Business Today Best CEO Award (Textile & Apparel ...textileindia.net/magazinepdf/71TIP April 2017...

Textile-Apparels-Fashions-Textile Machinery-Dyestuffs & Chemicals

Publishers: Parvathi TVR Chandran Publications April 2017 www.textileindia.net

Transforming India’s Textile & Apparel Industry

Indo Count Industries Ltd Rs 300 Crore Capex on Cards

Business Today Best CEO Award (Textile & Apparel) Presented byHonourable Mr Ravi Shankar Prasad, Union Minister of Law & Justice, Government of India to Mr Anil Kumar Jain

Textile IndiaProgress

Editor – Publisher: Viswanath Chandran VichaManaging Editor: Raju Chandran

Printed At: Supressa Graphics Pvt. Ltd.

Published by Viswanath Chandran Vicha for and on behalf of Parvathi TVR Chandran Publications at ‘‘Asheerwad’’ Ground Floor, 3/49 Sion, Road No. 2, Scheme No. 6, Sion East, Mumbai-400 022 and printed by him at M/s Supressa Graphics Pvt. Ltd., 258/259, A to Z Industrial Estate, Ganpatrao Kadam Marg, Lower Parel, Mumbai-400 013, Maharashtra.

Editor: Viswanath Chandran Vicha

Managing Editor: Raju Chandran

Textile India Progress is Registered with Registrar of Newspapers, Government of India, New Delhi, under Registration No 43692/82.

Publishers:Parvathi TVR Chandran Publications

In Memory OfMr. TVR Chandran & Mrs. Parvathi TVR Chandran


Textiles - Apparel - Fashion - Synthetic Fibres & Filament Yarns - Textile Machinery & Technologies - Accessories & Components - Dyestuffs & Chemicals

Registered Office:

Textile India Progress‘‘Asheervad’’ Ground Floor, 3/49 Sion,

Road No. 2, Scheme No. 6, East,Mumbai-400 022, India.

Tel: 91-22-24097782, 24097185, 24077883Email: [email protected]

Textile India Progress takes great pleasure in presenting in this issue an editorial feature on Indo Count Industries Ltd, which has done very well, inspite of a massive slowdown in the Indian textile and apparel industry. Mr Anil Kumar Jain, Executive Chairman of the company was honoured with “Business Today Best CEO (Textiles & Apparel) Award for the year 2016. The Award was presented by Hon’ble Union Minister of Law and Justice, Mr Ravi Shankar Prasad in the presence of Mr Aroon Purie – Editor in Chief Business Today and Mr Manpreet Chadha – Wave Group Vice Chairman at the “Business Today Best CEO Awards – 2016” in New Delhi recently.

Commenting on the 9MFY17 results, Mr Anil Kumar Jain, Executive Chairman, Indo Count Industries Ltd said “Against the backdrop of challenging environment our business continues to track ahead satisfactorily on the back of dynamic response to market trends, enduring customer relationships, “Customer First” approach and strong product portfolio. The operational performance in conjunction with steady cash accruals has been indicative of our company’s inherent strength”, stated Mr Anil Kumar Jain.

Indo Count Industries Ltd, one of the largest home textile manufacturer, is on a high growth trajectory. The company attained a sales turnover of Rs 1572 crore for 9MFY17 and has lined up a Rs 300 crore capital expenditure, for expansion of its capacity from 68 million meters to 90 million meters.

Marzoli of Italy is the only European textile machinery manufacturer providing the full line of machines for spinning of short staple fibers with over 150 roving frames being sold every year worldwide. Mazoli’s FT6E and FT7E, represents a state-of-the-art solution, yielding the best results for efficiency, reliability and quality. Textile India Progress presents a detailed analysis of these two products for the information of readers.

Mr Mukesh D. Ambani, Chairman and Managing Director, Reliance Industries Ltd, stated that “Reliance is focussing on growth strategy for creating sustainable returns for shareholders through value-enhancing high return projects. Our robust integrated platform, sound operational processes and business portfolio aligned to the needs of emerging India, enabled us to deliver another record performance in challenging market conditions”, stated Mr Ambani.

Textile India Progress Editorial Team is pleased to inform its readers that the numerous efforts put in by the Team, since January, 2015 to January, 2017 in espousing the cause of Indian textile and apparel industry, with Government of India, yielded successful results and many of the recommendations have been enunciated as Government policies. We hope, these bold policies will result in rapid growth of Indian textile and apparel industry. The journal is in constant dialogue with Government of India, with the objective of growth of Indian textile and apparel industry.

Viswanath Chandran Vicha


April 2017 1

Letter From Publisher

Textile IndiaProgressTextile India

Progress

Textiles - Apparel - Fashion - Synthetic Fibres & Filament Yarns - Textile Machinery & Technologies - Accessories & Components - Dyestuffs & Chemicals


Committed to Values And ExcellenceTextile India Progress Mission For

Transforming India’s Textile and Apparel Industry to Attain $350 Billion Textile Output by 2025Textile India Progress is a journal dedicated to the overall cause of textile industry, including standalone spinning mills, integrated textile mills, powerloom and handloom sectors. The journal is pub-lished bimonthly every two months in February, April, June, August, October and December every year. The journal’s objective is to espouse the cause of Indian Textile and Apparel Industry. Senior Editors of the journal have mutual exchange of views and ideas with Textile Leaders and Government of India, with a view to fructifying the National Textile Vision document and National Textile Policy, which has set the target for Indian Textile and Apparel Industry to increase from current output of $110 billion to $350 billion output by 2025 (domestic $200 billion and export $150 billion).With this ambitious target, textile industry can alter the job scenario and manufacturing landscape, thereby fulfilling Honourable Prime Minister’s Vision to put textile segment as part of “Make in India” program. It is possible to attain this ambitious target, however dif-ficult to implement many of the innovative ideas. These innovative ideas can be successfully implemented with the co-operation of In-dustry, Government of India and Consumers. Traditional millowners need to change their mindset of running only spinning units and they must install processing plants, going for forward integration in processed fabrics and finally to garment production.India is currently exporting cotton yarn, spun yarn and polyester filament yarn together for $7 billion. If India exports processed fab-rics, the value addition of this cotton yarn, will be an additional five times of this value at $35 billion. If India exports garments, the value addition of this yarn will be ten times of the value of cotton yarn at $70 billion.Textile India Progress is committed to Values and Excellence. Se-nior Editors of the journal are committed in their Mission to work with Government of India, Industry and Consumers. Mr Raju Chandran, Managing Editor, Textile India Progress was invited by Government of India, Minister of State for Textiles (Independent Charge), to a detailed discussion on what should be done to attain $350 billion textile output by 2025. The textile expert suggested that we must have a thrust on Value Addition from cotton yarn to garments and from synthetic fibres and filament yarns to garments. This will in-crease the current output by 10 times. Mr Raju Chandran told the Minister that as against our current export of $7 billion worth cotton yarn, India can export for a value of $70 billion annually, if these cotton yarn and synthetic fibres and filament yarns are converted into garments. Hence, he has recommended the immediate setting up of Integrated Textile Parks, near the Sea Coast. In case of stand-alone spinning units, Mr Raju Chandran suggested that Govern-ment of India, must extend them facilities to expand into processing and weaving facilities, so that these units, become viable and are able to make profits. Textile India Progress has offered to share its Knowledge with Government of India, Industry Leaders, Consum-ers, with the objective of rebuilding Indian Textile Economy, which is currently facing severe crisis.

EditorialEditorial Content ...................................................................................... 5

Company NewsItalian Textile Machinery – 2016 Closes with Growth in New Orders ..................6

Cover FeatureIndo Count Industries Ltd on Growth Trajectory 9MFY17 Sales Turnover at Rs 1572 Crore ............................................................................................... 7Business Today – Best CEO Award (Textile & Apparel) for Mr Anil Kumar Jain ......... 7ICIL part of S&P BSE 500 ..............................................................................8Indo Count Industries Ltd – One of the Largest Home Textile Manufacturer ..............9Indo Count Industries Ltd Committed Towards Serving the Society at Large – in Education, Healthcare, Women Empowerement, Water and Sanitation and initiatives towards Sustainability ............................................... 10-11

Special FeatureMarzoli Spinning Solutions ..............................................................................12Drafting system ............................................................................................13False twist area............................................................................................13Winding area ...............................................................................................14The creel ....................................................................................................14Doffing .......................................................................................................14Energy efficiency ..........................................................................................15

Company NewsReliance Industries Ltd focussing growth strategy on creating sustainable returns for shareholders through value-enhancing high return projects ....................16Consolidated Financial Performance .................................................................163Q FY 2016-17: Financial Performance Review and Analysis (Consolidated) ............ 17Refining & Marketing Business ........................................................................19Oil and Gas (Exploration & Production) Business ................................................19Refining & Marketing Business .......................................................................20Petrochemicals Business ................................................................................21Polyester Chain ............................................................................................21Oil and Gas (Exploration & Production) Business ............................................... 22Review of US Shale Operations (3Q FY17) ....................................................... 23Digital Services ...........................................................................................24Media Business ........................................................................................... 25Grasim reports financial results for Q3 FY 2016-17 ............................................ 26Market for UV protective clothing grows as skin cancer rates soar ........................ 2780 Years Karl Mayer - Eight decades of innovation for the textile industry ............. 28Welspun India Ltd’s Innovative Home Fashions Supplier ...................................... 29

Special Feature100 Years Peter Dornier – “From human flight to flying threads” ...........................30USTER fosters new talent in 10 years of university programs - The young leaders driving China’s textile industry ............................................................. 33USTERIZED®– the symbol of excellence in spinning ........................................... 35Changing Dynamics of Global Apparel Trends .............................................. 36-37Opportunities for Export of MMF Textiles to Kenya and Ethiopia ........................... 38Visit by Indian Ambassador, Azerbaijan to SRTEPC ...........................................43Azerbaijan’s Textile and Clothing Imports from World during 2015 .........................45Year end Review 2016 – Ministry of Textiles ................................................46-50Indian Textile Industry – Challenges & Opportunities ............................................51Textile industry in China: Vacating or Relocating? .............................................. 52Indian Madeups Industry: A Labour Intensive Sector in the “Cut & Sew” Basket....... 53Indian FTAs: Need for a Strategic Thrust .................................................... 54-55ColorJet Wins ‘India’s Largest Manufacturer for Wide Format Digital Printer’ Award ........ 56

The Editor is in no way responsible for the views expressed by the Authors and for the authencity of write-ups of products published in this issue. The articles, news items, editorials published in this Issue are meant for information purposes only and thus cannot be considered as soliciting and offer for sale or purchase of textiles, textile machineries, dyestuffs and chemicals or any other products. No material should be reproduced without the written consent of the Editor.

CONTENTS

2 April 2017

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Textile India Progress is grateful to His Excellency, Mr Narendra Modi, Prime Min-ister of India for the prompt and numerous responses, to Textile India Progress recom-mendations submitted to him during Janu-ary, 2015 to January, 2017. In this period, Government of India, Ministry of Textiles and Ministry of Finance, introduced major re-forms for Indian textile and apparel industry.

Textile India Progress has now recom-mended to Honourable Prime Minister, Cabinet Ministers and various Secretaries of Government of India to levy lowest GST rate for Manmade Fibres and Apparels, while introducing the GST Bill.

Following Textile India Progress Team’s recommendations to Government of India, from January, 2015 to January, 2017, Gov-ernment of India has enunciated numerous policy measures for growth of Indian textile and apparel industry.

Indian textile and apparel industry have an exponential growth potential to substan-tially increase its exports, provided, we do the right product development and go for forward integration, to produce value added products. Particularly, home textiles, kitchen textiles, medical textiles, construction tex-tiles and automobile textiles have great po-tential to increase exports. In home textile category, we already have large well-estab-lished companies, who are manufacturing excellent quality products and have gained a large market share in the export market. Some of these companies are: Welspun India Ltd, Indo Count Industries Ltd, Trident Ltd, Himatsingka Seide Ltd and Sutlej Textiles and Industries Ltd. In sectors, kitchen tex-tiles, medical textiles and construction tex-tiles, we do not have substantial presence. It is therefore necessary for standalone spin-ning mills, to evaluate possibilities of setting up projects in these sectors, which are still untapped by Indian textile industry. In home textiles, there is abundant established ca-pacity and existing companies have already chalked out ambitious expansion plans, hence, may not be advisable for a newcomer to enter into that field, which may not be a viable proposition. For example, Indo Count Industries Ltd has chalked out a plan to ex-pand its home textile capacity from 68 mil-lion metres to 90 million metres per annum, with Rs 350 crore capital expenditure in two phases. Similarly, Welspun India Ltd has also chalked out a large expansion plan, which is currently under implementation.

Indian textile and apparel industry can at-tain US$350 billion textile and apparel output

and create 35 million jobs by 2025, from the present US$140 billion textile and apparel output. This US$350 billion textile and ap-parel output also includes India’s exports of textile and apparel and hence, India’s textile mills must focus on product development, rather than producing and exporting cotton yarn and grey fabrics.

Government of India must enunciate policies for rapid growth of Indian textile and apparel industry. Some of the recommenda-tions made by Textile India Progress Team to Government of India are:-

a) Government of India must emulate China Textile Industry and focus on Process-ing and Garmenting, focus on Niche Products to produce Garments, such as Sports Wear, Leisure Wear, Party Wear, Yoga Wear, Technical Textiles, and Home Textiles. Government must set up Inte-grated Textile Parks, near Sea Coast, in Maharashtra, Gujarat or Andhra Pradesh, for producing such Garments, so that these Garments, could be exported. Government must make FDI investments in textile machinery attractive, for FDI to flow into India. International textile ma-chinery manufacturers, producing cot-ton textiles machinery and machineries for Manmade Fibres must be given an at-tractive proposition to welcome FDI into

April 2017 5

our country.

b) Banks exposure to Indian textile and ap-parel industry is Rs 2,50,000 crore and Government of India must protect the bank funds, for which, we require Inno-vative Policies from Government of India.We must on Focus on getting Export mar-ket for processed fabrics and garments, where the margins are attractive. Here forward integration becomes imperative.

c) India has 900 textile mills, out of which 850 mills are standalone textile spin-ning mills. Structural weakness in Indian standalone cotton spinning yarn mills are confirmed from the fact that many of them are unable to even pay bank inter-est, for loans they have taken, to set up the spinning projects. Many standalone spinning textile mills are already on the verge of closure.

d) Government of India must engage with Successful Textile Industrialists, to take their guidance, to bail the In-dian Textile and Apparel Industry from the current crisis. His Excellency, Mr Narendra Modi, Prime Minister of India, must formulate a Team of Experts in his Office, to prepare a Road Map for the growth of Indian Textile and Apparel In-dustry.

EDITORIAL

Indian Textile and Apparel Industry have Exponential Potential for GrowthGovernment should consider lowest GST rate for Manmade Fibres and Apparels

Honourable Mr Santosh Kumar Gangwar, Minister of State for Finance, Government of India, in discussion with Mr Raju Chandran, Managing Editor of Textile India Progress.



The orders index for textile machinery compiled by ACIMIT, the Association Italian Textile Ma-chinery Manufacturers, for the period from October to Decem-ber 2016 rose by 5% compared to the same period for the previ-ous year. The value of the index thus came in at 94.2 points (ba-sis: 2010=100).

This growth affected both the foreign markets, where the index registered an absolute value of 103.4 points (+5%) and Italy. In this case, the increase compared to the period from October to De-cember 2015 was 16%, with an absolute value for the index of 55.7 points.

On an annual basis, and com-pared to 2015, the index regis-tered an average increase of 4% (absolute value: 95.2). Domestic sales were up significantly, ris-ing by fully 14% (absolute index: 55.2), confirming the vigour of the Italian market. Foreign mar-kets recorded a more contained increase in orders (+3%, for an absolute value of 104.0).

The president of ACIMIT, Raf-faella Carabelli, commented on

Italian Textile Machinery – 2016 Closes with Growth in New OrdersACIMIT represents an industrial sector comprising around 300 manufacturers (employing close to 12,000 people) and producing machinery for an overall value of about 2.6 billion euros, with exports amounting to more than 85% of total sales. Creativity, sustainable technology, reliability and quality are the characteristics which have made Italy a global leader in the manufacturing of textile machinery.

the results as follows: “The data for the index for the last quarter of 2016 confirm a year we can cer-tainly define as positive, with an overall growing orders index.”

Data for Italian exports, updat-ed to the first nine months of 2016, confirm a positive trend, with a 3% increase compared to the same period of 2015. “In spite of our far from brilliant export performance in the world’s three major markets, China, Turkey and India,” states ACIMIT’s President, “our sales are nonetheless growing in Ban-gladesh and Pakistan, as well as in North America and Europe”.

The outlook for 2017 appears to be dynamic, despite the cur-rent geopolitical uncertainties. For its part, with the support of the MISE and ICE-Agency, over the course of the year ACIMIT will continue to push forward in promoting internationalization, as over 20 Country/markets will be the object of promotional ini-tiatives aimed at the penetration of Italy’s textile machinery sector. Among these initiatives are proj-ects laid out for Sub-Saharan Af-rica and Iran, both areas in which ACIMIT is insistently promoting its activities for growth.

