased Dan River and Roseby’s, Creative has purchased Portico brands to

facilitate entry into the United States and European Union markets while Alok Industries has purchased

8 to 10 European brands.

Thus, the earlier difference between domestic manufacturers and exporters is being whittling away; the

successful textile player has to constantly look at opportunities in the domestic and export markets.

(c) Entry of large domestic and foreign retail buyers

Until recently, India had been virtually ignored by the top international retail chains. Now their strong

presence is increasingly being felt and several top firms have opened their sourcing centres in India.

However, even more significant is the impending entry of the very large Indian retailers such as

Reliance, Bharati-Wal-Mart, the Aditya Birla Group and Tata-Trent. Although the current penetration

by organized retailers is only 3 per cent in India, it is expected to grow to around 12 per cent by 2012.

As clothing forms an important aspect of organized retail, the sale of clothing through organized retail

chain shops can be as high as 15 per cent to 20 per cent of total sales. This would still be much less



than in the United States, where the 24 biggest retailers account for 98 per cent of apparel sales. The

position in the European Union is similar.

International experience suggests that because of their large distribution network and considerable

buying power, these high-volume retail chains exert a great deal of control over prices and quality

terms. The retail experience has two other features. First is “lean retailing”, which allows retailers to

maintain a lean inventory, but will involves suppliers for “rapid replenishment” of goods. Second is the

concept of “full packaging” in that rather than buy fabric from specific sources for conversion into

apparel by different sources, the retailer prefers a “full package” solution from a limited member of

sources. Thus, the increasing presence of national and international major retailers in India will result

in further formal and informal vertical integration and horizontal consolidation in the sector as well as

in enhancing quality trends. The pressure on margins will serve to reduce inefficiencies in the system

by way of further modernization, consolidation and integration. The best outcome, however, will be the

increase in the demand for fabric and, hence, an increase in the size of the sector.

(d) Confident participation in foreign exhibitions

Indian textile and apparel exporters are now confidently exhibiting at international trade fairs as they

seek new areas and territories. The various textile and apparel export promotion agencies are currently

extremely pro-active and have introduced several schemes for promoting exports to new areas. An

example of this newfound confidence was the recent Indian participation in Heimtextile at Frankfurt

where, after the German exhibitors, the second highest number of participants were from India.

Further steps required to increase India’s competitiveness

(a) Improving labour laws

One of the main requirements for growth in the apparel subsector is the relaxation/amendment of the

labour laws, to ensure an equal chance of success for the country’s exporters and manufacturers in the

present global environment.8 Outdated labour laws have induced inflexibility in the clothing industry,

leading both to fragmented operations in order to circumvent these laws and to lost export orders due to

industry’s hesitation over expanding when there is an upsurge. Most of the countries competing with

India have labour laws that are more flexible. For example, the Chinese apparel industry has highly



flexible labour laws that allow for lay-offs during the non-peak season, hiring of contract labour, and a

flexible hiring and firing system in SEZ-based units. The Mexican apparel industry allows layoffs

during the slack business season.

The industry in India is proposing the provision of flexibility to textile exporting units in hiring labour,

subject to ensuring 100 days employment to cater to variations in demand. An increase in daily

working hours from 9 hours a day to 12 hours a day, and in weekly working hours from 48 hours a

week to 60 hours a week, is also being proposed.

(b) Decreasing transaction costs

Various studies have established that the transaction costs faced by the Indian industry are very high,

which adversely affects its competitiveness. A study undertaken by the EXIM Bank of India clearly

showed that although transaction costs in India had declined because of declining procedural

complexities, they were still substantially higher if compared with competitors. Transaction costs vary

from sector to sector, and are very high in the textiles and garment subsector, ranging from 3 per cent

to 10 per cent of export revenue in 2002. These costs, inter alia, are shown in table 2.

(c) Improving the general infrastructural conditions

This improvement includes roads, transportation etc., so that the costs of reaching the nearest port as

well as turn-around time at the port are globally comparable, to ensure that Indian exporters are not

placed at a disadvantage vis-à-vis global competitors.

(d) Augmenting existing training infrastructure



Significant improvements are necessary in order to ensure the availability of a sufficient number of

trained personnel needed to meet the huge shortfall. Already, areas such as Tirupur and Surat are

experiencing a noticeable lack of trained manpower.

Conclusion

Investment in the textile sector in the past three to four years, the consequent increase in yarn and

fabric production and the immense optimism witnessed in the sector have definitely resulted in a very

different scenario compared to the stagnation and the despondency witnessed just five or six years ago.

As India’s Minister of Textiles has said, “the erstwhile sunset sector is now recognized as the new

sunrise sector”.

However, it must be recognized that the industry still has a long way to go, these recent advances

notwithstanding. Large sections of the textile value-chain still need to be fully modernized, while the

export sector has yet to take full advantage of its existing production strength. There are many areas

around the world and many product lines where India is very weakly represented. Thus, while the

private sector will need to continue its heavy investment in this industry during the next several years,

building on the recent positive trends, India also needs to integrate more fully into the global textile and

apparel value chain in order to reap the full benefits from its strengths.

Only a coordinated effort by all – the Government, industry and individual units – can enable India to

achieve its apparently high and stretched targets of the eleventh Five-Year Plan. Therefore, the next

five years will indeed be a period of reckoning when the future direction of the Indian textile and

apparel sector will be set for the foreseeable future. The period 2007/12 will also show whether India

has successfully grasped the momentous and unprecedented opportunity that has come its way.

Analysis on Overseas Market Demand of Jacket Industry



Continent Distribution of Buyers in the Past Half Year

Continent Distribution of Buyers’ Inquiry in the Past Half Year (the outflow rate of inquiry in jacket industry was 59.3% in 2008)


Asia, Europe and North America areimportant export markets of World’sjacket industry.


Buyers’ Activity in the Past Half Year

Top 5 Countries/Regions with Most Buyer Feedback in Jacket Industry


In overall inquiry distribution, 86% of the inquiries of jacket industry are from Asia, Europe and North America. It has greatmarket potential.


Top Keywords in Jacket Industry





Post 2010 – Style analysis Graphics come with an oversized, animalistic twist in a strong mononchrome

palette. Artistic, painterly details to severe simplifications, The motifs befit consumer or manufacturer simulated customization, allowing

otherwise identical garments to be injected with personal-tinctures. Taking the lead from Givenchy's Spring Summer 2009 offing, dip-dye appears on

a multitude of classic summer shirts. The options are almost limitless, the technique applied to lumberjack check, a fresh take on an established trend, soft chambrays imbued with a hint of Western, and more formal attire.

Typically feminine florals are reappropriated by the boys, emulating Liberty's forage into their rich archives. Small florals lose all associations with interior



fabrics and granny-chic as they scale new notions of masculinity on traditional shirt shapes.

Refined sportswear meets prescribed tailoring, echoing Christopher Shannon's elegant sensibilities. Soft pastels are patchworked in contrasting materials on long-sleeve shirts with casually rolled sleeves, emanating a quiet aplomb. At Louis Vuitton the theme continues through to outerwear, echoed on masculine suiting

Colour pallet

ORGANIZATION



The business will be headed by Business Head (Vice President); he will be supported by four functional heads namely,

GM (Head Manufacturing), GM (Marketing/Merchandising), GM (HR/Admin) and Head Finance.

The Head Manufacturing (GM) will head the Pre-Production, Accessories Stores, Cutting Department, Planning, Industrial Engineering, Sewing Department, Quality, Finishing, Maintenance and MTM department. The head of departments has an indirect reporting responsibility to the Marketing/Merchandising Department. The Marketing/ Merchandising Department have a major role to play and are involved in every stage of the product development. GM (Marketing/Merchandising) heads the all the activities in the three departments namely Marketing/Merchandising, purchase department and fabric department. Head Finance has mainly two functional areas, the financial activities and the EXIM or the documentation activities. The GM (HR/Admin) heads the activities of the HR department, Admin department and the IT department.

The Department heads reports to the respective GMs for the various activities and major decision making in the departments.

The work flow of the industry is a planned and coordinated effort from all the departments. Giving the importance to quality and precision, checks would be performed at every stage of Manufacture right from pre-production to post-production. There would 16 different departments in the proposed industry. They are

1. Marketing and Merchandising Department2. Purchase Department3. Pre-Production Department4. Planning Department5. Fabric Department6. Accessory and Store7. Cutting Department8. Sewing Department9. Finishing Department10. Quality Assurance11. Industrial Engineering, Research & Development Department12. Maintenance Department13. Accounts and Finance Department14. Human Resource & Administration Department15. Information Technology Department16. MTM(Made to Measure) Department



All these departments are directly or indirectly related to the process of production. The following flowchart will explain the working of departments which are directly involved for the process of production right from receipt and conformation of order to purchase than production to final finishing processes.

PRODUCTS TO BE MANUFACTURED



Initially it has been desided to start with men’s full sleeve shirt and jacket depending on

the order received more products can be incorporated at later phase.

Product specification of jackets

Various fabrics used and varios parts of a jacket : -

1) Shell fabric2) Lining fabric3) Knitted fusing4) Parts Woven fusing5) Woven Reinforcement 6) Camel Canvas7) Horse Canvas 8) Felt

1) Shell fabric

Parts name Cut parts

Front 2Back 2Side panel 2Front lapel 2Top sleeve 2Under sleeve 2Breast pocket 1Breast pocket facing 1Top collar 1Collar stand 1Front pocket bone 2Front pocket flap 2

2) Lining fabric

Back 2 Front 2 Side body 2 Top sleeve 2 Under sleeve 2 Cigarette pocket lining 1 Welt pocket 1 Front arm tap 1 Flap lining 2 Triangle flap 1 Cigarette pocket bone 1



Cigarette pocket face 1 In pocket facing 2 In pocket bone 2 Pocket face 2

Knitted fusing-------------------------------------------------05

Canvas---------------------------------------------------------07

Canvas Felt----------------------------------------------------02

Parts fusing----------------------------------------------------14

Reinforcement------------------------------------------------03

TOTAL--------------------------------------------------------------------62

TRIMS & ACCESSORIES DETAILS

1) Shoulder pad2) Thread3) Satin tape4) Size label5) Neck label6) Content/Care label7) Sleeve label8) Main label or brand label9) Bridle tape10) Felling tape11) Besom tape12) Armhole tape13) Double sided fusing with paper14) Double sided fusing without paper15) Polybag16) Hanger

Product Specifications for Men’s Long Sleeve ShirtMen’s shirt – Long Sleeve (42”size)Name of the parts No of pieces per garmentMain PartsFront 2 pcs



Back 1 pcSleeve 2 pcsBack Yoke 2 pcsCollar 2 pcsCollar Band 2 pcsCuff 4 pcsPocket 1 pcsSleeve Placket-big 2 pcsSleeve Placket-small 2 pcsInterliningsCollar 1 pcCollar Band 1 pcCuff 2 pcsFront Placket 1 pc