ITALIAN TEXTILE MACHINERY

INDEX OF ORDERS AT CONSTANT VALUE (BASIS 2010=100)

6 April 2017


Cover Feature

Indo Count Industries Ltd on Growth Trajectory9MFY17 Sales Turnover at Rs 1572 Crore

Rs 300 Crore Capex on Cards – Capacity expansion from 68 million meters to 90 million meters progressing satisfactorily Anil Kumar Jain, Executive Chairman

April 2017 7

Indo Count Industries Ltd, has been making progressive increase in its sales turnover in the last few years. Commenting on 9MFY17, Mr Anil Kumar Jain, Executive Chairman, Indo Count Industries Ltd said. “Against the backdrop of challenging market environment, our business continues to track ahead satisfactorily on back of dynamic response to market trends, enduring customer relationships. “Customer First” approach and strong product portfolio. The operational performance in conjunction with steady cash accruals has been indicative of our company’s inherent strength. As we enter our next phase of growth, we see several untapped opportunities along with better acceptability in the three new segments of Fashion, Utility and Institutional bedding across a widening footprint. We are enthused at the positive response to our recently launched brands. The augmentation of capacity will further enhance our position in the market.Our company is committed towards profitable and equitable growth. We are confident that our focus on innovation, customer centricity and prudent business practices will lay the foundation for growth in the years to come”.

Mr. Anil Kumar Jain, Executive Chairman, was honoured with “Business Today Best CEO (Textiles & Apparel)” Award for the year 2016 in December 2016. The Award was presented by Hon’ble Union Minister of Law & Justice, Government of India - Mr. Ravi Shankar Prasad in the presence of Mr. Aroon Purie – Editor in Chief Business Today and Mr. Manpreet Chadha - Wave Group Vice Chairman at “Business Today Best CEO Awards – 2016” in New Delhi. A detailed analysis and extensive study of BSE 500 listed companies was done using key financial parameters for last three years by PwC, Business Today’s knowledge partner. The final winners were chosen by the Jury comprising Mr. Nimesh Kampani, - Founder Mr. Anil Kumar Jain, Executive Chairman at the award ceremony

Business Today – Best CEO Award (Textile & Apparel) for Mr Anil Kumar Jain


& Chairman - JM Financial; Ms. Kalpana Morparia, CEO - JP Morgan Chase; Mr. Haigreve Khaitan, Senior Partner - Khaitan & Co; Mr. Sri Rajan, Chairman - Bain & Co.

RevenueRevenue for 9MFY17 at Rs. 1572 crore, increased by 2.4% com-pared to 9M FY16.

EBITDA marginThe company reported an EBITDA of Rs. 329 crore for 9MFY17 as against Rs. 321 crore in the same period previous year. The EBITDA margin for 9MFY17 stood at 20.9%.

Total Comprehensive Income after TaxTotal comprehensive income af-ter tax for 9MFY17 stood at Rs. 179 crore as against Rs.170 crore in 9M FY16 translating in a 5.8% growth on y-o-y basis.

Cash ProfitThe Cash Profit for 9MFY17 stood at Rs. 244 crore as against Rs. 218 crore in 9M FY16 translating in a 11.7% growth on y-o-y basis.

EPS (not annualized)The increased bottom-line trans-lated into an EPS of Rs. 9.08 in 9M FY17 as against Rs.8.60 in the same period last year on a face value of Rs 2 per share.

Interim DividendThe Board of Directors declared an Interim Dividend of 20% Re. 0.40 per Equity Share of Face Value of Rs. 2/- each for the Financial Year 2016-2017.

Phase I Capex of Rs 175 crore :Capacity expansion from 68mn meters to 90mn meters at Indo Count Kagal Plant is progressing satisfactorily.Phase II Capex of Rs 300 crore:The project is under progress.

Update on the Domestic Venture:Indo Count Retail Ventures under the brand ‘Boutique Living’ com-menced domestic operations from October 2016.

8 April 2017

Mr. Anil Kumar Jain, Executive Chairman and Mr. Mohit Jain, Managing Director with the award at the award ceremony

ICIL part of S&P BSE 500Indo Count Industries Ltd (ICIL) part of S&P BSE 500, is one of India’s largest Home Textile manufacturer. Under the leader ship of Mr. Anil Kumar Jain, Executive Chairman who has been awarded “Business Today Best CEO – Textiles & Apparel” Award for 2016 and goal driven approach of Mr. Mohit Jain, Managing Director of the Company, the Company has focused on some of the world’s finest fashion, institutional and utility bedding and has built significant presence across the globe. Over the years, the Company has successfully carved out a niche for itself and has become a total bedding resource. Capacity expansion of the Company from 68 million meters to 90 million meters is progressing satisfactorily.


Indo Count Industries Ltd – One of the Largest Home Textile Manufacturer

Indo Count Industries Ltd (ICIL) (part of S&P BSE 500), is one of India’s largest Home Textile manufacturer. Under the leader-ship of Mr Anil Kumar Jain who has been awarded as one of the India’s Best Top 100 CEO’s 2015, the Company has focused on some of the world’s finest fashion, institutional and utility bed-ding and has built significant presence across the globe. Over the years, the Company has successfully carved out a niche for itself and has become a total bedding resource. The capacity expansion of the company from 68 million meters to 90 million meters is progressing satisfactorily.

The Company’s product comprises the following:-Bed Sheets: Flat sheet, fitted sheet and pillow casesFashion Bedding: Comforters, bed in bag, quilts and cover-lets, decorative pillows, etc.Utility Bedding: mattress pads, protectors, comforters filled with poly fibreInstitutional Linen: Basic white bedding, duvet covers and shams; caters to hotels, hospitals and othersThe Company has launched the following innovated products:-Infinity cotton: Blend of a few finest cotton varieties in the world resulting in superior yarnThermal balance: Balances temperature between body and bed to deliver superior sleep characteristics

ICIL has introduced three lifestyle brands “Boutique Living”, “Revival” and “The Pure Collection” in March, 2016 in US Mar-ket. Further 3 new brands viz Sanderson, Harlequin and Scion, licensed through Walker Greenbank PLC UK, having strong presence in UK & Australia were introduced in North America.

ICIL is second largest manufacturer and exporter of bed linen from India; amongst the top three bed sheet suppliers in USA and eleventh largest global home textiles supplier to USA. ICIL has a strong global clientele and exports to more than 54 coun-tries. Major revenues are derived from USA, the Company’s largest market; its other prominent markets comprise UK, Can-ada, Europe, MENA and Australia etc. The Company enjoys long-term relationships with large global marquee retailers.

ICIL has also been honoured in past with numerous prestigious awards from TEXPROCIL including Silver Trophy for second highest exports of Cotton Madeups in Category III for the year 2015-2016 & 2014-15, “Export Excellence Award” in the Top Exporter – Non MSME – Trading House Category by FIEO, Western Region.

CARE and ICRA have upgraded credit rating as “CARE AA- / ICRA AA-“ for Company’s Long Term Bank Facilities and “CARE A1+/ ICRA A1+” for short term bank facilities. ICRA has assigned outlook as stable.

April 2017 9


EDUCATIONChallenge Poor quality of education and

lack of quality teaching method-ology

Student retention Inadequate infrastructure

Achievements Implemented e-learning program

linked to state education curricu-lum

Benefitted 27,900 students of 71 Govt. aided schools

Significantly improved the aca-demic score and reduced stu-dent dropout.

Distributed school bags to 17,000 students

Way forward Reaching out to more schools

and students.

HEALTHCAREChallenge Poor Infrastructure at Primary

Health Care Centre Lack of quality health care ser-

vice in remote rural location

Achievements Health on Wheels through 2

medical vans reaching 48 distant villages.

Touching 5,000 patients per month by providing free medi-

cine, check-up and referrals Addressed issues like Doorstep

Reach, Accessibility, and Avail-ability of Medical Services

Refurbished primary health care centre

Way forward Spreading foot-print of medical

service in more villages by add-ing more vans

WOMEN EMPOWERMENTChallenge Lack of training & employable Skill

Lack of personal freedom

Society/culture confining women to household work

Achievements

Started Skill Development Cen-tre in collaboration with IL & FS

124 women trained in stitching skill & 98 successfully employed in the industry

Making ‘grass root’ women inde-pendent and contributing to up-grading their standard of living

Indo Count Industries Ltd Committed Towards Serving the Society at Large – in Education, Healthcare, Women Empowerement, Water

and Sanitation and initiatives towards SustainabilityIndo Count Industries Ltd, has taken a lot of steps towards improving its CSR activity, by focussing on key areas that affect the Society at large. Some of the initiatives taken by Indo Count Industries Ltd are commendable. A review of the activities of the company indicate that Indo Count is involved at different levels, doing its best towards the chosen sector. ICIL’s CSR activities stand on five pillars of Education, Healthcare, Women Empowerment, Water & Sanitation, and Sustainability Initiatives.

10 April 2017


Way forward

Enhancing new skills and addi-tional employment avenues

WATER & SANITATIONChallenge

Contaminated drinking water

No access to proper sanitation facilities

Achievements

46 Pure Water Unit & 3 RO Sys-tems installed in schools and remote villages for safe drinking water

Benefitting 17,000 people

Built 4 toilet blocks with the help of Zila Parishad and Gram Panchayat

Way forward

Reaching out to more lives for safe drinking water

SUSTAINABILITY INITIATIVES Installed Effluent Treatment &

RO Plant thus Recycling 90% of Water

Solar power and natural day

lighting used in new unit will con-siderably reduced carbon foot-print.

Acoustic System and Electro-static Precipitator Installed helps in reduction of Noise and Air Pol-lution.

Each plant has been equipped with rain water harvesting system and sewage treatment plant.

Way forward

Enhance usage of renewable energy.

April 2017 11


The spindles drive is a group drive where mo-tion is transmitted through toothed belts. In tradi-tional machines spindles are moved by one mo-tor which, through a long shaft, transmits motion to bevel gears which drive pulleys that drive belts which ultimately make spindles rotate. A group drive allows to substantially simplify this transmis-sion system. The drive comprises several motors, each one driving a limited number of spindles. Each motor, through a pulley, drives toothed belts which transmit motion directly to the spindles. Shafts, gear boxes and bevel gears are eliminated. Therefore it is possible to: - reduce maintenance costs: fewer transmission

components are needed and lubrication is no longer required;

- reduce noise; - reduce vibrations: lower mechanical transmis-

sion entails lower wear of transmission compo-nents and therefore lower vibrations. This en-ables the machine to work at higher speeds;

- increase transmission efficiency: transmission system comprises only a pulley and toothed belts: no shafts, no bevel gears are included. This allows to reduce energy consumption.

FT6E and FT7E: leading-edge roving frame technology Marzoli Spinning Solutions

Marzoli, the only European manufacturer of the full line of machines for spinning of short staple fibers with over 150 roving frames being sold every year worldwide, is the ideal referent for whoever wants to choose the best technology. Its FT6E and FT7E represent a state-of-the-art solution, yielding the best results for efficiency, reliability and quality.

Few machines in a modern spinning mill are as critical as the roving frame. Building a solid and reliable roving frame is not an easy task and yet again it is absolutely necessary for the spinner as this machine can feed, depending on the count being produced, thousands of spindles at the spinning frames.

This write-up aims at presenting from a technical and technological point of view these machines. The FT6E and FT7E are driven by independent drives for the drafting system, the flyers, the spindles and the bobbin rail. Every drive is coordinated by the central CPU which ensures perfect synchronization of all the movements involved in bobbin formation.

12 April 2017


Drafting systemMarzoli roving frames can be equipped with

a 3-over-3 or 4-over-4 top-of-the-class drafting system. There are two options for the cylinder di-ameters: the standard solution has a diameter of 32mm; however, in case there is a high percentage of short fibers in the processed material, cylinders with a diameter of 27mm can be used to reduce the gauge between nipping points. This guaran-tees a better control of short fibers during draft.

Marzoli drafting system can also rely on highly efficient cleaners for both top rollers and bottom drafting cylinders. For top rollers there are two op-tions: rollers with rubber fins and revolving felt belts. For the bottom cylinders there are rubber scrap-ers. These solutions guarantee that at every turn both top rollers and bottom cylinders are always cleaned. This, along with the high quality of each and every component, entails the perfect control of fibers during draft and top quality of the roving.

False twist areaAs bobbins on modern roving frames are ar-

ranged in two rows, rovings can have different angles at the delivery of the drafting system and at the entrance of the flyers’ top. It has been argued that these different angles can entail differences in the spinning triangle at draft delivery and different tensions of the rovings thereby causing an uneven take up of twist and variations in roving count.

On Marzoli machines all rovings lay parallel to one another: they have the same angle at the de-livery of the drafting system and at the flyers’ en-trance for both the front row and the back row of bobbins.

Individual sensors ensure that each and every roving break is properly detected and the machine securely stopped, even in case of roving overlap around the cylinder/top roller. On the other hand, if dust passed in front of the sensors the machine would not stop, it would continue to run. Individ-ual sensors also make suction not required. This, along with the IE3 motors and an overall design meant to minimize energy consumption, allows to save up to 4 Kwh.

Roving tension is kept constant within a pre-set range through sensors that constantly monitor rov-ing’s fluctuations between the delivery of the draft-ing system and the flyer’s top and adjust the speed of the spindles accordingly. These sensors play an important role in ensuring that there are no false drafts in the roving and that roving breaks are kept to a minimum.

April 2017 13


Winding areaIt is argued that to increase productivity and low-

er investment costs, spindlage and dimension of bobbins should be increased. This is only partially true: a higher number of spindles per machine re-duces the cost of the investment as the total re-quired number of spindles can be reached with fewer machines. From a unit cost (cost per spin-dle) point of view, there is an economic advantage that stems from the amortization of the cost of the head and rear stocks on a higher number of spin-dles per machine. However, the higher the number of spindles, the smaller the benefit stemming from a further increase in machine’s length. Machines exceeding a certain number of spindles also entail higher costs for electronics and drafting drive. Last but not least a higher number of spindles per ma-chine causes a reduction in efficiency.

The FT6E (110mm gauge) can reach 224 spin-dles and produce bobbins of 16” x 6”. The FT7E (130mm gauge) has a spindlage up to 168 spin-dles and can produce packages of 16” x 7”. These numbers represent the limit in terms of number of spindles and dimensions of bobbins to main-tain top efficiency standards. A higher number of spindles per machine would not give an additional benefit to the spinner as the decrease in machine efficiency would not be counterbalanced by the re-duction in the average cost per spindle.

The flyers installed on Marzoli’s roving frames are made of ultra-light alloy and are dynamically bal-

anced so that even when working at high speeds, vibrations are kept to a minimum. Marzoli’s roving frames can reach up to 1,500 rpm mechanically and the roving can be wound on standard tubes, with a diameter of 53.5 mm, or on thinner tubes , with a diameter of 48mm, to have a further slight increase in bobbin capacity.

The creelThe creel is equipped with hexagonal aluminum

rollers to prevent false drafts, a very important as-pect especially when working with combed slivers. Optic sensors positioned between the rollers en-sure that in case of sliver break the machine is im-mediately stopped. Marzoli roving frames can be fed with cans with a diameter of up to 24” which allow to reduce machine stops and increase its ef-ficiency.

DoffingOne of the most crucial aspects on modern

roving frames is automation especially on doffing since doff is costly, frequent, has a quite-important negative influence on efficiency (especially on long

14 April 2017


roving frames) and, if done manually, can damage the roving bobbins.

Nowadays several options for automatic doff-ing are available. One of the simplest, most reli-able and fastest, automatic doffing systems is the one that Marzoli has implemented, tested and re-fined in the last twenty years. With this solution in less than 3 minutes full bobbins are replaced with empty tubes and the machine is restarted. Dur-ing the new doffing cycle, the full bobbins are for-warded to the transport system which carries the

packages to the spinning frames.

Also a semi automatic doffing option of the ma-chine is available. With this version ergonomics has been substantially improved if compared to standard manual-doffing machines. After bobbin formation is completed, the bobbin rail lowers and tilts out for an easy bobbin collection. Furthermore, there is a parking rail in front of the bobbin rail with empty tubes so that substitution of full bobbins with empty tubes is as easy as possible.

With the release of the FT6E and FT7E Marzoli offers also a third option: the roving frame with the pre-arrangement for automatic-doffing upgrade. During doffing the bobbin rail lowers and slides out horizontally, just like the fully-automatic model. Besides permitting an easy collection of the full bobbins, this solution allows an easy and cost effi-cient upgrade of the machine to the fully-automatic version.

Energy efficiencyTo succeed in the highly com-

petitive and globalized sector spinners must minimize produc-tion costs of whom energy con-sumption represents an impor-tant component.

Marzoli roving frames repre-sent an outstanding machine from the energy consumption point of view. This machine is the only one available on the market that does not need suction. In fact thanks to the individual sen-sors installed as standard any roving break can be promptly identified. No suction is required to capture the broken roving and make it pass in front of the photocell.

This, along with the IE3 premium efficiency motors, the light weight components (e.g. the bobbin rail in aluminum) and an overall design meant to minimize friction and transmission inefficiencies, entails an energy saving of over 4 Kwh for every hour of operation.