WORKFLOW PROCESS CHARTSIn Merchandising Department

Receipt of Enquiry



Performance of Feasibility

Confirmation of the Order

Preparation of Samples/Counter Samples

Planning of Material

Preparation of Work Order Finalization of Planning with Factory Personnel

Information to Purchase for the Placement of Purchase Order

In Sampling Department

Receive Enquiry with Sample Garment and Specification

Identify Feasibility and Consumption

Develop Samples

Approve from Buyer

Identify Shrinkage Level of the Fabric and Final Construction Details

Size Set Preparation and Approvals

In Purchase Department

Affirmation of Enquiry by the Supplier

Placing the Purchase Order



Affirmation of Purchase Order by Supplier

Constant Evaluation of Suppliers for the Quality at Purchase Stage

In Store Department

Material Receipt at Store

Quality Check for Incoming Material

Material Issued Based on Production Order from Store to Production

In Pattern Making Department

Generation of Production Pattern

Generate Sewing Template

Maintain Library of Patterns

In Cutting Department

Bulk Cutting on CAD/CAM

Sorting and Numbering

Issue of Cut Pieces to the Sewing Lines

In Sewing Department

Module wise Sewing and Attachment of Components

Supervision and Application of Correct Methods in Sewing


Customer/ Buyer Mktg/MerchandisingDepartment

Patterning Department

Sample

Mktg/MerchandisingDepartment


Inline Checkers

Final Checkers(100% inspection for washing related defects and consistency in dimensional stability)

In Finishing Department

Pressing to give Final Shape

Finishing Quality Checkers

Packing as per Purchase Quantity Buyer’s Specification

Final Quality Check and Buyer inspection on AQL

Dispatch

Flowchart Explaining Workflow in Departments


Marketing/Merchandising Department

This department carries out the most important function of the firm i.e. getting new orders for the company. They are in direct contact with the buyers and their agents. They take the orders, process the orders and ensure that the products are delivered in the right time to the customers. On time delivery is the core success of every garment industry and the quality of the products make them retain their customers. Marketing/Merchandising department ensures that the quality of the product and the on time delivery of products. And due to this reason Marketing/Merchandising department has its involvement in each levels of the product development.After all the initial processes, the GM (Marketing/Merchandising Department) receives the order in the form of program specifying the following details

1. Order Quantity2. Production Description3. Details about Raw Material4. Details About Production Processes5. Details about Delivery Date Place and Type6. Price

After that the feasibility of the order is checked considering the following factors1. Production Capacity and capability2. Delivery Time3. Costing4. Quota Availability(almost negligible in post MFA scenario)5. Risk Factors

In Marketing and Merchandising Department the work flow is as follows.

Receipt of Enquiry

Performance of Feasibility

Confirmation of the Order

Preparation of Samples/Counter Samples

Planning of Material

Preparation of Work Order Finalization of Planning with Factory Personnel

Information to Purchase for the Placement of Purchase Order

Receipt of BOM

Coordinate with purchase department regarding raising PO

Receive goods against order

Quality and quantity check

Advise merchandising and purchase department

Issue trims according to work order

Arranging and allocating materials properly

Daily stationary issue

Coordinate with maintenance department regarding consumables

Preparing reports of issue

Alarm to merchandiser for shortage

26th FEB. 2010

Trims and Accessory Department

Flowchart for ideal working of Trims and Accessory Department

Pattern making Department

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26th FEB. 2010

Process Flow

57

Patterns made manually (from pattern making

section)

Patterns cut

Patterns placed on digitizer board

Points and curves marked through the

digitizer

Patterns made on computer system

Patterns used for marker making through software

Printouts through plotter

Receipt of BOM

Coordinate with purchase department regarding raising PO

Receive goods against order

Quality and quantity check

Advise merchandising and purchase department

Issue fabric according to work order

Arranging and allocating materials properly

Daily Report Generation

Coordinate with merchandising department regarding consumption

Fabric sponging

Checking fabric on four point system

26th FEB. 2010

Flowchart Showing the Ideal Working of Fabric Department

58

26th FEB. 2010

Spreading department

Load fabric roll by auto loading

Position the roll according to start selvedge

Specify the no. of rolls to be laid

Thread the fabric

Spread the perforated paper on lay table

Set up start end clamp determining lay length

Laying

Start air blow during transferring of lay to cutting m/c end

Cutting department

Put the marker on the lay

Check for all parts of lay with the help of miniature marker

Fill all the information’s of cutting format

Cut the lay by straight knife

Bundle the parts and send to bundling

PLANT LOCATION Site location for the plant has been proposed near the outer ring road in HSR layout which has the following advantages.

Reasonable land cost Easy availibilty of workers and very reasonable wage. Good and peaceful working condition Security is not a problem Continous power supply

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26th FEB. 2010

Transportation is available easily Banking facilities Sufficient water resources Good communication facilities

Plant Layout

It is basically the study the different physical configurations for an industrial plant.The major factors while making a plant layout is the following

Space- adequate area to house each function

Affinity-functions related to each other should be close to each other for the easy transfer for materials from one function to another.

Communication-facilities such as telephone, fax and internet should be easily available.

Utilities-all necessaties such as gas, electricity, water and sewer should be easily available.

The geographical limitations of the site are a important factor and involve the following factors.

Interaction with existing or planned facilities on site such as existing roadways, drainage and utilities routings;

Interaction with other plants on site;

The need for plant operability and maintainability;

The need to locate hazardous materials facilities as far as possible from site boundaries and people living in the local neighbourhood;

The need to prevent confinement where release of flammable substances may occur;

The need to provide access for emergency services;

The need to provide emergency escape routes for on-site personnel;

The need to provide acceptable working conditions for operators.

The most important factors of plant layout as far as safety aspects are concerned are those to:

Prevent, limit and mitigate escalation of adjacent events .

Ensure safety within on-site occupied buildings;

Control access of unauthorised personnel;

Facilitate access for emergency services.

Stores

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26th FEB. 2010

There is a shutter in the side to receive the materials, a door to despatch the fabricand interlinings to cutting section and a side door to issue thread etc to sewing section. There are store keepers, checkers and helpers. The raw materials like fabric, trims, accessories and packing materials are Received at the stores department . Here fabric and accessories are inspected and kept ready for issuing to the production.

Cutting Section

There is a cutting master, supervisors, layers, cutters and helpers etc. Fabric received from the stores are laid and cut here. Then assorted in the assorting table adjacent to the cutting table. Then the cut parts are put stickers to avoid getting mixed with the otherlays or shades and then bundled and sent to for stitching.

Sewing SectionThere are sewing line and a common set-up for collar, collar band, cuff, pocket making,buttoning and button holing as shown in The cut, assorted, ticketed and bundled parts are fed to the sewing section. Here the parts are joined in assembly line method. After attaching all the parts together, the garment is sent for buttoning and button-holing.

Garment Inspection Section

Here the garments are inspected for quality, measurements etc . After inspection the inspected garments are delivered to the washing section. Here inspection is carried out on the wider flat tables and in smaller slanding tables. other sections in the plant includes:

washing section CAD room Final Inspection, Ironing, Packing and Carton Storage section Sampling Section Canteen / Rest Room for Staffs/workers Toilet Security office

MACHINERY LAY-OUT IN SEWING

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26th FEB. 2010

Following machinery lay-out for sewing has been proposed to improve the productivity and to reduce the material handling. Machinery Layout in Sewing

Machinery Layout in Each Sewing Line

Following machinery lay-out has been proposed to be adopted in each sewing line

62

Common Set-up for Preparation of Collar, Cuff, Pocket, Buttonnig and Button Holing.

Sewingline-1

Sewingline-2

Sewingline-3

Sewingline-4

Sewingline-5

Sewingline-6

26th FEB. 2010

Fig. Machinery Lay-out in Each Sewing Line

T – Table 1 & 2 – ButtonHole Placket Stitching(DN) 3 – Button Placket Stitching (SN) 4 – Yoke Label Attaching (SN) 5 – Back Pleating (SN) 6 – Yoke Attaching (SN) 7 – Yoke Top Stitching (DN) 8 & 9 – Pocket Attaching (DN) 10 – Shoulder Attaching (SN) 11 – Shoulder Top Stitching (DN) 12 & 13 – Sleeve Placketing (SN) 14 & 15 – Sleeve Attaching (SN) 16 & 17 – Arm Hole Top Stitching (DN) 18 – Side Attaching (FOA) 19 & 20 – Hem Stitching (SN) 21 – Cuff Attaching (SN) 22 - Cuff Closing (SN) 23 – Collar Attaching (SN) 24 – Collar closing (SN)

Same set-up comes for 6 times for 6 lines

Collar Making, Cuff Making , Pocket making , Buttoning and Button Holing are common to all the 6 sewing lines.

Note

DN - double needle machine

SN - single needle machine

63

1

2

23

22

19

1

T

9

T

10

16

15

14

T

11

8

T

13

4

5

6

7

3

12

17

24

21

20

18

26th FEB. 2010

Machinery Lay-out for Collar, Cuff, Pocket, Button and Button Holing

Machinery lay-out for collar, cuff, pocket, button and button holing section whichis a common set- up for all the six lines.

Fig. Machinery Lay-out for Collar/Cuff/Pocket/Button Section

T - Table 25 & 26 – Button Holing Machine 27 & 28 – Button Stitching Machine 29 – Fusing Machine 30 – Pocket Creasing Machine 31 & 32 – Pocket Hem Stitching (DN) 33 & 34 – Collar in-seam Stitching (SN) 35 & 36 – Collar Turning Machine 37 & 38 – Collar Top Stitching (SN) 39 & 40 – Collar Band Stitching (SN) 41 & 42 – Collar and Collar Band Attaching (SN) 43 & 44 – Edge Cutters 45 & 46 – Ironing 47 & 48 – Cuff Inner Stitching (SN) 49 & 50 – Cuff Turning Machine

Machinery lay-outs have been proposed in Fig. 10.1, Fig.10.2 and Fig.10.3 which is expected to reduce the material handling due to the modifications in the positions of attaching and making of different parts which will increase the production due to the reduction in material handling time and reduction in strain put on the operatives.1.Basic corporate information and industry

Products that are to be produced Jackets

64

47

4145

49 39

43

37

35 33

3142

40

32

34

38

44

36

46

50

48

T T

27

30

29

26

28

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Men’s full sleeve shirt

Maximum order quantityWe will accept orders upto 1,00,000 pieces and we promise to give the products by the end of maximum 2 weeks.There is a separate department in the company which basically is for designing new garments and if any buyer is convinced to buy a design we are very much negotiable.

2.Financial Information

We have been financed by State Bank of India.All the dealings will be done through State Bank of India.

3.Technical Capability

Our company is fully backed by technical support.We will be using the best spreading and cutting machine.On the sewing floor we have all famous branded machines .We have flatlock, overlock , single needle lock stitch and double needle lock stitch machines.We have two fusing machines and 5 steam irons.

Technical Proposal

Technical proposal is basically a proposal stating the technical details of the company such as the machines that are used for various purposes.

Sometimes its very important to let the buyer know all the technical details that you have in order for their satisfaction. It also gives the buyer the assurance of the quality that they are going to get.

Product Description

Serve for the purpose of sewing shirts, uniforms, jeans, over coats, etc. Applied to a wide range of sewing materials. Synchronized feed by needle and feed dog can prevent slippage and puckering between layers of materials.