April 2017 15


Reliance Industries Ltd focussing growth strategy on creating sustainable returns for shareholders

through value-enhancing high return projects

16 April 2017

Mukesh D. Ambani, Chairman and Managing Director

QUARTERLY CONSOLIDATED NET PROFIT OF ` 7,506 CRORE ($ 1.1 BILLION), UP 3.6%QUARTERLY CONSOLIDATED PBDIT OF ` 14,215 CRORE ($ 2.1 BILLION), UP 3.9%

RECORD QUARTERLY STANDALONE NET PROFIT ` 8,022 CRORE ($ 1.2 BILLION), UP 10.0%FIRST PHASE OF NEW PARAXYLENE PROJECT COMMISSIONED

% chg. % chg. % chg. 3Q 2Q 3Q w.r.t. w.r.t. 9M 9M w.r.t.(In ` Crore) FY17* FY17* FY16 2Q FY17 3Q FY16 FY17* FY16* 9M FY16Turnover 84,189 81,651 72,513 3.1% 16.1% 237,291 229,512 3.4%

PBDIT 14,215 13,551 13,679 4.9% 3.9% 41,355 36,178 14.3%

Net Profit (ExcludingExceptional Items) 7,506 7,206 7,245 4.2% 3.6% 21,825 18,304 19.2%

Net Profit 7,506 7,206 7,245 4.2% 3.6% 21,825 22,614 (3.5%)

EPS (`) 25.4 24.4 24.6 4.1% 3.4% 74.0 76.8 (3.6%)

EPS (`) (ExcludingExceptional Items) 25.4 24.4 24.6 4.1% 3.4% 74.0 62.1 19.1%

Consolidated Financial Performance

(* Based on Ind AS)

Reliance Industries Ltd is focussing its growth strategy on creating sustainable returns for its shareholders, through value-enhancing, high return projects, stated Mr Mukesh D. Ambani, Chairman and Managing Director of the company. Commenting on the results for Q3FY17, Mr Mukesh D. Ambani said that “Our robust integrated platform, sound operational processes and business portfolio aligned to the needs of emerging India enabled us to deliver another record performance in challenging market conditions. The refining business has delivered eight consecutive quarters of double-digit GRMs, benefitting from the global demand for transportation fuels and improved product cracks. The company successfully commissioned its first phase of Paraxylene plant during the quarter, further deepening the linkage between our refining and petrochemicals operations. We are executing all our projects, under construction and remain confident on delivering our growth plans. I am also delighted by our country’s eagerness to adopt a digital life as witnessed by the record-breaking launch of Jio. Its comprehensive ecosystems has enabled millions of Indians to lead a richer life through its offerings”. Reliance Industries Ltd reported its financial performance for the quarter nine months ended 31st December, 2016. Highlights of the un-audited financial results as compared to the previous year are:-

Mr Mukesh D. Ambani,Chairman and MD, RIL


April 2017 17

HIGHLIGHTS OF QUARTER’S PERFORMANCE (CONSOLIDATED) Revenue (turnover) increased by 16.1% to

` 84,189 crore ($ 12.4 billion)

PBDIT increased by 3.9% to ` 14,215 crore ($ 2.1 billion)

Profit Before Tax increased by 3.7% to ` 10,213 crore ($ 1.5 billion)

Cash Profit increased by 2.3% to ` 10,586 crore ($ 1.6 billion)

Net Profit increased by 3.6% to ` 7,506 crore ($ 1.1 billion)

HIGHLIGHTS OF QUARTER’S PERFORMANCE (STANDALONE) Revenue (turnover) increased by 9.0% to

` 66,606 crore ($ 9.8 billion)

Exports increased by 4.0% to ` 38,038 crore ($ 5.6 billion)

PBDIT increased by 8.8% to ` 13,629 crore ($ 2.0 billion)

Profit Before Tax increased by 9.2% to ` 10,621 crore ($ 1.6 billion)

Cash Profit increased by 7.6% to ` 10,374 crore ($ 1.5 billion)

Net Profit increased by 10.0% to ` 8,022 crore ($ 1.2 billion)

Gross Refining Margin (GRM) of $ 10.8/bbl for the quarter

CORPORATE HIGHLIGHTS FOR THE QUARTER (3Q FY17)

In November 2016, RIL and GE signed a glob-al partnership agreement in the Industrial IOT (IIOT) space whereby RIL and GE will work together to build out joint applications on GE’s Predix platform

In November 2016, the world’s first Very Large Ethane Carrier (VLEC) “ETHANE CRYSTAL” was received by Reliance. The VLECs will serve to transport Ethane from USA to India, and are the largest vessels ever built for transportation of Ethane at an industrial scale

In December 2016, Reliance Jio Infocomm Lim-ited (RJIL, a subsidiary of RIL), became the world’s fastest growing technology company crossing 50 million subscribers in a record 83 days. RJIL also announced the launch of ‘Jio Happy New Year Offer’

In December 2016, RIL commissioned the first phase of new Paraxylene project at Jamnagar

Result for the quarter / nine months ended 31st December 2016 are in compliance with Ind AS notified by the Ministry of Corporate Affairs. Consequently, result for the quarter ended 31st December 2015, Nine months ended 31st December 2015 and previous year ended 31st March 2016 have been restated to comply with Ind AS to make them comparable.

For the quarter ended 31st December 2016, RIL

achieved a turnover of ̀ 84,189 crore ($ 12.4 billion),

3Q FY 2016-17: Financial Performance Review and Analysis (Consolidated)an increase of 16.1%, as compared to ` 72,513

crore in the corresponding period of the previous

year. Increase in revenue is primarily on account

of increase in prices of refining and petrochemical

products led by 13% increase in Brent crude prices.

Turnover was also boosted by robust growth in retail

business.

Cost of raw materials increased by 24.3% to

` 46,774 crore ($ 6.9 billion) from ` 37,639 crore

on Yo-Y basis primarily on account of increase


in feedstock prices and incremental sourcing of

intermediate products.

Exports from India operations were higher by 4.0%

at ` 38,038 crore ($ 5.6 billion) as against ` 36,564

crore in the corresponding period of the previous

year.

Employee costs were lower by 3.1% at ` 1,894

crore ($ 279 million) as against ` 1,954 crore in

corresponding period of the previous year due to

VRS related expenses in the previous year.

Other expenditure increased by 27.5% to ` 10,257

crore ($ 1.5 billion) as against ` 8,047 crore in

corresponding period of the previous year primarily

due to increase in power and fuel expenses with

new capacity commissioning, and increase in

maintenance expenses on account of planned

shutdown at Dahej and Jamnagar.

Operating profit before other income and

depreciation increased by 2.7% on a Y-o-Y basis to

` 11,552 crore ($ 1.7 billion) from ` 11,248 crore

in the previous year. Operating profit was led by

strong operating performance from petrochemicals

businesses, sustained strength in refining business

and favorable exchange rate movement. This was

partially offset by losses in Oil & Gas business

due to lower volumes and weak domestic price

environment.

Other income was higher at ` 2,736 crore ($ 403

million) as against ` 2,440 crore in corresponding

period of the previous year primarily due to higher

profit on sale of investments partially offset by lower

interest income.

Depreciation (including depletion and amortization)

was ` 2,793 crore ($ 411 million) as compared to

` 2,886 crore in corresponding period of the previous

year.

Interest cost was at ` 1,209 crore ($ 178 million) as

against ` 945 crore in corresponding period of the

previous year, increase is primarily on account of

higher average exchange rate for the quarter.

Profit after tax was higher by 3.6% at ` 7,506

crore ($ 1.1 billion) as against ` 7,245 crore in the

corresponding period of the previous year.

Basic earnings per share (EPS) for the quarter

ended 31st December 2016 was ` 25.4 as against

` 24.6 in the corresponding period of the previous

year.

Outstanding debt as on 31st December 2016 was

` 194,381 crore ($ 28.6 billion) compared to

` 180,388 crore as on 31st March 2016.

Cash and cash equivalents as on 31st December

2016 were at ` 76,339 crore ($ 11.2 billion)

compared to ` 89,966 crore as on 31st March

2016. These were in bank deposits, mutual funds,

CDs and Government Bonds and other marketable

securities.

The capital expenditure for 3Q FY 17 was ` 37,791

crore ($ 5.6 billion). The capital expenditure for

the Nine Month ended 31st December 2016 was

` 81,691 crore ($ 12.0 billion) including exchange

rate difference capitalization. Capital expenditure

was principally on account of ongoing projects in the

petrochemicals and refining business at Jamnagar,

Dahej, Hazira, US Shale gas projects and Digital

services business.

RIL retained its domestic credit ratings of “CRISIL

AAA” from CRISIL and “Ind AAA” from India Rating

and an investment grade rating for its international

debt from Moody’s as Baa2 and BBB+ from S&P.

18 April 2017


% chg. % chg. % chg. 3Q 2Q 3Q w.r.t. w.r.t. 9M 9M w.r.t.(In ` Crore) FY17 FY17 FY16 2Q FY17 3Q FY16 FY17 FY16 9M FY16Segment Revenue 61,693 60,527 57,385 1.9% 7.5% 178,788 186,882 (4.3%)

Segment EBIT 6,194 5,975 6,474 3.7% (4.3%) 18,762 17,154 9.4%

Crude Refined(MMT)* 17.8 18.0 18.0 52.6 51.8

GRM* ($ / bbl) 10.8 10.1 11.5 10.8 10.8

EBIT Margin (%) 10.0% 9.9% 11.3% 10.5% 9.2%

Refining & Marketing Business

(* Standalone RIL)

During 3Q FY17, revenue from the Refining and Marketing segment increased by 7.5% Y-o-Y to ` 61,693 crore ($ 9.1 billion). Segment EBIT was at ` 6,194 crore ($ 912 million), down 4.3% Y-o-Y on account of lower volumes and decline in GRMs. GRM for 3Q FY17 stood at $ 10.8/bbl as against $ 11.5/bbl in 3Q FY16. RIL’s GRM outperformed Singapore complex margins by $ 4.1/bbl. RIL Jamnagar refineries processed 17.8 MMT in 3Q FY17, marginally lower on Q-o-Q. As at the end of the quarter, RIL operated 1,151 petroleum retail outlets in the country.

% chg. % chg. % chg. 3Q 2Q 3Q w.r.t. w.r.t. 9M 9M w.r.t.(In ` Crore) FY17 FY17 FY16 2Q FY17 3Q FY16 FY17 FY16 9M FY16Segment Revenue 22,854 22,422 19,398 1.9% 17.8% 65,994 61,495 7.3%

Segment EBIT 3,301 3,417 2,631 (3.4%) 25.5% 9,524 7,482 27.3%

EBIT Margin (%) 14.4% 15.2% 13.6% 14.4%

Production in India 6.2 6.4 6.4 18.7 18.4 (MMT)

Petrochemicals Business

3Q FY17 revenue from the Petrochemicals segment increased by 17.8% Y-o-Y to ` 22,854 crore ($ 3.4 billion), primarily due to increase in prices across polymers and polyester chain. Petrochemicals segment EBIT increased sharply by 25.5% to ` 3,301 crore ($ 486 million), supported by favorable product deltas and marginal volume growth.

% chg. % chg. % chg. 3Q 2Q 3Q w.r.t. w.r.t. 9M 9M w.r.t.(In ` Crore) FY17 FY17 FY16 2Q FY17 3Q FY16 FY17 FY16 9M FY16Segment Revenue 1,215 1,327 1,762 (8.4%) (31.0%) 3,882 5,880 (34.0%)

Segment EBIT (295) (491) 258 39.9% - (1,098) 3,783 -

EBIT Margin (%) (24.3%) (37.0%) 14.6% (28.3%) 64.3%

Oil and Gas (Exploration & Production) Business

3Q FY17 revenues for the Oil & Gas segment decreased by 31.0% Y-o-Y to ` 1,215 crore. The decline in revenue was led by lower upstream production and lower domestic gas price realization. The unfavorable

April 2017 19


upstream price environment impacted segment EBIT which was at ` (295) crore, as against ` 258 crore in the corresponding period of the previous year. Domestic production (RIL share) was at 23.1 Bcfe, down 24% Y-o-Y. For the accounting quarter, upstream production (RIL Share) in US Shale business was 41.4 Bcfe, down 19% Y-o-Y basis.

% chg. % chg. % chg. 3Q 2Q 3Q w.r.t. w.r.t. 9M 9M w.r.t.(In ` Crore) FY17 FY17 FY16 2Q FY17 3Q FY16 FY17 FY16 9M FY16Segment Revenue 8,688 8,079 5,901 7.5% 47.2% 23,433 15,429 51.9%

Segment EBIT 231 162 149 42.6% 55.0% 541 376 43.9%

EBIT Margin (%) 2.7% 2.0% 2.5% 2.3% 2.4%

Business PBDIT 333 264 237 837 636

Organized Retail

Revenues for 3Q FY17 grew by 47.2% Y-o-Y to ` 8,688 crore from ` 5,901 crore. The increase in turnover was led by growth across all consumption baskets. The business delivered strong PBDIT of ` 333 crore in 3Q FY17 as against ` 237 crore in the corresponding period of the previous year. During the quarter, Reliance Retail added 111 stores across various store concepts. Trends crossed a milestone of 300 stores during the quarter. At the end of the quarter, Reliance Retail operated 3,553 stores across 686 cities with an area of over 13.25 million square feet.

BUSINESS ENvIRONMENT UPDATE

Refining & Marketing BusinessGlobal oil demand grew by 1.4 mb/d during CY 2016 led by strong growth in non-OECD countries. Average utilization rates for refineries globally in 3Q FY17 were 85.0% in North America, 86.3% in Europe and 86.6% in Asia. Utilization levels was seasonally higher in Europe and Asia while North American utilization declined from previous quarter levels.

RIL’s exports of refined products from India was at $ 4.9 billion during the 3Q FY17 as compared to $ 4.8 billion in 3Q FY16. In terms of volume, exports of refined products were 10.6 MMT during 3Q FY17 as compared to 10.9 MMT in 3Q FY16.

During 3Q FY17, the benchmark Singapore complex margin averaged $ 6.7/bbl as compared to $ 5.1/bbl in 2Q FY17 and $ 8.0/bbl in 3Q FY16. On a Q-o-Q basis, margins improved on back of strong fuel oil and gasoline cracks with other product cracks also being higher. Strength in refining margins led by

robust demand growth in the Asia region. Particu-larly oil demand in India in 3Q FY17 grew 7.5% on a Y-o-Y basis.

Singapore gasoil cracks averaged $ 12.1/bbl during 3Q FY17 as against $ 11.0/ bbl in 2Q FY17 and $ 13.8/bbl in 3Q FY16. On a quarterly basis, cracks improved from unsustainable lows reached in the previous quarters. Gasoil cracks were supported by healthy heating fuel demand and higher mainte-nance activity during Oct-Nov’16. Cracks were how-ever capped by higher inventory levels and abun-dant supplies.

Singapore gasoline cracks averaged $ 14.6/bbl during 3Q FY17 as against $ 11.6/bbl in 2Q FY17 and $ 18.7/bbl in 3Q FY16. Gasoline cracks were higher Q-o-Q basis due to strong demand growth from emerging markets and seasonal turnarounds. Demand growth in India was up 11.9% Y-o-Y in 3Q FY17.

Singapore naphtha cracks averaged $ 0.3/bbl in 3Q FY17 as compared to $ (-1.9)/bbl in 2Q FY17 and $ 7.1/bbl in 3Q FY16. On a Q-o-Q basis, cracks moved up due to seasonally higher demand from

20 April 2017


petrochemicals due to favorable economics vis-à-vis LPG. Higher demand for blending in gasolineal-so supported the cracks.

Singapore Fuel oil cracks averaged $ (-2.7/bbl) in 3Q FY17 as compared to $(-5.1/bbl) in 2Q FY17 and $ (-7.3/bbl) in 3Q FY16. Fuel oil cracks were higher Q-o-Q as firm demand from bunker fuels and lower supply from Middle East and Russia led to tighter balances and lower inventory. Fuel oil demand also gained support from electricity generation in Japan and South Korea.

Petrochemicals BusinessOn a Q-o-Q basis, Brent crude oil prices firmed up by 8% and Asian naphtha prices by 17%. Ethylene and propylene prices were lower by 8% and 4% re-spectively.

On a Q-o-Q basis, PP and HDPE prices showed marginal increase of 1% whereas PVC prices in-creased by 12%. PP delta strengthened on account of softness in propylene prices due to ample supply after the restart of cracker units post maintenance shutdown. PE delta softened with a firm naphtha price environment. PVC deltas strengthened amidst increasingly stringent environmental regulations im-pacting coal-based production in China.

Pace of domestic demand growth slowed down due to demonetization of old currency notes during the quarter. However, demand is expected to revive as the effects of demonetisation are absorbed and the economy readjusts to the new normal. In 3Q FY17, domestic polymer demand was higher by 5% Y-o-Y. PE demand witnessed the highest growth rate of 8% among all polymers, driven by a strong pull from the multilayer film, HM pipe, HD raffia and monofilament segments. PP demand was higher by 5% aided by consumption from raffia packaging, fibre filament and appliances sector. PVC demand witnessed a marginal growth rate of 1% due to lower demand on account of seasonality and high agri/rural exposure. RIL’s polymer production was down by 11% mainly due to a planned FCCU turnaround and subsequent PP plant shutdown during the quarter at Jamnagar. RIL continues to maintain its leadership position in the domestic market across all sectors.

ElastomersOn Q-o-Q basis, Butadiene prices increased by 52% driven by strong demand in China and planned and unplanned shutdowns mainly in Asia.

PBR and SBR prices increased by 33% and 28% respectively on the back of higher butadiene and natural rubber prices. However, PBR and SBR del-tas were impacted by much higher increase in buta-diene prices.

Polyester ChainPX prices remained stable Q-o-Q amidst tight sup-ply. Three consecutive contract settlements for Oct, Nov & Dec and an improved crude oil price situation provided stability to PX market. However, delta de-creased by 13% to $350/MT during the quarter on account of firmer naphtha prices.

PTA industry witnessed healthy operational effi-ciencies supported by strong downstream demand and bullish sentiments in futures market. Prices re-mained steady Q-o-Q tracking stable upstream PX prices. PTA – PX delta remained stable at $99/MT in 3Q FY17. Functional PTA units in China were run-ning above 85% in this quarter.

MEG prices during the quarter surged 17% Q-o-Q backed by speculative buying, tight supply and ro-bust demand from the downstream polyester mar-kets. MEG delta over naphtha increased 18% Q-o-Q to $436/MT and is above 5 year average levels.

Polyester market fundamentals improved due to strong demand from end user segments. Fabric trade witnessed 27% rise Q-o-Q. Continued downstream restocking resulted in lower inventories and higher operating rates for polyester producers. Operating rates of polyester fibre & yarn plants in China were in the range of 83-85% during the quarter. Polyester filament yarn prices improved by 8% and staple fi-bre prices gained 3% Q-o-Q respectively. PFY delta continued to remain firm and settled around its 5 year average level. PSF market remained healthy amid low inventory and support from firm cotton prices.