We are giving the details and specifications of all the machines and equipments that are beign used there .

1. Sewing Machine

SNLS Machines:

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26th FEB. 2010

Trademark: JUMBAO

Model: TC-740

Company: Ta Chung (Ningbo) Sewing Machine Co., Ltd

DNLS Machines

HS Code: 84522110Trademark: FEIFENGModel: 845Standard: ISO9001-2000Productivity: 500PCS/MONTHOrigin: CHINAPacking: 1PC/1CTNTransportation: BY SEACompany: Zhejiang Feifeng Sewing Equipment Co.,Ltd.

2. Ironing and pressing

My pressing equipment:

a vacuum suction pressing board ,

66

http://www.made-in-china.com/import-export/KqVmWuBJgahiprofile1/Zhejiang-Feifeng-Sewing-Equipment-Co-Ltd-.html

http://www.made-in-china.com/showroom/jumbaosewing/companyinfo/Ta-Chung-Ningbo-Sewing-Machine-Co-Ltd.html

26th FEB. 2010

steam iron with a 3,5 liter water tank, the sleeve board is turned under the board .

My pressing board is 116 cm long ( 45 inch) and 38 cm wide ( 15 inch) The pedal on the ground is used for the suction function.My press iron has a Teflon cover.

3. Fusing machine

RPS-L SeriesFeatures:1. Fusing width 200, 400 or 600mm2. One side open for large parts3. Easy belt change4. Endless belts5. Control Metronic 250 or6. Optional Metronic SPS-3 with Graphic- display

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4. Washing machine

Storage tank with jacket insulated up to 1 lakh liter, Storage tanks for Chemicals food of various sizes & capacity rang 20 liters to 1 Lakhs liters, Mixing tank, Steam jacketed tank, Dimple jacketed tank, Processing tank, Scraper type/Agitation tank, Spray dryer, Pressure vessels, Various equipment?s required for Pharmaceutical Industries, Various type of material handling systems as well as packaging system as per customer. Any type of complicated pressed component. Any type of ferrous / Non ferrous welding. Electro Polishing facility Tank Capacity 2 mtr X 10 mtr long.

COST ESTIMATION Labour DIRECT LABOUR

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26th FEB. 2010

Category of Workers No. of workers

Salary per worker

Total salary in Rupees

Tailors – skilled 80 3500.00 2,80,000.00

Tailors – semi skilled 86 3000.00 2,58,000.00

Button hole/Button m/c operator

8 3000.00 24,000.00

Pocket creaser, collar/cuff turner

7 2000.00 14,000.00

Fusing m/c operators 2 3000.00 6,000.00

Cutting m/c operators 4 3500.00 14,000.00

Ironers 11 2000.00 22,000.00

Packers 5 3000.00 15,000.00

Garment checkers 11 2000.00 22,000.00

Fabric checkers – skilled

2 2500.00 5,000.00

Fabric checker – semi-skilled

5 1800.00 9,000.00

Helpers 50 1500.00 75,000.00

Layers 6 2000.00 12,000.00

Store keepers 2 4000.00 8,000.00

Washing Assistant 2 3000.00 3,000.00

Mechanics 2 3000.00 6,000.00

Electrician 2 2500.00 5,000.00

Office boys 4 1500.00 6,000.00

Watch and Ward 4 1500.00 6,000.00

Sweepers 4 1500.00 6,000.00

Total Direct Labour cost per month

8,17,000.00

Additional Benefits @ 15%

1,22,550.00

Total Direct Labour cost per month including Benefits

9,36,550.00

Total Direct Labour cost per Annum including Benefits

1,12,69,200.00

Total Direct Labour cost per Annum including Benefits = 112.692lakhs

FACTORY SUPERVISION

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Category of Staffs No. of staffs Salary per staff

Total in Rs.

Production Manager 1 25,000.00 25,000.00

Cutting Master 1 12,000.00 12,000.00

Q.C.Incharge 1 8,500.00 8,500.00

Washing Incharge 1 7,500.00 7,500.00

Supervisor 9 7,000.00 63,000.00

Factory Supervision cost per month 1,16,000.00

Additional Benefits @15% 17,400.00

Total cost of Factory Supervision per month 1,33,400.00

Total cost of Factory Supervision per Annum 16,00,800.00

Total cost of Factory Supervision per Annum = 16.008 lakhs OFFICE /ADMINISTRATION

Category of Staffs No. of staffs

Salary per staff

Total in Rs.

Accounts/Admn Manager 1 18,000.00 18,000.00

Assistants 2 20,000.00 40,000.00

Export/Import Manager 1 28,000.00 28,000.00

Office Assistants 2 8,000.00 16,000.00

Fabric Merchandisers 2 25,000.00 50,000.00

Garment Merchandisers 2 17,000.00 34,000.00

Total Salaries per month 2,42,000.00

Additional Benefits @ 15% 36,300.00

Total Salaries per month including Benefits 2,78,300.00

Total Salaries per Annum including Benefits 33,39,600

Total Salaries per Annum including Benefits = 33.396lakhs

Machinery Estimation of Machinery Required and Cost Estimate

Details of Machine Quantity Cost per M/c in US$

Total Cost In US$

Single Needle Lock Stitching m/c [Juki DDL-5530N]

102 Nos 460.00 46920.00

Double Needle Lock Stitching m/c 56 Nos 1850.00 103600.00

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[Juki LH-3168SF]

Feed of Arm Machine [Juki MS-1190MF]

7 Nos 1950.00 13650.00

Overlock Machine [Juki Mo-3316E DE4-40H]

1 No 900.00 900.00

Button Holing Machine [Juki LBH-781U]