Global PET markets continued to witness seasonal slowdown in beverage consumption in 3Q FY17.

April 2017 21


However, PET prices improved 4% Q-o-Q owing to firm raw materials cost. PET delta remained stable on a Q-o-Q basis at $129/MT.

Demand for polyester fibre and yarn remained sta-ble during 3Q FY17. Polyester filament yarns lifting remained healthy in shirting fabrics & circular kni ting segment during the quarter. PET demand for the quarter surged 34% Y-o-Y on account of active restocking in view of anticipated price rise.

RIL commissioned the 1st phase of the new PX project at Jamnagar, Gujarat. The plant is built with crystallization technology which is highly energy efficient and environment friendly. On commission-ing of the entire PX capacity, RIL will become the world’s second largest PX producer.

Fibre intermediate production in 3Q FY 17 remained stable Y-o-Y to 1.7 MMT while Polyester production output increased 9% to 0.6 MMT.

% chg. % chg. % chg. 3Q 2Q 3Q w.r.t. w.r.t. 9M 9M w.r.t.(In ` Crore) FY17 FY17 FY16 2Q FY17 3Q FY16 FY17 FY16 9M FY16Segment Revenue 623 701 992 (11.1%) (37.2%) 2,107 3,358 (37.3%)

Segment EBIT (125) 24 244 - - (53) 615 -

EBIT Margin (%) (20.1%) 3.4% 24.6% (2.5%) 18.3%

Oil and Gas (Exploration & Production) Business

3Q FY17 revenues for domestic E&P operations was at ` 623 crore. Lower oil and gas price realization

along with lower volumes resulted in fall in revenues. Consequently, EBIT for domestic upstream operations

declined to ` (125) crore.

KG-D6Production and project update:

KG-D6 field produced 0.26 MMBBL of crude oil and 24.4 BCF of natural gas in 3Q FY17, a reduction of

28% and 29% respectively on a Y-o-Y basis. Condensate production in 3Q FY17 was at 0.04 MMBBL. Fall

in oil and gas production was mainly on account of natural decline in the fields. KG-D6 JV completed one

side track at MA field which was put to production in Oct 2016. The second side track is under progress and

is expected to be completed during 4Q FY17.

Panna-Mukta and TaptiProduction and project update:

Panna-Mukta fields produced 1.47 MMBBL of crude oil and 15.6 BCF of natural gas in 3Q FY17, a reduction

of 8% and 7% respectively on Y-o-Y basis. This was due to repair work on 3 well platforms to address asset

integrity issues.

Domestic Operations

22 April 2017


% chg. % chg. % chg. 3Q 2Q 3Q w.r.t. w.r.t. 9M 9M w.r.t.(In ` Crore) CY16 CY16 CY15 2Q CY16 3Q CY15 CY16 CY15 9M CY15Segment Revenue 592 626 771 (5.4%) (23.2%) 1,774 2,522 (29.7%)

Segment EBIT (168) (512) 23 67.2% - (1,034) 3,185 -

EBIT Margin (%) (28.4%) (81.8%) 3.0% (58.3%) 126.3%

Review of US Shale Operations (3Q FY17)The commodity markets showed improving trend during the quarter. Marked sequential improvement in both oil and gas prices, both benchmark prices and realization, led to higher revenues and EBITDA, notwithstanding lower volumes and hedging losses.

WTI prices remained volatile but improved overall on the back of OPEC decision to cut production and subsequent alignment with non-OPEC producers. WTI averaged higher at $49.2/Bbl in 3Q FY17, against $45.0/Bbl in 2Q FY17. Henry Hub (HH) Gas prices improved further during the quarter supported by improved demand from higher gas exports to Mexico and LNG exports as well as subdued production due to lack of incremental take-away capacities in the core Marcellus regions. HH Gas prices averaged 5% higher at $2.99/Mmbtu in 3Q FY17 against $2.85/Mmbtu in 2Q FY17 and $1.95/MMbtu in 1Q FY17. Shale Gas business benefited from improved gas prices, though Marcellus JVs gains were limited during early part of the quarter due to substantial widening of benchmark differentials that led to production curtailments. NGL realization improved substantially, supported by strong domestic demand and improving exports.

Operational trends remained strong across joint ventures (JVs), with improving costs and declining Capex. Overall volume trends remained subdued, reflecting the impact of “zero drilling” strategy pursued to conserve cash flows, natural decline in existing wells and production curtailment in Marcellus JVs towards safeguarding returns in a challenging price environment. Consequently, production was 9% lower sequentially at 37.5 Bcfe in 3Q FY17. Unit realization improved 12% QoQ and supported higher revenue and EBITDA, which reflected

Oil & Gas (US Shale)

Note: 3Q/9M CY16 financials for US Shale are consolidated in 3Q/9M FY17 results as per accounting standards

sequential growth of 3% and 30% respectively. Financial performance remained challenged on a year-on-year basis.

At the quarter-end, producing well count stood at 1,088 as compared to 1,073 wells in 2Q FY17. Gross production rate averaged at 919 Mcfe/day compared to 1,006 Mcfe/day in 2Q. Net sales volume was 9% lower sequentially at 32.7 Bcfe in 3QFY17. Overall capex was nearly flat sequentially at $30 MM in 3Q and was lower by 82% on YoY basis.

Near term outlook for natural gas is positive. Market rebalancing is supported by growing exports to Mexico and LNG and slow growth in supplies. Medium term outlook for oil is positive. Improving demand and OPEC decision to cut production should ease inventory overhang, though potential ramp-up by US independents could pose some risk. Tightening of demand-supply balance is likely during 2H CY2017.

The business is taking a cautious approach to resuming development and focusing on conserving cash and retaining optionality. Thrust remains on preserving long-term value through high-grading of development and land portfolio, well cost reduction, optimization of well spacing and completions for enhanced recoveries.

ORGANIZED RETAILReliance Retail delivered strong performance across the board during the quarter. The demonetization of large denomination notes led to cautious buying by customers for a short period. Strong value proposition, wide product offering and a positive shopping experience helped Reliance gain share in modern trade. Reliance Retail extended support to all its customers, business partners, farmers and

April 2017 23


small suppliers across the value chain during the initial period of demonetization. Overall impact from demonetization has been positive for core retail business with favorable long-term implications for modern trade.

Reliance Fresh and Smart stores grew faster than the modern trade during the demonetization period and its share of trade went up from 26.2% pre demonetization to 27.8% post demonetization (Source: Nielsen).

Reliance Market further extended its wholesale Cash and Carry leadership by launching store at Kurnool during the quarter. Reliance Market now operates 40 stores with over 2.5 million registered member partners.

Reliance Retail operates the largest consumer electronics store chain in India through a network of 1,986 Reliance Digital and Digital Express Mini stores. Reliance Digital saw robust growth across all categories aided by strategic planning, differentiated assortment and an engaging store experience. These stores are supported by robust supply chain and unmatched service capabilities brought by ResQ.

The Fashion and Lifestyle category delivered strong performance in the quarter by offering fashionable, high quality merchandise at great value. During the period, Trends achieved the milestone of operating over 300 stores across 177 cities.

Reliance Retail further strengthened its presence through its partnerships during this period. Reliance Brands signed a Joint Venture agreement with luxury brand Bally, a luxury brand with rich heritage, Swiss quality and a contemporary design ethos.

As part of Reliance Retail 2.0 initiatives, various omni channel initiatives were expanded to offer differentiated experience to the customers. Ajio continues to scale up its operations and has been awarded ‘Silver W3 Award’ for its creative excellence on the web by the Academy of Interactive and Visual Arts and ‘Excellence in Digital Experience’ award in SAP Ace Awards 2016. Ajio has expanded its retail presence to 169 Trends stores.

Reliance Retail’s device distribution business sold 2.8 million LYF devices and accessories during the

quarter. LYF features amongst most attractive mobile phone brands in 2016. Expanding the distribution reach LYF and JioFi devices are now available on Jio.com and Ajio.com in addition to presence across all major e-commerce portals.

Reliance Retail has expanded the network of petro outlets with 18 new outlets opened during the quarter and now operates 413 outlets. There was a tepid growth in sales on a Q-o-Q basis. This was due to demonetization since Reliance petro outlets were not allowed to accept demonetized currency unlike PSU Oil Marketing Company (OMCs) outlets.

Reliance Retail added 111 stores across various store concepts during the quarter. It operated 3,553 stores across 686 cities with an area of over 13.25 million sq.ft as on 31st Dec, 2016.

DIGITAL SERvICESReliance Jio Infocomm Limited (“Jio”), a subsidiary of Reliance Industries Limited (“RIL”), has built a next generation all-IP data network with latest 4G LTE technology. It is the only network built as a Mobile Video Network and providing Voice over LTE technology. It has built a future ready network which can easily deploy 5G and beyond technology in the last leg. Jio has created an eco-system comprising network, devices, applications and content, service experience and affordable tariffs for everyone to live the Jio Digital Life.

Since its commencement of services on 5th September 2016, Jio has become the fastest growing technology company in the world. It crossed 50 million subscribers in just 83 days, adding at an average rate of 6 lakh subscribers per day. This subscriber addition rate is the fastest achieved by any company in the world including the likes of Facebook, WhatsApp and Skype. Jio continues its rapid ramp up of subscriber base and as of 31st December 2016, in less than 4 months from commencement of services, there were 72.4 million subscribers on the network.

This level of growth has been unprecedented on any mobile network anywhere in the world, and is a testimony to the comprehensive digital ecosystem that Jio has created and its promise of enabling millions of Indians to add value to their

24 April 2017


daily lives. Jio continues to transform the industry paradigm by revolutionising the customer journey from on-boarding to usage by offering services and applications which have substantially enhanced customer experience.

During the quarter, Jio announced the launch of the ‘Jio Happy New Year Offer (“JNO”)’ effective from 4th December 2016. Under the JNO, all the Jio subscribers are entitled to certain special benefits, which comprise of Jio’s Data, Voice, Video and the full bouquet of Jio applications and content, absolutely free, up to 31st March 2017. During this offer period, Jio and Jio customers, will be able to continue the journey of co-creating and building the best network experience together. The benefits will be available to all subscribers signing up for Jio services up to 3rd March 2017.

Jio is a customer obsessed organisation. Jio has ramped up the scale of its customer oriented initiatives such as eKYC platform (over 3 lakh outlets), home delivery services (across 600 cities), digital recharge and billing experience etc.

In order to offer completely flawless and world-class user experience to customers, Jio has continued to expand its network, both in terms of coverage as well as capacity. Jio has the widest and most extensive 4G network in India which is being expanded to cover over 90% of population shortly. Jio is the only operator in India to deploy pan-India LTE on a sub-GHz band, in addition to pan-India 1800MHz and 2300MHz spectrum band. According to speed test results available on TRAI MySpeed portal, average download speed on the Jio network at 18.17 Mbps in December 2016 was twice that of any other operator.

Jio continues to face interconnection congestion issues with some of the large operators on account of inadequate provision of points of interconnection (POI) capacities even months after commencement of services by Jio. The POI capacity provided by these operators is still way below requirement and is falling short of the customer addition pace of Jio, resulting in quality of service issues for Indian customers. The resultant call failure rates continue to be of the order of 175 calls failing out of every 1,000 calls from Jio to Airtel network when the QoS regulations mandate that no more than 5 calls out of every 1,000 calls can fail. Indian customers are

still being denied the benefits of superior voice technology on Jio’s state-of-the-art network.

During the quarter, Jio announced a scheme for iPhone users wherein all new iPhone users on Jio’s network would receive one year of complimentary Jio Digital Services as well as convenient and personalised Jio SIM activation experience at doorstep. Jio also announced a strategic partnership with Niantic under which it brought the sought after, first-of-its-kind, Augmented Reality game ‘Pokémon GO’ to India. ‘Pokémon GO’ is the global leading app in the gaming category.

In view of the unprecedented customer response to Jio’s services as well as to address the anticipated growth in demand for digital services, additional investments are proposed to be made into the network to enhance its coverage and capacity. These investments are proposed to be financed largely through an equity offering, to strengthen Jio’s balance sheet for growth. Accordingly, the Board of Directors of the Company has decided to make a rights issue of 6 billion – 9% Non-Cumulative Optionally Convertible Preference Shares (‘OCPS’) of ` 10/- each for cash, at a premium of ` 40 per OCPS, aggregating to ` 30,000 crore.

MEDIA BUSINESSNetwork18 Media & Investments Limited reported consolidated segment revenue of ` 905 crore and Segment EBIT at ` (85) crore. Despite headwinds of subdued advertiser spends in November- December, continued aggressive investments, and high competitive intensity in digital space; Network18’s consolidated topline was flat Y-o-Y. Excluding the impact of new initiatives and one-time expenses, the Segment loss for the quarter is ` 33 crore. During the quarter, the group consolidated its standing by scaling up the new regional channels launched over the last year and gave further impetus to digital content and delivery via its multiple digital destinations. OTT video app VOOT continued to gain traction, and News18.com and Firstpost umbrella brands were expanded into Hindi. The TV home-shopping business is passing through a critical phase, faced with competitive, macro and regulatory challenges. CARE has assigned credit ratings Care AAA to the banking facilities of Network 18.

April 2017 25


tained as the business was able to retain the share of domestic sales despite temporary demand slow-down in textile value chain.

Chemical BusinessDuring the quarter, the demand

for Chlorine was impacted due to lower off take in the user industries resulting in restricted caustic soda production in the industry. Conse-quently, volumes were down by 5 per cent YoY at 1.93 lakh tonnes. ECU realisation was up led by higher caustic soda prices caused by lower supply. The EBITDA of Chemical Business was up by 5 per cent at Rs.186 crore compared to Rs. 177 crore in the last year.

For its brownfield expansion at Vilayat, environmental clearance has been received. The civil work is expected to begin soon.

Cement Subsidiary (UltraTech Cement)UltraTech’s revenue (Net of Excise) stood at Rs. 5,998 crore compared to Rs. 6,093 crore in Q3 last year. EBITDA was Rs. 1,280 crore as against Rs. 1,274 crore in the cor-responding period of the previous year. PAT was up by 5 per cent,

Grasim reports financial results for Q3 FY 2016-17Grasim has reported improved profitability for the quarter ending 31 December 2016. Consolidated revenue for the quarter was Rs. 8,601 crore. EBITDA at Rs. 1,878 crore was up by 7 per cent driven by the performance from VSF and Cement Businesses. Net profit for the quarter increased by 14 per cent to Rs. 728 crore as against Rs. 640 crore in Q3 last year. The consolidated EBITDA for the nine months was up by 23 per cent at Rs. 6,190 crore and net profit rose by 41 per cent to Rs. 2,404 crore on YoY basis.

Q3: EBITDA up 7 per cent; Net Profit up 14 per cent Consolidated Financial Performance

Rs. in crore

Nine Months ended Quarter ended

31.12.2016 31.12.2015 31.12.2016 31.12.2015

26,073 25,033 Revenue 8,601 8,520 (net of excise duty)

6,190 5,015 EBITDA 1,878 1,762

2,404 1,711 Net Profit 728 640

Composite Scheme of Arrangement

The process of seeking the req-uisite regulatory approvals for the composite Scheme of merger of Aditya Birla Nuvo with Grasim and the listing of the Financial Services Business is underway. The scheme has been approved by the relevant stock exchanges and the Competi-tion Commission of India. Applica-tion has been filed with National Company Law Tribunal. The trans-action is expected to be completed by H1 FY18.

Business Performance Viscose Staple Fibre (VSF) The VSF Business reported an en-couraging performance. Its revenue rose by 10 per cent at Rs. 1,762 crore. EBITDA increased by 31 per cent at Rs. 402 crore as against Rs. 308 crore in Q3 last year, led by operating efficiencies and better realisation. Volumes were main-

26 April 2017

Mr Kumar Mangalam BirlaChairman,

Grasim Industries Ltd


from Rs. 566 crore in Q3 FY16 to Rs. 595 crore in Q3FY17.

UltraTech announced the plan for setting up of a 3.5 million TPA in-tegrated cement plant at Dhar, Madhya Pradesh at a total cost of around Rs. 2,600 crore. The plant is expected to commence commer-cial production by Q4FY19.

OutlookThe VSF Business will continue to focus on expanding the VSF mar-ket in India by partnering with the textile value chain, achieving better customer connect through Brand

Liva and enriching the product mix through a larger share of specialty fibre. The company has identified debottlenecking opportunities to meet the growing demand.

The demand for caustic soda in In-dia is expected to grow with the ris-ing demand from the end user in-dustry. The commissioning of new capacities in the industry may in-crease supply in the medium term. The company’s plan to increase its caustic soda capacity by 208K TPA to 1,048K TPA through brown field expansion at Vilayat (Gujarat) and debottlenecking at other plants is

on track.

Continuing government spending on infrastructure, development of smart cities, interest rate cuts sup-ported by interest subsidy schemes for housing will be the key demand drivers for cement. UltraTech will benefit with its presence across the country to meet the expected rise in demand.

Grasim is well poised to reap the benefits of investment in the growth plans of its businesses with the sustained growth in the Indian economy.

The market for UV protective cloth-ing has been growing markedly as skin cancer rates have soared and consumers have become more aware of the dangers of excessive exposure to the sun, ac-cording to a report in the latest issue of Performance Apparel Markets from the global business information company Textiles Intelligence.

Expansion in the market has also been aided by improvements in the function-ality and appearance of UV protective clothing. In the early 2000s the majority of items were heavy and dark and lacked style and comfort. But many items on the market today are fashionable as well as functional, and such garments are avail-able in a wide variety of colours, prints and styles.

In addition, the range of clothing items available has expanded to include athletic wear, casual wear and outdoor sports wear. In the case of athletic wear and outdoor sports wear in particular, UV protective clothing is now being worn for a wide range of activities, including climbing, cycling, fishing, football, golf, hiking, kayaking, sailing, skiing, surfing, swimming and tennis.

Market for UV protective clothing grows as skin cancer rates soarUV protective garments on offer at

the premium end of the market boast a number of performance features in ad-dition to UV protection – including an-timicrobial action, comfort stretch and moisture management. Some of these products are also highly versatile as they can be worn as casual wear, sportswear and even fashion wear.

Reflecting these developments, UV protective garments and accessories are sold by well established clothing brands as well as by sports retailers. Also, a growing number of companies in the outdoor wear industry have incorporated UV protective technologies into their collections of technical clothing.

In Australia – known by many as the skin cancer capital of the world and a leader in the development of UV protec-tive technologies for textiles – UV pro-tective fabrics are employed in a range of technical applications, including high visibility vests and police uniforms, as well as school uniforms.

Looking ahead, there is an opportu-nity for suppliers of UV protective cloth-ing to increase their sales by reaching a wider group of consumers as people live longer and spend more time outdoors.

However, in order to expand the mar-ket beyond an audience which is already well aware of the risks and benefits, campaigns are needed to raise awareness about the harmful risks of exposure to the sun on the one hand and the benefits of UV protective clothing on the other.

To spread the word about the health benefits of protecting against UV rays, companies specialising in the supply of UV protective clothing are working closely with dermatologists, skin cancer foundations and skin cancer specialists.

However, in order to get the message across to the consumer, suppliers must make better use of marketing tools – in-cluding garment hang tags showing the UV protective value of products – in a way which is easily understood by the average clothes shopper.

Furthermore, in order to support such marketing efforts, it would help if legis-lative bodies were to show greater com-mitment to regulating the industry.

If regulations were tighter, consumers might show a greater willingness to pay the relatively high prices commanded by some UV protective garments.

April 2017 27


KARL MAYER, the market leader in the fields of warp knitting, warp preparation and machinery for technical textiles, will celebrate its 80-year anniversary this year. “We will or-ganize various in-house shows for our busi-ness partners, giving them an insight into the future of textile development and production technology. Almost two years after the last ITMA we will show our next innovation steps – responding to the challenges of digitization and conservation of resources,” says Arno Gärtner, KARL MAYER’s CEO.

Like no other company, KARL MAYER represents technical progress and success-ful partnerships. KARL MAYER constantly reinvents. In various locations, KARL MAYER will present its new textile developments cov-ering trends like athleisure, and will show in-troduction of digitization into the textile indus-try value-chain by expanding the application of its new automation platform KAMCOS® 2. Sustainability is another important topic for the future. KARL MAYER will show answers with LEO® (Low Energy Option) and PROS-IZE®, a sizing system that will save up to 20 percent resources in fresh water, size agent and waste water.

During the last two years KARL MAYER invested approximately EUR 40 million into their various worldwide locations: New production facilities at KARL MAYER

ROTAL in Italy

80 Years Karl Mayer - Eight decades of innovation for the textile industrySeries of in-house innovation shows for business partners

A new Development Center for double-bar raschel technology at NIPPON MAYER in Fukui, Japan. It will be opened officially with an in-house show from 1 to 3 March 2017.

At KARL MAYER’s headquarters in Ger-many a new 12,000 square meter as-sembly hall and a new Core Competence Center for Parts and Components. Visi-tors will be able to see this in July 2017. Then KARL MAYER will also set up nine newly developed machines for an in-

house exhibition organized for business partners, plus a separate open day for the public.

Furthermore KARL MAYER (China) will show new developments to their business partners in autumn of this year at their fac-tory in Changzhou, China.

KARL MAYER is looking forward to welcome their guests to the various events.For more information go to www.80yearskarlmayer.com

KARL MAYER is technology and market leader as well as driving force for innovations in textile machinery building. The manufacturer offers perfect solutions for warp knitting, technical textiles and warp preparation for weaving. The success of its international customers is of utmost importance to KARL MAYER. Therefore, it has always been the company’s aim to provide its clients with the best economical and technical products and services and to offer innovations which bring fresh impetus to the textile world.

With more than 2,500 employees worldwide, the international organization produces in its main markets, so that KARL MAYER is always close to its customers and their needs. Today the company has subsidiaries in the USA, in India, Italy, Hong Kong, Japan, China and Switzerland as well as agencies all over the world.

The German family-run enterprise was set up in 1937 and since then financial independence and economic sustainability have always been important aspects of our corporate strategy. As long-standing and reliable partner with many years of professional experience and high quality level in all areas, KARL MAYER supports the competitiveness of its customers and business partners.

28 April 2017


Welspun India Ltd’s Innovative Home Fashions Supplier

April 2017 29

Innovative Home Fashions SupplierWelspun is the leading home fashions supplier in the USA and amongst the top 3 global manufacturers of bed and bath linen. In 28 years, Welspun has grown from a small polyester yarn texturizing unit into a $750 million home textiles supplier with presence in over 32 countries. Welspun is known for developing innovative patented and patent-pending products. We innovate to make our products smarter, our processes more efficient and our environment better. Welspun’s eco-friendly, zero-discharge manufacturing facilities are located in Vapi and Anjar in Gujarat, India. We have a direct-to-consumer business via our UK Christy® brand, with a legacy of over 150 years and our Spaces Home & Beyond®, a decade old brand in India. We employ over 20,000 people globally.

Bath and Bed Linen, Utility and Area Rug AssortmentCotton terry towels and terry products, beach towels, blended towels, bath rugs and mats, bath robes, cotton and blended sheets, comforters, decorative pillows and accessories, mattress pads and down-alternative comforters, accent and area rugs.

An End-to-End Solutions ProviderOur Mumbai corporate headquarters houses sales, merchandising, design and SCM teams providing expertise in merchandising and product planning. Our US Headquarters in NY houses expertise in sales, product design and marketing solutions. Our warehouse in Ohio provides domestic distribution solutions for major retailers and hospitality chains in the US. We also have warehousing and retail operations in the UK and Europe.

State of the Art Manufacturing and DistributionOur owned textile manufacturing facilities are Asia’s largest, completely vertically integrated lines in farm-to-finish production across diverse products. Our strategic warehousing facilities are in key markets-USA, UK, Europe and India — to ensure seamless distribution.

Accreditations & Certifications OEKO-TEX Standard 100 ISO 14001 (Environmental Management System) ISO 9001 (Quality Management System) ISO 17025 (Laboratory Management System

Corporate Social ValueWelspun is committed to socially responsible growth and adding value to the communities in and around our facilities. We are committed to the empowerment of women, education, health and the environment. Our zero discharge manufacturing facilities respect and maintain a delicate ecological balance. We recycle all the water that we use in our processes and practice rainwater harvesting. 85% of the water can be reused and the remaining 15% evaporates. We use the sludge from the recycling process to produce biogas.

Mr B.K. Goenka, Welspun Group


100 Years Peter Dornier – “From human flight to flying threads”

The Dornier company was left with nothing at the end of the Second World War: Destroyed or confis-cated machinery and factories as well being forbidden to be involved in aircraft construction prevented any industrial activities. Claude Dornier was placed under house arrest by the French troops. Despite the difficult times, Peter Dornier proved his skills as entrepreneur: He founded an engineering firm in 1946 and started research on wind power plants. To ease the severe housing shortage and to bring as many “Dornianer” from his father’s company back to work and liveli-hoods, he planned building transportable prefabricat-ed cabins made of aluminum, so-called “Wohnzeuge” (livingcrafts) instead of aircrafts. Due to a shortage of capital, the production was too expensive. Unfortu-

Special Feature

nately his plan failed. Peter Dornier had to discard his idea.

In 1949 Peter Dornier took over the previously oc-cupied factory in Rickenbach, Germany, after it was released. He founded the “Lindauer DORNIER GmbH” in July of the following year; 14 people started work there. A decisive change in the production program resulted from a meeting with the director of the textile company Erba in Wangen, Germany, who asked him to construct shuttle looms for his factory: The start sig-nal for the production of weaving machines that has remained an important mainstay until this day. Already at that time, Peter Dornier designed a completely enclosed weaving loom as can be seen in notes in

He founded the “Lindauer DORNIER GmbH” (LiDO) in 1950 and led the company successfully for several decades. He was not only at home in the world of textile machines but also in the world of aircraft construction – as exceptional design engineer and entrepreneur who was far ahead of his times: Peter Dornier. The second eldest son of aeronautical pioneer Claude Dornier would have been 100 on 31 January.

Ideas, designs, trials – Peter Dornier was born into this world of aircraft construction in Friedrichshafen, Germany on 31 January 1917. Already as a young person, he started creating design drawings which he then kept together with his notes in his sketchbooks. He completed his studies at the Munich Technical University, Germany, in 1944 as graduate engineer. Already during his training his father assigned him tasks at the Dornier Factory in Friedrichshafen-Manzell. It quickly became apparent that his unconventional ideas gave important impulses to aircraft construction. One example as a young engineer was when his father involved him in a project for high-performance aircraft for speed records. Together with chief engineer Eugen Jäger, he developed the concept for the Do 335 which was the fastest propeller aircraft in the world at its time. For this achievement he was 1944 awarded a prize from the Lilienthal Society. Later in the Sixties he also gave decisive impulses for the development and construction of the Do 31, today still the only transport aircraft with jet propulsion as well as vertical take-off and landing capability.

Dipl.-Ing. Peter Dornier31 January 1917 - 28 January 2002

30 April 2017


his sketchbooks. His idea: Air-condition each single weaving loom to save energy as well as to collect and dispose of the dust created that soiled the fabric. The machine housing was designed to reduce the then unbearable noise in the shuttle loom weaving mills. This concept was revolutionary at that time but unfor-tunately too expensive. Such developments first went into series production several decades later.

Already at the start of the Sixties, a time when weav-ing loom production was running at full load, Peter Dornier recognised that a new era was evolving with the introduction of shutteless weaving machines. In a detailed study, also included in the sketchbooks men-tioned, he considered his ideas for a new machine con-cept. He designed a multiple widths weaving machine with the drive positioned in the center between the four cloth widths. Peter Dornier considered using air, water, a rapier or a projectile as possible aid for transporting the filling yarn on such shuttleless weaving machine. However he decided not to realise this complex concept but to build a rapier weaving machine instead which took off successfully at the end of the Sixties. Peter Dornier had created an extremely flexible weaving ma-chine where the solid construction allowed producing, above all, technical fabrics and therefore opened up the imperative structural transformation of the textile industry towards technical textiles.

Peter Dornier’s ability to listen to people, to gather ideas and develop opportunities for new markets led also to the founding of a second business division of the Lindauer DORNIER GmbH, the specialty machin-ery construction.

In 1950 Peter Dornier got to know Hans Haubold.

The latter had produced textile finishing machines in Chemnitz, Germany, before the war. They soon agreed that DORNIER should construct these machines under license. The high quality and economic efficiency of the DORNIER textile dryer was soon well-known. Other manufacturers outside of textile finishing also gained interest in the drying plants. The transfer from cello-phane to oil-based packaging films that occurred five years later led to large chemical companies searching for a suitable technology. Peter Dornier, together with his employees from the textile dryers, was successful in developing those into film stretching lines, which are now the second, important mainstay of the Lindauer DORNIER GmbH.

At about the same time, the Dornier GmbH was founded again in Friedrichshafen, Germany, and the Lindauer DORNIER GmbH integrated in the corporate group. Aircraft engineering restarted and Peter Dornier was significantly involved in various developments.

As requested by his father in the beginning of the year 1961, he dedicated his full attention to the Lindauer DORNIER GmbH. The intensity of develop-ments in weaving and specialty machinery engineer-ing increased and the company continuously grew.

In 1985, it was planned that the Dornier-Group, to which also Lindauer DORNIER GmbH belonged, should be sold to themMercedes-Benz AG. Peter Dornier agreed to the sale but only on the premise that all shares in the LiDO will be transferred to him.

A stroke of luck for the company! Peter Dornier in-vested large amounts in renewing the machinery and production facilities. At the same time, he intensified the development and created one of the most modern tex-tile machine factories. All this secured the positive de-velopment of the Lindauer DORNIER GmbH and was the basis for the growth to the present size. Presently the family-owned company produces with approximate-ly 1,000 employees weaving and specialty machines exclusively at two production sites in Germany.

In honouring his services, Peter Dornier received many awards and honors. He set his own finest me-morial when he created the Peter Dornier Foundation in 1985 which receives every year 10 percent of the operative profit of the Lindauer DORNIER GmbH.

“By means of this foundation he wanted to give back to the community some of the material values he ac-

Aerial View of Lindauer DORNIER GmbH

April 2017 31


crued together with his employees” said Maja Dornier who became Chairwoman of the foundation after her husband’s death on 28 January 2002 and has contin-ued to guide it since then according to his principles.

From the very beginning of his entrepreneurial ca-reer, Peter Dornier trusted the abilities of his employ-ees and promoted their talents – irrespective of their cultural background. As a prime example, two decisive weaving machine developments, the concept of the

DORNIER rapier and air-jet weaving machines, were based on the ideas of a Greek, Nikolaus Kokkinis, and a Syrian, Dr. Adnan Wahhoud.

Peter Dornier would have been 100 years old on 31 January 2017.

Contact:Lindauer DORNIER GmbHCentral Marketing und CommunicationFon: +49 8382 703-1376

Professor Claude Dornier 1910 started to work for Count Zeppelin and was the first to develop all-metal (1884 - 1969) airplanes and seaplanes

1922 maiden flight of the legendary “Dornier Wal” (Dornier whale), the most successful seaplane of the nineteen-twenties and thirties1931 sensational and spectacular expedition to Africa, North and South America with the 12-engined Do X, the biggest airliner of the world at that time

Peter Dornier 1940 Peter Dornier starts his studies for aeronautical engineering at the (1917 - 2002) Technical University Munich the same time his father assigns the first tasks to him at the Dornier works in Friedrichshafen-Manzell 1944 final degree as Chartered Engineer, the second eldest son of Professor Claude

Dornier starts to work as an aeroplane engineer at his father’s company. He is significantly involved in the build-up of the German aircraft industry after World War II.

1944 he receives the price of the „Lilienthal-Gesellschaft“ for the invention and development of the propeller-driven airplane Do 335

1950 foundation of Lindauer DORNIER GmbH 1960 Do 31, vertically take off and landing (VTOL) jet aircraft 1985 through the majority shareholding by the Daimler-Benz AG at Dornier GmbH

Friedrichshafen all shares at Lindauer DORNIER GmbH are taken overPeter D. Dornier 1989 entry to his father’s company(1961) 1991 spokesman of the board and responsible for the sales, marketing and development division “weaving machine” 2001 head of the management in third generationDornier/Dornier-Gruppe 1985 headquartered in Friedrichshafen exists till the sale to Daimler-Benz AGLindauer DORNIER GmbH 1950 foundation of Lindauer DORNIER GmbH within the Dornier group(LiDO) 1962 international trade mark application “DORNIER” by Lindauer DORNIER GmbH Registration number: 766937/27.06.1962 1985 taking over of all LiDO shares by Peter Dornier’s family (with transition of all

trademark rights to the Daimler-Benz AG it’s no longer allowed to sign with the firm name Dornier/Dornier group)

From this moment on only the following spelling in capital letters for the Lindauer DORNIER GmbH is valid worldwide: “DORNIER”/“Lindauer DORNIER GmbH”, like:Lindauer DORNIER GmbHRickenbacher Str. 11988131 LindauDORNIERCompany name in combination with the product e.g. DORNIER weaving machineIn combination with the Dornier family “Dornier” is always written in small letters.

32 April 2017


April 2017 33

Progress in China’s textile in-dustry is increasingly being driven by a young and dynamic genera-tion of professionals – and USTER is proud to play arole in fostering the development of these talented individuals. The company’s close links with Chinese universities started 10 years ago, and in that period USTER has developed a scholarship program which now covers eight universities and has so far involved well over 500 stu-dents.

Richard Furter, USTER’s former Head of Textile Technology, started the scholarship initiative and was personally involved in develop-ing the program through its early years. At that time, he was assisted by Ellen Liu, Head of Textile Tech-nology in China, who translated. She remembers that students in the program were immediately im-pressed by the concept of quality control and management and the potentiality offered by quality test-

ing and monitoring instruments.

Today, the company is still con-vinced that the USTER scholarship program will encourage successive generations of students to continue the transformation of China’s tex-tile industry from a traditional sec-tor to a modern global player in quality markets. USTER believes it’s important to lay the foundations for this at the textile universities, so that students are introduced to new ideas and become inspired by the possibilities.

Internships for practical experience

Since 2010, USTER has also been offering internships at its laboratory in Suzhou, in collabora-tion with Donghua University. Each year, two masters degree students are able to gain experience as test-ing engineers, working with USTER staff – as well as having access to latest test technology to help with their theses. The internships allo-cate students’ time 50:50 between work in the lab and individual study, all supported by regular training

The Uster Group is the leading high-technology instrument manufacturer of products for quality measurement and certification for the textile industry. The Group provides testing and monitoring instruments, systems and services that allow optimization of quality through each individual stage of textile production. This includes raw textile fibers, such as cotton or wool, all staple fiber and filament yarns, as well as downstream services to the final finished fabric. The Uster Group provides benchmarks that are a basis for the trading of textile products at assured levels of quality across global markets. The Group’s aim is to forward know-how on quality, productivity and cost to the textile industry.