4 Nos 2700.00 10800.00

Button Sewing Machine [Juki LK-1903SS/304/MC-590-3K]

4 Nos 3850.00 15400.00

Fusing Machine [Hashima HP-400CS]

1 No 3510.00 3510.00

Pneumatic Pocket Creasing m/c 2 Nos 4320.00 8640.00

Collar Turning Machine [TSSM TS-414] 2 Nos 900.00 1800.00

Cuff Turning Machine [TSSM TS-424] 3 Nos 900.00 2700.00

Edge Cutter [Eastman EC-3] 2 Nos 450.00 900.00

Straight Knife Cutter [Eastman 629 X 8”BS-11]

3 Nos 1125.00 3375.00

Banned Knife Cutter [Wastema] 1 No 12000.00 12000.00

Cloth Drill [Eastman CD-3-6”] 1 No 800.00 800.00

Total value in us dollars 224995.00

Total Value in Indian Rupees @ Rs.47 per dollar 10574765.00

Details of Machine Quantity cost per m/c in Rs.

Total in Rs

Testing Equipments 1 set 500000.00

Ironing Table Set-ups [Ramsons] 10 sets 25900.00 259000.00

Fabric CAD with Scanner/printer 1 set 75000.00 75000.00

Clothing CAD with Plotter 1 set 475000.00 475000.00

Washing m/c (100kg ) with 2 Hydro Extractors (50kg) & 2 Driers (50kg)

1 set 1800000.00

1800000.00

Hand Scissors 20 Nos 300.00 6000.00

Total Cost for Machinery in Indian Rupees = 1,36,89,765.00 [136.897] lakhs]

11.4 Others (Furniture etc)

Trolleys for Material Handling 55000.00

Plastic Bins 42000.00

Cutting Table/Assorting Table/Checking Tables 48000.00

Other Furniture 50000.00

Total Cost for Furniture etc in Indian Rupees = 1,95,000.00 [1.95 lakhs]

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4 POWER Calculation of Power Requirements and Power Cost

Description of the Machines Quantity Power Consumptionper machine

Total power consumption in watts

Single Needle Lock Stitching m/c [Juki DDL-5530N]

102 Nos 1/3 horse power 25840

Double Needle Lock Stitching m/c [Juki LH-3168SF]


Feed of Arm Machine [Juki MS-1190MF]


Overlock Machine [Juki Mo-3316E DE4-40H]

1 No 1/3 horse power 247

Button Holing Machine [Juki LBH-781U]

4 Nos 270 watts 1080

Button Sewing Machine [Juki LK-1903SS/304/MC-590-3K]


Fusing Machine [Hashima HP-400CS]

1 No 800 watts 800

Pneumatic Pocket Creasing m/c 2 Nos 800 watts 1600

Collar Turning Machine [TSSM TS-414]


Cuff Turning Machine [TSSM TS-424]

2 Nos 400 watts 800

Edge Cutter [Eastman EC-3] 2 Nos 370 watts 740

Straight Kife Cutter [Eastman 629 X 8”BS-11]


Banned Knife Cutter [Wastema] 1 No 1000 watts 1000

Cloth Drill [Eastman CD-3-6”] 1 No 270 watts 270

Pressing Eqipments including Vaccum etc 10000

Washing machine, Hydroextractor and Drier etc 12000

Others including Lighting etc 4500

Total Power Consumption in watts

79072

power consumption ( 79.072X 8 X 300 units) = 189772.8 kilowatts

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Annual Power Cost @ 100% Efficiency (189772.8 X Rs.5.5) = Rs. 10.437lakhs

Annual Power Cost @ 60% Efficiency (113863.68 X Rs.5.5) = Rs. 6.26 lakhs

5 Raw materials

Installed production capacity = 4,00,000 pcs per annum @ 60% Efficiency Fabric Required @ 60% efficiency = 4,00,000 X 2.30 mts = 9, 20,000 mts Fabric Cost @Rs. 54/- per mtr = 9, 20,000 X 54.00 = Rs. 5, 52, 00,000.00Interlinings, Trims and [email protected] per pc = 4, 00,000 X 10 = Rs. 40, 00,000.00 Packing [email protected] per pc = 4, 00,000 X 4 = Rs. 16, 00,000.00 Total Raw Materials Cost = 552+40+16 = 608 lakhsTotal Raw Materials Costs per Annum = 608 lakhs@ 60% Efficiency Debtors - Direct Labours = 112.692 lakhs - Factory Supervision = 16.008 lakhs - Admn Salary = 33.396 lakhs ------------------ Total Debtors = 162.096 lakhs Expenses - Consumables = 2.07 lakhs - Power = 6.26 lakhs - Repairs & Maintce = 5.05 lakhs - Admn Overheads = 1.00 lakh - Selling Overheads = 2.00 lakhs ------------------ Total expenses = 16.38 lakhs Total Working Capital per Annum = 608+ 162.096+ 16.38 = 786.476Marginal Working Capital for Two Months = 786.476 / 6 = 131.08 lakhs Working Capital Margin for Two Months = 131.08 lakhs 7 TOTAL COST OF THE PROJECT

Particulars Rs. in lakhs

LAND

90.00

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26th FEB. 2010

BUILDING

231.50

MACHINERY

136.897

FURNITURES ETC

1.95

ELECTRICALS/GENERATOR

4.00

TRANSPORTS/ERECTION

4.00

PRE-OPERATIVE EXPENSES

2.03

WORKING CAPITAL (2 MONTHS)