The Group is headquartered in Uster, Switzerland and operates through a worldwide Market Organization complemented by Technology Centers. It has sales and service subsidiaries in the major textile markets and Technology Centers in Uster (Switzerland), Knoxville (USA) and Suzhou (China). www.uster.com

USTER fosters new talent in 10 years of university programsThe young leaders driving China’s textile industry


from USTER Textile Technologists.

Ms Liu also continues the popu-lar and valuable program of univer-sity lectures started in 2007 by the late and highly-respected USTER expert Richard Furter and con-tinued by Thomas Nasiou, today CEO of Uster Technologies. Both these men spent time lecturing students at Donghua and Qingdao universities. Mr Furter initiated the lecture program based on his per-sonal strong belief that the young professionals will drivethe Chinese textile industry into a well-devel-oped, modern business. He put a lot of effort in fostering the future generation. Through a career with USTER spanning 47 years, he was renowned for his seemingly limitless knowledge. He was even asked to write an independent textbook, titled ‘Textile Measuring Technology and Quality Control’ which was officially acknowledged by China’s textile education au-thorities and has been a ‘set book’ for textile students since 2012.

Scholarships at eight universities

The first USTER scholarships at Donghua University and Qingdao University started in 2008. Since then, the program has expanded to include six more establishments which regard the company as a partner in fulfilling their educational goals: Tianjin Polytechnic Univer-sity, Xi’an Polytechnic University, Jiangnan University, Zhongyuan University of Technology, Nantong University, and Yancheng Insti-tute of Technology. They appre-

ciate the specific technical focus of the lectures on quality man-agement and control, as well as USTER®STATISTICS.

So far, 563 students at differ-ent levels (undergraduate, mas-ters and PHD) have been awarded USTER scholarships. Successful students must demonstrate high performance – in marks and en-gagement – but also involvement in research and university projects, along with well-developed personal and interactive skills.

Over the years, many USTER scholarship winners have gone on to work in key textile industry posts, or as university professors them-selves. “My company employed me as testing engineer when I gradu-ated just because I had learned USTER® instrument knowledge during my internship. I can say that USTER knowledge helped me to gain this career opportunity,” says GuangZhen Guo, who works as a supervisor in CFIB branch in Fujian province. He studied at Donghua University and had the chance to take part in a year-long USTER in-ternship program. Professor Yong Liu was, as a PhD student, a winner of one of the first USTER scholar-ships in 2008. Today he holds the positions of vice-dean of the textile college of Tianjin Polytechnic Uni-versity and doctorial supervisor. He says: “I was inspired to devote my-self to the textile industry and con-tribute to the development of textile talents as well as to scientific and technological progress.” This reac-tion is typical of the majority of stu-

dents, who report that their schol-arship gave them the confidence to remain in the textile sector and the encouragement to anticipate and movechanges in China.

Belief in the future of textiles

USTER is convinced that younger staff members are the key to implementing sustainable and successful quality management concepts in the spinning industry. The university environment intro-duces students to modern methods and attitudes in the textile indus-try, opening their minds and giv-ing them the courage to challenge strong traditions. “There is a trend now for yarn producers to realize how textile engineers can help to improve the competitive capabili-ties of their spinning mills. They seek employees with university degrees and offer higher salaries,” says Ms Liu. “Some companies will even promise quick promotion to ensure that young professionals stay in the job for years.”

The Chinese government has it-self recognized the potential bene-fits of increased quality standards, and launched new initiatives to promote a high quality and brand oriented policy for manufacturing industries in 2016. Students who are ready to embrace quality man-agement concepts will provide a good foundation for this campaign. And Uster Technologies is pleased to take part in the modern devel-opment of China’s textile industry through its continuing commitment to supporting the future textile pro-fessionals with its scholarship and internship programs.

34 April 2017


The USTERIZED® brand cre-ates a global circle of excellence for spinning mills, certifying the top-level standards of quality management. Started in 1967 and expanded 10 years ago, the program requires spinners to meet stringent techni-cal specifications and implement efficient processes for quality yarn production. Today, there are 68 US-TERIZED® certified spinning mills worldwide (www.uster.com/uster-ized), 21 of which have held the ac-creditation for 10 years or more.

During 2016, nine more spinning mills successfully passed the audit process and earned the USTER-IZED® certificate. Each candidate for membership has to undergo a detailed and extensive examination of its quality management systems. Comprehensive preparation is need-ed before starting an USTERIZED® application. USTER provides support to the spinning mills throughout, with training courses and visits from spe-cialiststo supportthe mill, ahead of the USTERIZED® certification audit.

To carry out the audit, experi-enced textile experts assessthe mills’ quality management systems. They will recommend improvements in quality processes and consistency and guide spinners towards ongoing analysis routines. Customer feed-back is that these audit procedures are a valuable service in themselves, providing deep insights into quality management and overall mill man-agement needs.

Market demand raises the barRecent trends confirm a growing

demand for higher quality and at the same time consistent quality yarn

from downstream users in the textile chain. The USTERIZED® quality seal supports this by assuringthat certified spinners are capable of meeting this requirement on a continuous basis. The bar is being raised – and the cri-teria for USTERIZED® membership are progressing accordingly.

A key aspect is the maintenance of consistent environmental condi-tions in the spinning mill laboratory, to ensure reliable measurement of quality values with USTER® instru-ments for testing fiber and yarns.

USTERIZED® candidates must also focus on important details such as a regularsampling plan and the use of yarn quality profiles, as part of the quality management process. To demonstrate suitable customer-ori-ented systems, spinners will need to work with yarn quality profiles for se-lected articles, as well as produce test reports using USTER®STATISTICS percentile values for their standard yarns.

The USTERIZED® certificate must be renewed regularly. But,

unlike some other programs, this requires mills to do more than sim-ply prove again their original qual-ity management standards. At each subsequent audit, USTERIZED® spinners need to show evidence of continuous improvements – which also includes updated testing and monitoring technology.

Indian customers top the USTERIZED® count

The value that spinners place on their USTERIZED® recognition is underlined by the efforts made by so many to pass the regular audits – in some cases for 10 years and lon-ger. The count of long-term and new members at the end of 2016 showed that India now has the largest num-ber of USTERIZED® spinners. Other strong USTERIZED® markets are in China, Turkey, Indonesia and Paki-stan. These spinners, and others worldwide, have earned the right for their yarn to carry the USTERIZED® brand label – for instant recognition of quality consistency in trading and deliveries to fabric producers.

USTERIZED®– the symbol of excellence in spinningThe USTER quality seal is a hard-won but valuable business asset

April 2017 35


Changing Dynamics of Global Apparel TrendsIntroduction:

The global apparel and fashion trade is expected to grow to USD1 trillion by 2020. However with growth slowing down in developed markets, the dynamics of the global fashion market are expected to change dramatically. Emerging economies will fuel most of the growth in the fashion market. Brazil, Russian, India & China (BRIC) along with few other South-East Asian countries are seen as the major growth drivers.

In addition to this, global apparel markets in the recent past have shown a paradigm shift, moving towards increased product differentiation, and catering to a diverse, aware, and demanding customer base. Retailers have thus gravitated to-ward demographic shifts, societal influ-ences, economic influence, and environ-mental concerns.

With growth in developed economics cooling, retailers are facing pressure due to restricted consumer spending. Under such conditions the global apparel value chain has shown a distinct shift both at the front- and supply-end.

Pressure on Retailers due to restricted customer spending:

Reduced consumer spend has put tre-mendous pressure on retailers, who are now looking at models along the lines of Zara in the EU and Macy’s in the US to increase their offerings to the consumer. While on one hand big retailers in the US like JC Penney and Gap are redefin-ing their market position by either moving into speciality stores or by creating a com-pletely new shopping experience for the consumer, others are looking at promoting e-sales as much as possible. There is also an increased focus on retaining customers with policies such as loyalty programs etc. Shoppers today are more segmented by demographics, lifestyles, and cultures.

Retailers seek entry into global markets:

Apart from their own domestic markets, retailers are increasingly looking for busi-ness opportunities in global markets. With the apparel market in the US and EU get-ting saturated, a paradigm shift is seen in the markets of Asia and South America. The BRIC countries with their positive GDPs have been attracting global retailers. Most large retailers have been working out of China where they have access to a large young population with a significant capac-ity to spend. The large geography of China also allows an opportunity to upscale oper-ations. India has had its regulatory issues and a high cost of operations primarily due to expensive real estate. Even these have not deterred retailers to look at India as an interesting option. However, India is yet to see the same influx as China has seen over the last 5 to 6 years.

Fast fashion and customization to gain control over supply chain:

Today, consumers prefer to buy ap-parel that matches their status and life-style, and also suits their needs and as-pirations. Most retailers would like to offer a complete range of products from higher to mid-market segment. Affordable fashion has almost become the key to improving

sales. Customizing products to the needs of the consumer offers a high potential of improving business bottomlines. Bespoke services have seen a significantly large in-crease over the last 3 to 4 years and con-tinue to show positive trends. Supply chain systems are also altered and reconfigured to reflect the changing desires and require-ments of the customers.

Retailers are exerting more efforts to curtail excess manufacturing expenses by maintaining a balance between demand and supply. Retailers such as Zara and H&M have successfully developed supply chains that facilitate quicker responses for fashion merchandise. Almost all retailers will continue to look at lower order quanti-ties per style and reducing lead times as much as possible. Thus the typical nsourc-ing time of 90 days could shrink to 75 days and, from 60 days, could drop to 45 days or even less in future.

Also, when cotton prices went up retail-ers changed their product mix from cotton to synthetics, offering similar styles in low-cost alternatives. These will continue to be explored to ensure a wider choice for the consumer.

Adapting to next-generation technology:

Many retailers are increasingly deploy-ing interesting technologies to tap various

36 April 2017


ing up the industrial chain by fostering manufacturing that requires greater skills, better technology and more investment in advanced equipment. Such rapidly-evolving segments in China include Infor-mation Technology, automobiles, trains, aerospace, medical equipment and tele-communications gear. Low-cost countries such as Bangladesh have emerged as the largest gainer in the lower-value assembly segments of the value chain. At the same time, countries such as Sri Lanka, Turkey and even India are upgrading to higher-value segments, such as branding and de-sign, which rely on higher-quality human capital to maintain their competitiveness. As a result, workforce skills will become in-creasingly important elements for develop-ing countries to maintain and upgrade their position in the global apparel value chain. Some of the African countries and maybe Myanmar have the potential of increasing capacities of apparel manufacturing.

The ‘Global Apparel Manufacturing’ re-port from IBISWorld (1) forecasts a contin-uation of the trend of Chinese firms setting up their own brand-names and opening stores in foreign markets. The report also says that, given the competitive strength of China, the success of other low-cost

source countries depends on their ability to develop an advantage in single-product categories. Further producers in Europe and the US, should see a rise in niche ex-ports to India and China, driven by increas-ing demand for high-quality apparel from their growing affluent and middle classes. Manufacturing firms in the US and Europe may also find new opportunities to build their businesses by developing high-end products like tailored women’s suits and jackets, according to the report.

As regards current importing trends, key retailers have focused on product specific approach while defining sourcing strategies. Exhibit 2gives a current prior-ity on the product-wise preferred sourcing destinations. In the past decade, China surged above all competition in terms of exporting more apparel products than any other country in the world. However, in the last year or so, China (South) has lost its competitiveness because of increased wages, labour unavailability, and changes in Chinese government policy. On one hand this has created concerns for global retailers, who were heavily dependent on sourcing from China (South). On the other hand, this has increased potential of extra business to countries like Bangladesh, In-dia, Indonesia, and Vietnam.

Location Product Categories Average Order Quantities

India High Value-Added Women’s Low-Medium (Around 5,000-10,000 Tops – Knits and Wovens Pieces per Order)

Indonesia High-value needle work, Medium (Around 8,000-10,000 Pieces Dress Shirts, Outerwear per Order)

Bangladesh Woven Bottoms and Basic High (More than 25,000 Pieces per Knits Order)

Vietnam Woven and Knits Medium (Around 8,000-10,000 Pieces per Order)

Cambodia Knits (Tops and Bottoms) Medium (Around 8,000-10,000 Pieces per Order)

(1) Global Apparel Manufacturing Market Research Report | Oct 2011

Authored By: Amit Gugnani - Senior Vice President, Fashion(Textile & Apparel)

channels for selling merchandise.Electronic shelf labelling, digital pro-

motional displays, self-checkout and sales kiosks are being adapted by retailers to relate to their customers.

Further, on line marketing through so-cial networking websites is another oppor-tunity that retailers are exploring.

Increased focus on Sustainability:

Material trends favour going green. Apparel industry is turning greener these days with sustainable trends evolving into a major influence on the industry. Pressure is mounting on the apparel manufacturing sector to reduce the environmental impact of cultivating, processing, dyeing, bleach-ing, and making fabrics., thus pushing retailers towards a sustainable approach. Also retailers are expected to eliminate existing labour inequalities and exploita-tion, and have a fashion-forward approach towards the manufacturing process. Fibres from wood pulp, bamboo etc. will tend to gain higher importance.

Emerging Economies developing as Low-Cost Manufacturing Hubs

China enjoyed a dominant position in apparel and household textiles manu-facturing for several years, as makers of these items located in developed nations such as the U.S. and Canada suffered a long period of decline. However, recent increases in the value of the Chinese cur-rency, combined with rapidly rising labour costs, have put Chinese manufacturers in a much less competitive position. Competi-tion from low-cost nations like Bangladesh, as well as Vietnam, Sri Lanka, Indonesia, Cambodia, India, Pakistan and elsewhere is intense, and a large portion of apparel manufacturing formerly done in China is moving to these areas at a rapid pace. While China continues to have a robust apparel manufacturing industry, it is mov-

April 2017 37


Opportunities for Export of MMF Textiles to Kenya and Ethiopia

originally was meant for the trou-bled Great Lakes region but some-how ended up in the local market retailing at very low prices. This led to the collapse of the local tex-tile industry in the early 1990s.

Since the liberalization of the economy in 1990, the influx of tex-tile goods into Kenya also became a major problem that reduced the average capacity utilization in the textile mills to about 50%. The textile sector was actually once the fifth largest foreign exchange earner in Kenya, but dropped to a very small contribution of the Gross Domestic Product (GDP) from mid and late 90s. However, data available for the last 5 years indicates that the sector is on its way to recovery largely due to AGOA and increased Government support. The enormous market prospects presented by the Afri-can Growth and Opportunity Act (AGOA) of 2000 and the African, Caribbean and Pacific – European Union (ACP-EU) Cotonou Agree-ment have rekindled interest in the industry. Indeed, since Kenya qualified for AGOA, its exports to the US have expanded remark-ably and so has investment in this sector. Kenya’s textile exports to the US increased from US$ 39.5

million in 1999 to US$ 277 million in 2004.

Existing textile and apparel firms in the country produce a large variety of products. Spin-ning firms produce yarn (includ-ing industrial) and sewing thread while integrated mills produce a wide variety of products including yarn, fabrics (knitted and woven), canvas, school and travelling bags, blankets, sweaters, shawls, uniforms, towels, baby nappies and knitted garments of mostly cotton.

Structure of the Textile Sector

Kenya has 52 textile mills, of which only 15 are currently op-erational and they operate at less than 45 percent of total capacity. The existing mills operate using outdated technology and suffer from low levels of skilled labour and low productivity. The cost of electricity is a major cost driver for textile mills, as are the high maintenance and overhead costs due to old equipment. A further cost driver is the need to either use high-cost imported material or low-quality local fibre which re-quires additional processing.

Kenya and Ethiopia the two potential and untapped markets for Synthetic and Blended textiles from IndiaKEnya aT a GlancEPopulation 46.05 million 2015GDP (US$) 63.40 billion 2015GDP growth 5.6% 2015Inflation 6.6% 2015GNI per Capita (US$) 1,340 2015

IntroductionKenya is one of the major Cot-

ton growing countries in the Af-rican region. Cotton production offers the greatest potential for increased employment, poverty reduction, rural development and income generation in the country. The sub-sector has been identi-fied as one that could help bring rapid economic development and reduce poverty in the country. It has therefore been classified as a core industry by the Kenyan gov-ernment.

In the early 80’s the textile in-dustry was the leading manufac-turing activity in Kenya, both in terms of size and employment. The industry was employing over 200,000 farming households and about 30% of the labour force in the national manufacturing sector. However the sub-sector started declining in the mid-1980s. There was the dumping of used clothes locally known as “mitumba” which

38 April 2017


Major inputs include cotton fi-ber (both local and from Uganda/Tanania); man-made fiber & dyes which are mostly imported; utili-ties such as water, electricity and fuel; machinery; and skilled la-bour.

The yarn spinning compa-nies have a capacity of 140,000 spindles in total, with only 40-45 percent currently being utilized. There are few stand-alone yarn spinning mills which produce cot-ton yarns, blended yarn, as well

as polyester, acrylic and sewing threads. Yarn output is sold within Kenya and exported to Uganda, Rwanda, Tanzania, and Nigeria. Only 15 of the 52 yarn mills are operational.

There are some semi integrat-ed mills, which cover the entire production value chain from spin-ning to knitting, dyeing, and fin-ishing. Two semi-integrated mills are oriented to knitting and four to weaving. Stand-alone knitting and weaving companies import

yarns from India, Indonesia, Chi-na and Taiwan but also are in the weaving, knitting, and finishing business see a capacity utilization of 40-45 percent.

The average share of Indian manmade fibre and blended tex-tiles in Kenya’s imports is over 10%. However, significant level of negative growth in exports has been witnessed in recent period, especially on exports of manmade filaments and manmade staple fibres with a negative growth of

Import of textile and apparel products from India in 2015chp. Product Description Kenya’s imports from India Kenya’s imports from world

Value annual growth Share in Equivalent Value annual Share in us$ in value Kenya’s ad valorem in 2015, growth in worlds 000 between2011- imports, tariffapplied US$000 invalue imports, 2015 %, p.a. % by faced to between %, p.a. Kenya 2011-2015, %

50 Silk 19 -31 42 25 45 -43 Negligible

51 Wool, fine or coarse animal hair; 1 -77 Negligible 12 613 7 Do horsehair yarn and woven fabric

52 Cotton 6,426 -4 4 17 144,553 8 Do

53 Other vegetable textile fibres; paper 991 4 6 18 17,543 32 Do yarn and woven fabrics of paper yarn

54 Man-made filaments; strip and the 17,632 -5 10 20 180,036 7 Do like of man-made textile materials

55 Man-made staple fibres 30,374 -3 20 14 155,655 6 Do

56 Wadding, felt and nonwovens; 4,130 25 2 17 198,883 92 1 special yarns; twine, cordage, ropes and cables and articles thereof

57 Carpets and other textile floor 3,660 72 22 25 16,326 24 Do coverings

58 Special woven fabrics; tufted textile 824 28 5 25 15,969 7 Do fabrics; lace; tapestries; trimmings; embroidery

59 Impregnated, coated, covered or 4,040 14 15 10 26,768 Negligible Do laminated textile fabrics; textile articles of a kind suitable…

60 Knitted or crocheted fabrics 1,027 46 1 25 95,704 7 Do

61 Articles of apparel and clothing 3,943 16 1 25 405,635 49 Do accessories, knitted or crocheted

62 Articles of apparel and clothing 8,625 1 2 25 460,727 72 Do accessories, not knitted or crocheted

63 Other made-up textile articles; sets; 21,210 8 7 28 304,151 9 1 worn clothing and worn textile articles; rags

Total 102,902 2,022,608

April 2017 39


are small and micro companies. Twenty-one companies operate in the EPZ, employing an aver-age of 1,800 people per com-pany. While the cost structure of apparel companies varies signifi-cantly by firm size, for the larger companies, the high cost of im-ported material (which is a fixed cost due to the absence of export quality fabric in Kenya) contrib-utes to the majority of the manu-facturing cost (approximately 64 percent). Overheads also account for a significant portion of costs, at 21 percent. The only aspects of production where cost and quality can be managed to improve com-petitiveness are labour, electricity, and overheads.

Approximately 70 percent of Kenyan apparel firms have a US-dominant market orientation, meaning that at least 80 percent of their output is sold to US mar-kets as indicated in Figure. Since the majority of Kenyan apparel firms have a US-dominant mar-ket orientation, exports to the US serve as a proxy for overall trends in Kenyan apparel exports.

Product wise, six of Kenya’s top ten exports are cotton products, while four are man-made fibre products. Almost half of Kenya’s apparel exports to the US are comprised of women’s and girls’ (W/G) cotton trousers, slacks, and shorts, and W/G man-made fibre (MMF) slacks, breeches, shorts, knit shirts, and blouses.

There are no standalone dye-ing and finishing plants and ser-vices; this part of the production

value chain is deeply integrated with textile mills. The Design and sewing segment consists of non EPZ firms (small/micro as well as medium and large apparel com-panies) and firms inside the EPZs, which are divided into foreign in-vestment firms, accessory produc-ers, and local micro firms located in the Export Business Accelerator (EBA). These firms work at 100 percent capacity utilization, and around 93 percent of their fabric supply is imported from China, Hong Kong, Taiwan, India, and Pakistan, as are the trims, ma-chinery, and spare parts utilized in apparel production. There are significantly more apparel com-panies than textile manufactur-ers – 170 medium and large com-panies, 74,576 small and micro companies, 22 foreign firms, and 9 accessory producers.

Almost all of textile products manufactured in EPZ are export-ed, mostly to the U.S. Around 15 companies outside the EPZ export globally. The rest supply to the local market with products for lo-cal hotels, conference materials, home décor, and tourism. The lo-cal market is also supplied by fin-ished products from the second hand (mitumba) market and from smuggled goods. Exported appar-el are retailed through mass mer-chandise chains, factory outlets, and mall orders, which then filter to department stores or specialty boutiques.

Economic OverviewThe World Bank’s most recent

Kenya Economic Update (KEU)

5% and 3% respectively in Ke-nya’s import of these textiles from India whereas Kenya’s global im-port of these textiles are increas-ing. Therefore, continued efforts should be on to penetrate this market more and sustain exports of Indian manmade fibre textiles to the Kenyan market. Moreover, the main available fibre in Kenya is cotton not the manmade fibres. But, when it comes to use of out-fits by mass population in Kenya, these are mostly made of syn-thetic fibres which is the most af-fordable and easy to maintain. To compensate this growing demand from the masses, this country mostly depends of imports of the manmade and blended textiles.

Leading countries supplying Syn-thetic textiles to Kenya in 2015

Rank country1 China2 India3 Singapore4 Korea, Republic of5 Indonesia6 Japan7 Thailand8 Taipei, Chinese9 Egypt10 South Africa

Source: UN Comtrade

Structure of the apparel Sector

Thousands of apparel com-panies operate in Kenya. Ap-proximately 170 are medium and large, while upwards of 74,000

40 April 2017


uniforms for national and foreign/export markets.

Ethiopia is also a largely cot-ton growing country. Large-scale cotton production is carried out under irrigation, mainly in the Awash Valley, which has more than 50,000 hectares under cul-tivation. Another 45,000 hectares of high-quality cotton is cultivat-ed by small-scale farmers. There still exists huge potential for the expansion of cotton cultivation in Ethiopia, especially in the Omo-Gibe, Wabi Shebelle, Baro Akobo, Blue Nile and Tekeze River basins. The production of cotton is well integrated into the textile sector, with garment factories relying heavily on domestically produced cotton.

The Ethiopian cotton, textile and garment sector is one of the key manufacturing industries pri-oritized by the government and expected to substantially boost performance in the second Growth and Transformation Plan (GTP). Hence, according to recent infor-mation, it is expected to generate about a billion USD by the end of GTP II period. Hence, the govern-ment is aggressively working to streamline, improve, support and expand the textile industry both in the domestic and foreign mar-kets so as to emerge competitive at the international markets. It is also highly engaged in industrial parks construction in the different parts of the country.

is useful. Also useful is to know how it ranks relative to compara-tor economies and relative to the regional average. The economy’s rankings and distance to frontier scores) on the topics included in the ease of doing business rank-ing provide another perspective.

Kenya has the potential to be one of Africa’s great success stories from its growing youth-ful population, a dynamic private sector, a new constitution, and its pivotal role in East Africa. Ad-dressing challenges of poverty, in-equality, governance, low invest-ment and low firm productivity to achieve rapid, sustained growth rates that will transform lives of ordinary citizens, will be a major goal for Kenya.

Ethiopia at a GlancePopulation 99.39 million 2015

GDP (US$) $61.54 billion 2015

GDP growth 9.6% 2015

Inflation 10.1% 2015

GNI Per Capita (US$) 590 2015

IntroductionEthiopia’s long history in tex-

tiles began in 1939 when, under Italian occupation, the first gar-ment factory was established. The country’s current textiles industry encompasses spinning, weaving and processing. Ethiopia has five public textile factories producing mostly work-wear garments for the domestic market. Numerous privately-owned factories produce shirts, suits, work clothes and

March 2016 projected a 5.9% growth in 2016, rising to 6% in 2017. The report attributed the positive outlook to low oil pric-es, good agriculture performance, supportive monetary policy, and ongoing infrastructure invest-ments.

According to the latest Ke-nya National Bureau of Statistics (KNBS) quarterly report, Kenya’s economy expanded by 6.2% in the second quarter compared to 5.9% in the same period in 2015. This growth was mainly supported by agriculture, forestry and fish-ing; transportation and storage; real estate; and wholesale and retail trade. Manufacturing, con-struction, financial and insurance sectors slowed down during this quarter while accommodation and food services, mining and quarry-ing; electricity and water supply; and information and communica-tion sectors recorded improve-ments.

In August of 2016, the Presi-dent of Kenya signed into law, an amendment to the 2015 Banking Bill which capped lending interest rates. The law caps the maxi-mum lending interest rate at 4% above the base rate set by the central Bank of Kenya.

TheBUSineSSEnVIROnmEnT

Knowing where an economy stands in the aggregate rank-ing on the ease of doing business

April 2017 41


poverty levels through economic expansion, job creation among others things.

The average share of Indian manmade fibre and blendedtextiles in Ethiopia’s imports is around 10% and increasing. Presently Manmade filamentsandmanmadestaplefibresac-count for 8% and 11% respec-tively in Ethiopia’s global im-port of these textiles. There is

substantial scope to increase our exports to Ethiopia, which is evident from its growing global imports. most impor-tantly, since Ethiopia does not have the required industrial infrastructure and knowhow for manufacturing the man-made and blended textiles, it will have to depend on import at least for next 10 years and this is where the opportunity lies for Indian exporters.

Presently, the whole textile in-dustries and their value chains are exhibiting change for the better. Besides, the industry is believed to be one of the first steps into industrialization and creating op-portunities for employment and increasing international and glob-al trade. Because, increased inte-gration into the global economy is one of the best ways for devel-oping the nation, improving the standards of living and reducing

Import of textile and apparel products from India in 2015chp. Product Description Ethiopia’s imports from India Ethiopia’s imports from world

Value annual growth Share in Equivalent Value annual Share in us$ in value Ethiopia’s ad valorem in 2015, growth in worlds 000 between2011- imports, tariffapplied US$000 invalue imports, 2015 %, p.a. % by faced to between %, p.a. Kenya 2011-2015, %

50 Silk 172 46 14 35 1,255 133 Negligible

51 Wool, fine or coarse animal hair; 183 33 1 22 12,226 40 Do horsehair yarn and woven fabric

52 Cotton 18,561 58 56 25 32,928 44 Do

53 Other vegetable textile fibres; paper 802 260 11 19 7,318 17 Do yarn and woven fabrics of paper yarn

54 Man-made filaments; strip and the 15,175 19 8 29 195,404 17 Do like of man-made textile materials

55 Man-made staple fibres 10,207 1 11 21 90,024 27 Do

56 Wadding, felt and nonwovens; 47,127 313 70 33 67,700 111 Do special yarns; twine, cordage, ropes and cables and articles thereof

57 Carpets and other textile floor 12 -44 Negligible 35 21,940 65 Do coverings

58 Special woven fabrics; tufted textile 1,261 15 3 33 36,46 55 Do fabrics; lace; tapestries; trimmings; embroidery

59 Impregnated, coated, covered or 461 15 1 17 42,455 78 Do laminated textile fabrics; textile articles of a kind suitable…

60 Knitted or crocheted fabrics 84 74 Negligible 35 27,109 110 Do

61 Articles of apparel and clothing 324 -32 Negligible 35 142,909 31 Do accessories, knitted or crocheted

62 Articles of apparel and clothing 6,929 15 2 35 325,896 40 Do accessories, not knitted or crocheted

63 Other made-up textile articles; sets; 10,756 71 8 30 141,875 38 Do worn clothing and worn textile articles; rags

Total 112,045 1145,185

42 April 2017


The economy has experienced strong and broad based growth over the past decade, averag-ing 10.8% per year in 2003/04 – 2014/15 compared to the regional average of 5.4%. The government is currently implementing the second phase of its Growth and Transformation Plan (GTP II). GTP II, which will run from 2015/16 to 2019/20, aims to continue im-provements in physical infrastruc-ture through public investment projects and transform the coun-try into a manufacturing hub.

SRTEPc Export Promotion Programme in Ethiopia and Kenya

The SRTEPC ventures into these markets which are virgin, potential and provide immense opportunities for exports of Indi-an manmade and blended textile products. Both Ethiopia and Kenya are the promising markets for our products and are comparatively easy as India shares a cordial business and political relationship since time immemorial. Indian

business communities are settled in both these countries and many of them are into textile sector. Both these East African countries are well connected with sea routes and from there the vast market is extended up to Europe. Having identified all these positiveparameters apart from the above mentioned substantial import data, the council has decided to organize its flag-ship export promotional even “Incredible Textiles of India” in Ethiopia from 6 to 7 march, 2017 and in Kenya from 9 to 10 march, 2017. all the mem-ber exporters are eligible to participate in both the events, however, number of booths will be limited to around 20 only. Hence, allocation will be onfirst-come-firstservebasis.The interested member – compa-nies of the Council are requested to take maximum benefit of this not-to-be missed opportunity and expand their export horizon in the African continent.

Leading Synthetic textiles sup-plying countries to Ethiopia in 2015

Rank country1 China2 Indonesia3 India4 United States of America5 Thailand6 Germany7 Belarus8 Taiwan9 Turkey10 South AfricaSource: UN Comtrade

Economic OverviewEthiopia is the second-most

populous country in Sub-Saharan Africa with a population of 99.4 million, and population growth rate of 2.5% in 2015. The coun-try’s per capita income of $590 is substantially lower than the regional average (Gross National Income, Atlas Method). The gov-ernment aspires to reach lower-middle income status over the next decade.

Mr Sanjay Rana, Ambassador of India for Azerbaijan paid a visit to the Council office on 28th Decem-ber 2016. He was welcomed very warmly by the Executive Director, Mr Anil Kumar and all members of the staff. The ED presented him with a bouquet and a memento and thanked him for taking time out to visit our Council.

Visit by Indian ambassador, azerbaijan to SRTEPcThe purpose of the Ambassa-

dor’s visit was to explore the pos-sibility of SRTEPC taking a delega-tion of exhibitors to Azerbaijan during 2017-18 either by organiz-ing an Intexpo or a Buyer Seller Meet. He also remembered the time when he had received a dele-gation from SRTEPC while he was the Ambassador in Saudi Arabia.

The Ambassador then proceeded to brief the Council staff about Azerbaijan.

Nestled between Turkey on its west, Georgia on its North and Iran on its South it has the Caspian Sea on its East. A tiny country with a population of around 10 million it has one of the highest per capita

April 2017 43


incomes amongst countries of CIS and East Europe. Large resources of oil and gas have been primarily responsible for the prosperity of the country.

A break away country from the Soviet Union after the revo-lutionary ‘Glasnost’ policy of Gor-bachev it retains its relationship with Russia as a younger brother at the same time sharing religious beliefs with Iran and ethnic bond-ing with Turkey. Turkey is its main supplier of goods and services due the proximity and also on account of its manufacturing base.

The Ambassador was of the opinion that the people of Azer-baijan are big consumers of life-style and luxury products. They import most of their requirement of garments from Turkey since they do not have any manufactur-ing facilities of textiles within their country. The largest component of textiles imported is Garments and Made-ups, The Ambassador added that only in the recent past has one very large textile manu-facturing unit been set up with the help of the Government. It will take four to five years for require-ment of raw materials like yarn and fiber in any sizeable scale to materialize. Almost all the major brands of Turkey’s apparel and made-u products are available in

Azerbaijan which has a European style retail culture.

The ED and Mr Srijib Roy lat-er briefed the Ambassador about SRTEPC and its activities. They updated him on the Exhibitions organized by the Council under MDA and MAI and also briefed him about RBSM’s including Source In-dia 2016. The Ambassador stated his viewpoint by saying that RB-SM’s could create a better impact for exporters because many ex-hibitors could present a very wide range as against organizing an ex-hibition overseas. But the tradeoff vis a vis an exhibition is the high costs of organizing an RBSM.

The Ambassador expressed a keen interest to receive a delega-tion of exporters from SRTEPC ei-ther in the month of March which is the time of Navroze in Azerbai-jan or in September before Ram-zan as these are peak buying pe-riods. The ED then requested the Ambassador for support in three areas:

Facilitating easy import clear-ance process, wherein he indi-cated the example of harass-ment faced by our exhibitors during the International Exhi-bition in Russia.

Database of relevant buyers of Made-up’s and Women’s

clothing, to enable our mem-bers interact in advance, for a more organized and produc-tive meeting at the time of the BSM.

Suggest a suitable venue for the BSM.

The Ambassador pointed out that SRTEPC could organize the BSM either before or after the International Exhibition in Russia during September for which the council has already received an approval from the MOT under MAI. The Ambassador also mentioned the name of ANM Exhibitions, based out of Delhi, who organize two exhibitions in Azerbaijan and nearby CIS markets every year during March and September. He expressed hope that our Council could participate in one of the edi-tions in the coming year and that he and his team would spare no efforts in helping the Council for the same.

Later ED and Mr Roy took him to visit the Trade Centre, where the Ambassador expressed his keenness to know more about the products displayed. He also clicked a couple of photographs at the Trade Centre. Finally he bid goodbye to the team at SRTEPC thanking the ED for a gracious welcome.