131.08

OTHER MISCELLANEOUS ASSETS

5.60

TOTAL

607.057

TOTAL COST OF THE PROJECT = 607.057 LAKHS FINANCIAL ARRANGEMENTS PARTNERS CAPITAL = 157.057 LAKHS

BANK LOAN = 450.00 LAKHS ----------------------

T OTAL = 607.057 LAKHS

Calculation of Interest on Bank Loan ( Rs. in lakhs)

Year Opening Balance

Mid year Balance

Closing Balance

Interest @ 12% per Annum

Upto mid year Mid year to Year end

Total

1 450.00 450.00 450.00 27.00 27.00 54.00

2 450.00 420.00 390.00 25.20 23.40 48.60

3 390.00 360.00 330.00 21.60 19.80 41.40

4 330.00 300.00 270.00 18.00 16.20 34.20

5 270.00 240.00 210.00 14.40 12.60 27.00

Note : It has been considered that the loan amount of 375 lakhs is to be repaid

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from the second year in 15 equal installments of Rs. 30 lakhs by every six months.

2. Estimation of Depreciation

( Rs. in lakhs)

Particulars Machinery Building Others Total AnnualDepreciationBased on theStraight LineMethod

Cost of the Items 136.897 231.50 15.55

Transport/Erection 0.80 ---- 0.20

Contingencies ---- 1.00 ----

Total 137.697 231.50 15.75

% Depreciation 25% 7.5% 10%

Year-1 34.42 17.362 1.575 53.357

Total-dep of year-1 103.277 214.138 13.975

Year-2 25.819 16.06 1.397 43.276

Total-dep of year-2 77.458 198.078 12.578

Year-3 19.364 14.855 1.2578 35.477

Total-dep of year-3 58.094 183.223 11.320

Year-4 14.523 13.741 1.132 29.396

Total-dep of year-4 43.571 169.482 10.188

Year-5 10.892 12.711 1.018 24.621

Note : Calculation based on Straight line method

Cost Quotation to Customer Amt in Rs. Fabric 2.30 mts x Rs.62 per mtr = 142.60 Interlinings, Trims and Accessories = 15.00 Packing Materials = 5.00 Cut Make Trim & Overheads = 32.00 Washing = 3.00 Cost and Freight = 15.00 ------------ Total = 212.60 Add profit 15% = 31.89 ------------ Total = 244.49 ------------ Cost per garment = Rs. 244.50

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Note : In this we have considered a good Quality, cone dyed power loom fabric of 2/40’s warp and 20’s weft with 60 ends per inch and 56 picks per inch.

Calculation of Break Even Level (Rs. In lakh)

No Year 1 2 3 4 5

Variable Costs

(a)

Raw Materials

608.00

674.00

740.00

777.00

777.00

(b)

Consumables

2.07

2.42

2.76

2.94

2.94

(c)

Power

6.26

6.84

7.81

8.30 8.30

(d)

Selling Overheads

2.00

2.10

2.20

2.32

2.43

(e)

Total Variable Costs[Add (a) to (d)]

618.33

685.36

752.77 790.56

790.56

(f)

Total Sales

978

1100.25

1222.50

1283.625 1283.625

(g)

Total Contribution[(f)-(e)]

359.67

414.89

469.73

493.065

493.065

Fixed Costs

(h)

Direct Labour

92.692

102.54

110.74

119.60

129.17

(i)

Factory Supervision

13.82

14.93

16.12

17.41

18.80

(j)

Admn Salary

8.06

8.70

9.40

10.15

10.96

(k)

Admn Overheads

1.00

1.05

1.10

1.16

1.22

(l)

Repairs and Maintanance

4.15

4.36

4.58

4.80

4.80

(m)

Depreciation

49.75

40.51

33.36

27.76

23.37

(n)

Interest on Bank Loan

45.00

43.50

37.50

31.50

25.50

(o)

Total Fixed Costs

216.72

215.59

212.80

212.38

213.82

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Break Even Points(BEP) in Units

(p)

Utilized Capacity in lakh Units

3.00

3.50

4.00

4.25

4.25

(q)

BEP in no of lakhs of Units [(Divide (o) by (g) and multiply by (p)]

2.10

2.09

2.06

2.05

2.07

Request For ProposalA request for proposal (referred to as RFP) is an invitation for suppliers, often through a bidding process, to submit a proposal on a specific commodity or service. A bidding process is one of the best methods for leveraging a company's negotiating ability and purchasing power with suppliers. The RFP process brings structure to the procurement decision and allows the risks and benefits to be identified clearly upfront.The RFP purchase process is lengthier than others, so it is used only where its many advantages outweigh any disadvantages and delays caused. The added benefit of input from a broad spectrum of functional experts ensures that the solution chosen will suit the company's requirements.The RFP may dictate to varying degrees the exact structure and format of the supplier's response. The creativity and innovation that suppliers choose to build into their proposals may be used to judge supplier proposals against each other, at the risk of failing to capture consistent information between bidders and thus hampering the decision making process. Effective RFPs typically reflect the strategy and short/long-term business objectives, providing detailed insight upon which suppliers will be able to offer a matching perspective.We are including two types of requests:

a request for quotation, a request for information, and a request for qualification.

Benefits of requests of proposal:

This will Inform the suppliers that the company is looking to procure and encourages them to make their best effort.

The company has to specify what it proposes to purchase. If the requirements analysis has been prepared properly, it can be incorporated quite easily into the Request document.

The suppliers has to be alerted that the selection process is competitive, so only the best will be chosen.

It will allow for wide distribution and response.

It ensures that suppliers respond factually to the identified requirements.

By following a structured evaluation and selection procedure an organisation can demonstrate impartiality - a crucial factor in public sector procurement.

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Specifications1. It is basically a request for price.2. Basic corporate information and history.3. Financial information (can the company deliver without risk of bankruptcy).4. Technical capability (used on major procurements of services, where the item has not previously been made or where the requirement could be met by varying technical means). 5. Product information such as stock availability and estimated completion period.6. Customer references that can be checked to determine a company's suitability.

Stages of Business Development

Business plan preparation

Start-up and growth

Established company

Interest of market

Financing decisions

Further Developments

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RESULTS AND DISCUSSIONS1. Export ContributionEuropean union according to the market research is the largest importer of apparels goods for india accounting for the 43.5 % of the total export taking place. 2. Export Growth it is observed that the apparel export growth in India has increased gradually year wise with minimum deviation till 2000 and drops there after.This may be due to the fluctuations in the exchange rates and diversion of orders to the other countries.recently the export had been badly hurt due to the economic recession in the developed countries who are the major coustomer of the peoducts of india despite that there is a large scope for export growth in coming years especially after the economic recession subsides there is a expected boom in the export trade in India.4 Export Development in IndiaOut of the survey made it is found that the following steps can be adopted to develop the Indian exports:

High quality Cost optimisation Prompt delivery within the stipulated time Better utilization of available resources New technology Proper mind set to pay satisfactory wage rates

5 Improved Plant LayoutA modified total plant layout has been suggested to reduce the material handling which in turn will increase the garment production rate.6 Modified Sewing LayoutA modified sewing layout has been proposed to reduce the material handling which in turn will reduce the strain on the workers and thereby the efficiency of the workers can be improved. Efficient use of the available space has been done so that there is no negative space around.7 Cost EstimationFrom the cost estimation made it is found that the total cost of the project is around 786.476 lakhs. This will include a fixed capital of 608 lakhs and the working capital of 131.08 lakhs8. Feasibility of the project

It is found that this project will be feasible due to the following reasons:

From the calculation of the break even level we find that there is a gradual increase in the profit every year. And with increase in investement in raw materials the profit is also increasing.

From the cash flow statements it is observed that there is an increase in the net surplus, opening and closing cash balances every year.

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From the calculation of interest on bank loan it is quite clear that with type of profit the industry is going to make all the bank loans can be repaid very easily within the stipulated period of time.

From the calculation of break even point statement it is observed that there is an increase in the net profit every year.

Lincensing rules in India has gone very liberal so there wouldnot be any problem in getting the export licence in India as government of India is very supportive towards the export oriented business.

There is a certain demand in the market of the apparels as the world economy is coming out of recession and it is very easy to start a new business in this scenario.

The finances are very easily available as the banks are more than eager to give loans to set up India as they had done a very bad business during recession period .

Raw material is very easily available in south India as we have a large number of textile mills in south India where the plant is proposed to be set up

The working condition , power condition , security condition and other basic amenities are very easily available in the city like Bangalore which is supposed to be good for the industry.

FURTHER DEVELOPMENTS

Mass Customisation

As per the existing trends it has been predicted that in future there will requirements to make single single garments with individual measurements. Till now for mass production the average sizes from various consumers were taken and the garments were made in bulk where the consumer has to fit into the available size rather than the garment fits to the consumer. So, now the people have come to a level saying that the garment should fit to their size.

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So, the clothing industry will have to make the garments as per measurements of the individuals. This process of making single garments with individual measurements is called mass customization.

This mass customization is going to be done through E-Business.

The available fabrics and styles of garments etc will be put in the internet. And the fabric and garment samples of the same will be kept in the places where the sale is to be done. The consumers can select through internet as well by seeing fabric and garments etc in the nearest agency of the proposed garment company.

The consumers can go to the nearest scan center which is recommented by the company and get scanned and the scan center will send the scan points to the company through mail and the company will pay some commission to the scan center. Then from the scan points the body measurements will be arrived and will be input to CAD. CAD will auto generate the pattern as per the inputs.

The fabric will be cut through the CAD-CAM interface using single ply cutters. But the tailoring is going to be done manually only since automation in tailoring is problematic as of now. Then the final garment will be despatched through air.

Following Fig. 14.1 shows the different steps involved in mass customisation.

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2 Formation of weaving and processing mills

As said in the market survey India needs composite mills to get the best quality output. For that it has been planned to start up the own weaving and processing mill of the company so as to get the best quality garments. Here the yarn which is of better quality has to be selected and purchased and then to be woven into cloth and processed in the own mill which will make the fabric of the own company where better quality can be maintained which will give better quality on the final garments using the company’s efficient and effective all over control to compete with local, national and international markets.

CONCLUSION

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Following are the conclusions arrived at for setting up a new garment export company:

1) The apparel export growth in India is found to increase gradually. Recently it is on the declining trend due to the fluctuations in the foreign exchange rates and diversions of orders to the other countries.

2) China is found to perform better in garment exports trade with USA due to easy access of all types of raw materials, cost competitiveness, good infrastructure, trained productive manpower and excellent management etc.

3) Out of survey made the following parameters are to be adopted to improve the garment exports in India.

High quality Cost competitiveness Prompt delivery Better utilization New technology Proper mindset

4) Modified plant and sewing lay-outs are suggested for the improvement in the garment production rate.

5) The total cost of the proposed project is around Rs.567.5 lakhs, including a fixed capital of Rs.460.8 lakhs and a working capital of Rs.99.4 lakhs.

6) This project is found to be feasible in all respects.

So it is felt that by setting-up a new garment export company as said method and manner suggested, business could be run successfully with more profit and can earn foreign exchange which will develop the country and also leads to some employment opportunities. If lot of technical people in India come forward and take steps to open up the new companies it will reduce the unemployment in thenation and can lead to a Developed India rather than the existing Developing India.

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Education

SETTING UP OF A GARMENT INDUSTRY