44 April 2017


azerbaijan’s Textile and clothing Imports from World during 2015Value in USD Thousand

HS Product Import Import India’scode from from share World India (%) 2015 2015 50 Silk 309 0 0.0051 Wool, fine or coarse animal hair; horsehair yarn and woven fabric 121 0 0.0052 Cotton 2,292 0 0.0053 Other vegetable textile fibres; paper yarn and woven fabrics of 1,068 11 1.03 paper yarn 54 Man-made filaments; strip and the like of man-made textile 2,658 0 0.00 materials 55 Man-made staple fibres 3,481 0 0.0056 Wadding, felt and nonwovens; special yarns; twine, cordage, 11,808 84 0.71 ropes and cables and articles thereof 57 Carpets and other textile floor coverings 6,376 1 0.0258 Special woven fabrics; tufted textile fabrics; lace; tapestries; 445 0 0.00 trimmings; embroidery 59 Impregnated, coated, covered or laminated textile fabrics; textile 4,737 5 0.11 articles of a kind suitable … 60 Knitted or crocheted fabrics 949 0 0.0061 Articles of apparel and clothing accessories, knitted or crocheted 6,173 242 3.9262 Articles of apparel and clothing accessories, not knitted or 39,312 127 0.32 crocheted 63 Other made-up textile articles; sets; worn clothing 9,395 51 0.54 Total 89124 521 0.58Source : ITC map

Exports of Synthetic & Rayon Textiles to azerbaijanValue in USD MN

Fabrics made-ups yarn Fibre Total % Gr/Dec

2010-2011 0 0.09 0 0 0.09

2011-2012 0 0.01 0 0 0.01 -88.89

2012-2013 2.56 0.15 0 0 2.71 27000.00

2013-2014 4.93 1.07 0 0 6.00 121.40

2014-2015 3 1.22 0 0 4.22 -29.67

2015-2016 0.04 0.10 0.00 0.00 0.14 -96-68

Source: DGCI&S, MOC

main Items of Export to azerbaijan

Fabrics: Polyester Filament Fabrics

Made-Ups: Shawls and scarves, Handkerchief, Muffler

Imports by Azerbaijan from leading market during 2015

Man-madefilaments(Chapter54)main partner Imported value 2015 Share in azerbaijan’s Countries USDthousand imports,(%)

World 2,658 100

Iran 1,301 48.95

Italy 608 22.87

Turkey 422 15.88

China 206 7.75

UK 42 1.58

Russia 25 0.94

man-made Staple Fibre (chapter 55)

main partner Imported value 2015 Share in azerbaijan’s Countries USDthousand imports,(%)

World 3,481 100

Germany 1,473 42.32

Iran 921 26.46

Turkey 389 11.17

Belarus 259 7.44

Pakistan 138 3.96

April 2017 45


Some of the relevant initiatives taken by the Ministry of Textiles, Government of India and achieve-ments during 2016 are given be-low.

1) Special Package for Job creation & Export Promo-tion in apparel Sector

The Ministry of Textiles rolled out a special package with approved budget of Rs 6,006 crore to sup-port the apparel sector and enable it to improve its global competi-tiveness. Expected outcomes of the package are creation of Jobs for 1 crore people, mostly wom-en; US$ 30 billion exports; and in-vestment worth Rs 74,000 crores – all in three years.

The salient features of the pack-age are:

Employee Provident Fund Scheme Reforms

Increasing overtime caps

Introduction of fixed term em-ployment

Additional incentives under ATUFS

Enhanced duty drawback cov-erage

Enhancing scope of Section 80JJAA of Income Tax Act

2) Special Package for Job creation & Export Promo-tion in made-ups Sector

Given the standing and potential of the made-ups sector, the Union Cabinet approved a special pack-age for the sector, on December 7,

2016 within the approved budget of Rs 6,006 crore for the apparel package, in order to create large scale direct and indirect employ-ment of up to 11 lakh jobs over the next three years in the made-ups sector.

Providing production incentive through enhanced Technology Upgradation Fund Scheme (TUFS) subsidy of additional 10% for Made-ups, similar to what is provided to garments, based on additional produc-tion and employment after a period of 3 years.

Extension of Pradhan Mantri Paridhan Rozgar Protsahan Yojana (PMPRPY) Scheme (for apparel) to made-ups sector for providing additional 3.67% share of Employer’s contribu-tionin addition to 8.33% al-ready covered under Pradhan Mantri Rozgar Protsahan Yo-jana (PMRPY), for all new em-ployees enrolling in EPFO for the first three years of their employment, as a special in-centive to Made-ups sector.

Extension of Rebate of State Levies (ROSL) (for apparel) Scheme to made-ups sector for enhanced Duty Drawback on exports of Made-ups.

Simplification of labour laws: Increasing permissible over-time up to 100 hours per quar-ter in Made-ups manufacturing sector, and making employees’ contribution to EPF optional for employees earning less than

Rs 15,000 per month.

The package is expected to boost employment in the textile sector and create employment for up to eleven lakh persons, lead to a cu-mulative increase of US$ 2.8 bil-lion in exports, attract investment of approximately Rs 6000 crores and enhance benefits to the work-ers in the textile and apparel sec-tor.

3) Amended Technology Up-gradation Fund Scheme

The new scheme specificallytargets:

Employment generation and export by encouraging apparel and garment industry, which will provide employment to women in particular and in-crease India’s share in global exports.

Promotion of Technical Tex-tiles, a sunrise sector, for ex-port and employment.

Promoting conversion of exist-ing looms to better technol-ogy looms for improvement in quality and productivity.

Encouraging better quality in processing industry and check-ing need for import of fabrics by the garment sector.

The new scheme provides for two broad categories:

Apparel, Garment and Techni-cal Textiles, where 15 percent subsidy would be provided on capital investment, subject to a ceiling of 30 crore rupees for

yEaR EnD REVIEW 2016 – mInISTRy OF TExTIlES

46 April 2017


entrepreneurs over a period of five years.

Remaining sub-sectors would be eligible for subsidy at a rate of 10 percent, subject to a ceil-ing of Rs 20 crores on similar lines.

4) Integrated Skill Develop-ment Scheme

To mark the occasion of Good Governance Day, on 25th De-cember, 2014, the ISDS has been scaled up during the 12th Plan with an allocation of Rs 1,900 crores to train 15 lakh persons. ISDS seeks to address the criti-cal gap of skilled manpower in textile industry through industry-oriented training programmes; it is implemented through three components by 86 Implementing Agencies.

5) north East Region Tex-tile Promotion Scheme: nERTPS

A landmark initiative under NERTPS for construction of Apparel and Garment manufacturing Centres in all NE States was launched in 2014, with the announcement by the Prime Minister on 1st Decem-ber 2014 in Nagaland. The objec-tive of the scheme is to promote employment in the NE States and encourage entrepreneurship espe-cially amongst women, in the area of garmenting which has a huge potential both within the country and abroad.

6) Scheme for Integrated Tex-tile Parks (SITP)

SITP addresses the need for in-frastructure on cluster basis, and

helps the industry meet interna-tional environmental standards and establish integrated value-chains under PPP for lowering costs. Under SITP, 66 textile parks have been sanctioned which are at different stages of implementation. This has resulted in employment for 79,000 people and additional investment of Rs 9,500 crores.

7) Integrated Processing De-velopment Scheme(IPDS)

The Ministry of Textiles is imple-menting IPDS to enable the tex-tile processing sector in meeting environmental standards through appropriate technologies such as marine, riverine and Zero Liquid Discharge (ZLD). The Govern-ment of India provides financial assistance up to 50% of project cost for Common Effluent Treat-ment Plants (CETPs), subject to a ceiling of Rs 75.00 Crore.

The Ministry has approved four projects in Rajasthan and two projects in Tamil Nadu, providing relief to about 2000 SME units.

8) Powerloom Sector

More than 80,000 looms have been upgraded, with subsidy of Rs 105 crores from the Gov-ernment of India.

This has led to a substantial improvement in quality, pro-ductivity and earnings.

Moreover, 125 Group Worksheds have been sanctioned in the last two years. To ensure availability of raw material at a reasonable rate, 20 yarn banks where sanc-tioned in Tamil Nadu, Gujarat, UP & Maharashtra. The assistance to

powerloom sector has been scaled up in 2016-17 to Rs 115 crores, as compared to Rs 12 crores three years ago.

9) Promotion of Technical Textiles

The Ministry has taken various ini-tiatives to promote technical tex-tiles.

Technology Mission on Techni-cal Textiles (TMTT) (Total out-lay: Rs 200 crores); Centres of Excellence have been estab-lished/upgraded and contract research conducted.

Focus Incubation Centers un-der TMTT (Total outlay: Rs 17.4 Crore).

Scheme for Promoting Usage of Agrotextiles in NER (Total outlay: Rs 55 Crore).

Scheme for Promoting Usage of Geotextiles in NER (Total outlay: Rs 427 Crore).

Government of India provid-ed 10% Capital Subsidy and 5% Interest reimbursement on specified technical textile machinery under TUFS. In re-cently announced ATUFS as well, 15% capital subsidy shall be provided.

100% FDI is allowed in the textile sector (including Tech-nical Textiles) under the auto-matic route.

In Budget 2016-17, Customs Duty decreased from 5% to 2.5%, on select high perfor-mance speciality fibres (raw material to Technical Tex-tiles).

April 2017 47


IntroductionExport is a function of interna-tional trade whereby goods pro-duced in one country are shipped to another country for future sale or trade. Export marketing means exporting goods to other countries of the world. It involves lengthy procedure and formalities framed by the exporting country as well as by the importing country. When a business crosses the borders of a nation, it becomes infinitely more complex. Along with this, export marketing offers ample opportu-nities for earning huge profits and valuable foreign exchange. It is also known as International Mar-keting.

Features of Export marketingSystematic Process – The

export marketing is a process of collecting the right informa-tion from the right source; an-alyze it properly and then take systematic export marketing decisions to undertake various marketing activities.

large Scale Operations – Emphasis is placed on large orders in order to obtain econ-omies in large sole production and distribution of goods. The economies of large scale help the exporter to quote com-petitive prices in the overseas markets. Exporting goods in small quantities is costly due to heavy transport cost and other formalities.

customer Focus – The ex-porter needs to identify cus-

tomers needs and wants and accordingly design and devel-op products to generate and enhance customer satisfac-tion which will not only bring in higher sales in the overseas markets, but it will also im-prove and enhance goodwill of the firm.

Trade barriers – There are various trade barriers because of the protective policies of different countries. Tariff and non-tariff barriers are used by countries for restricting im-port. The exporter/importer must have a good knowledge of tradebarriers.

Trading Blocs – Export trade is also affected by trading blocs, certain nations form trading bloc for their mutual benefit and economic development. Indian exporters should have a good knowledge of important trading blocs such as NAFTA, European Union and ASEAN.

Three – faced competition – Exporters have to face three-faced competition, i.e. from the suppliers of the exporter’s country, from the local produc-ers of importing country and from the exporters of compet-ing nations.

Foreign exchange regula-tions – Export trade is subject to foreign exchange regula-tions related to payments and collection of export proceeds imposed by different countries. Such restrictions affect free movement of goods among the countries of the world.

marketing – mix – Export marketing requires the right marketing mix for the target markets, i.e. exporting the right product, at the right price, at the right place and with the right promotion.

International marketing Research – Export marketing requires the support of mar-keting research in the form of market survey, product survey, product research and develop-ment as it is highly competi-tive.

Advantages of Export Marketing at the National Level

Earning foreign exchange – Exports bring valuable for-eign exchange to the export-ing country, which is mainly required to pay for import of capital goods, raw materials, spares and components as well as importing advance technical knowledge.

International Relations – One way to maintain political and cultural ties with other countries is through interna-tional trade.

Balance of payment – Large – scale exports solve balance of payments problem and en-able countries to have favour-able balance of payment posi-tion.

Reputation in the world – A country which is foremost in the field of exports, commands a lot of respect, goodwill and reputation from other coun-tries.

ExPORT maRKETInG

48 April 2017


Employment Opportunities – Export trade calls for more production. More production opens the doors for more em-ployment opportunities in all the sectors.

Promoting economic devel-opment – Exports are needed for promoting economic and industrial development. Large-sole exports bring rapid eco-nomic development of a na-tion.

OptimumUtilization of Re-sources – There can be op-timum use of resources. For example, the supply of oil and petroleum products in Gulf countries is in excess of home demand. So the excess pro-duction is exported, thereby making optimum use of avail-able resources.

Spreadeffect– Other sectors also expand such as banking, transport, insurance etc. and at the same time number of ancillary industries comes into existence to support the export sector.

Spreading of Risks – Ex-port marketing helps to spread risks of business. Normally ex-port firms sell in a number of overseas markets. If they are affected by risks (losses) in one market, they may be able to spread business risks due to good return from some other markets.

Higher standard of living – Export trade calls for more productions, which in turn in-crease employment opportuni-ties. More employment means more purchasing power, as

a result of which people can enjoy new and better goods, which in turn improves stan-dard of living of the people.

advantages of export market-ing at Business/Firm/Enter-prise level

Reputation – An organization which undertakes exports can bring fame to its name not only in the export markets, but also in the home market.

Optimum Production – A company can export its excess production after meeting do-mestic demand. Thus, the pro-duction can be carried on up to the optimum production ca-pacity. This will result in econo-mies of large scale production.

Spreading of Risk – A firm engaged in domestic as well as export marketing can spread its marketing risk in two parts. The loss is one part (i.e. in one area of marketing) can be com-pensated by the profit earned in the other part/area.

Export obligation – Some export organization are given certain concessions and facili-ties only when they accept cer-tain export obligations Large-scale exports are needed to honour such export obligations in India, unis operating in the SEZs/FTZs are expected to honour such export obligations against special concessions of-fered to them.

Improvement in organiza-tionalefficiency– Research, training and the experience in dealing with foreign markets, enable the exporters to im-prove the overall organization-

al efficiency.

Improvement in product standards – An export firm has to maintain and improve standards in quality in order to meet international standards. As a result, the consumers in the home market as well as in the international market can enjoy better quality of goods.

liberal imports – Organiza-tions exporting on a large-scale collect more foreign exchange which can be utilized for liberal import of new technology, ma-chinery and components. This raises the competitive capacity of export organizations.

Financial and non-Financial benefits– In India, exporters can avail of a number of facili-ties from the government. For example, exporters can get DBK, tax exemption etc. They also can get assistance from export promotion organiza-tions such as EPCs etc.

higherprofits– Exports en-able a business enterprise to earn higher prices for goods. If the exporters offer quality products, they can charge high-er prices than those charged in the home market and thereby raise the profit margin.

Present problems faced by In-dian exporters

Recession in world market – The world market, faced re-cession in 2008 and in the first half of 2009. During recession, exporters get low orders from overseas markets, and they have to quote lower prices. Therefore, exporter gets less profits or suffers from losses.

April 2017 49


Technological differences– The developed countries are equipped with sophisti-cated technologies capable of transforming raw materials into finished goods on a large scale. On the other hand the less developed countries lack technical knowledge and lat-est equipments. And therefore they have to use their old and outdated technologies. It leads to the lopsided development in the international market.

Reduction in export Incen-tives – Over the years, the Government of India has re-duced export incentives such as reduction in DBK rates, withdrawal of income tax ben-efits for majority of exporters, etc. The reduction in export incentives demotivates export-ers to export in the overseas markets.

Several competition in global marketing – Export marketing is highly competi-tive. This competition relates to price, quality, production cost and sales promotion tech-niques used. Indian exporters face three-faced competition while exporting.

Problem of product stan-dards – Developed countries insist on high product stan-dards from developing coun-tries like India. The products from developing countries like India are subject to product tests in the importing coun-tries. At times, the importing countries do not allow imports of certain items like fruits, tex-tiles and other items on the grounds of excessive toxic con-

tent. Therefore Indian export-ers lose markets especially in developed countries.

Fluctuations in Exchange Rate – Every country has its own currency which is differ-ent from international curren-cies. The dominant interna-tional currencies are US dollar or Sterling Pound. From the point of view of Indian export-ers we are interested to realize the payment in international currency. Foreign exchange earned by the operators is converted into Indian rupees and paid to the exporters in Indian currency; this exposes the exporters to the dangers of fluctuation in foreign exchange rates.

Problems of Sea Pirates at-tacks – A major risk faced by international trade is attack by pirates in the Gulf of Aden. More than half of India’s mer-chandise trade passes through the piracy infested Gulf of Aden. New exporters and im-porters are facing problem, because of increased pirate at-tacks as they find it difficult to get insurance cover.

Problem of Subsidies by Developed countries – The developed countries like USA provide huge subsidies to their exporters. Therefore, the ex-porters of developing countries like India find it difficult to face competition in the world mar-kets.

Problem in preparing Docu-ments – Export involves a large number of documents. The exporter will have to ar-range export documents re-

quired in his country and also all the documents as men-tioned in the documentary let-ter of credit. In India, there are as many as 25 documents (16 commercial and a regulatory documents) to be filled in.

Government restrictions and foreign exchange regu-lations – The Government re-strictions compel the exporters to follow certain rules and reg-ulations in the form of licenses, quotas, and customs formali-ties. Due to such restrictions, new problems develop before the exporters. Even trade re-strictions in foreign countries create problems before export-ers. Indian exporters face this difficulty of government re-strictions and foreign exchange regulations even when trade policy is now made substan-tially liberal.

highriskandUncertainties– Export marketing is subject to high risks and uncertainties. The risks may be both politi-cal like government instability, war etc. The commercial risks involve insolvency of the buyer, delayed default on the part of the buyer dispute on quality.

competition from china – India is facing stiff competition from China in the world mar-kets, especially in the OECD markets. Some of the Indian exporters have lost their over-seas contracts due to cheap Chinese goods and supplies. This is the major problem of exporters.

Source: Business Management Studies (BMS), University of Mumbai

50 April 2017


As we all know, textile plays a major role in the Indian economy contributing 14% to industrial production and 4% to GDP. With over 45 million people in the industry, textiles is one of the largest source of employment generation in the country, The sector also accounts for nearly 13 percent of total exports.

Unprecedented challengesHowever, the sector is facing unprecedented challenges especially on exports front. It is a matter of concern that the global trade volumes would rise only by 1.7% this year as per WTO forecast. This would be the slowest increase since the 2008 financial crisis. It will be the first time in 15 years that global trade has grown more slowly than GDP. Further, China, on which the world trade in textiles largely depends, has carried out massive changes in its supply chains which has made its GDP growth less import – intensive. These dramatic slowing down of trade growth is serious and calls for suitable strategies. Increase in protectionism and anti-globalisation sentiments in the USA and around the world is further aggravating the situation for trade development.

Market Access issuesAnother challenge faced by our exporters is with regard to market access on account of the high and discriminatory import duties on textiles sourced from India in major markets like the EU, China and Turkey, Indian textiles attract duties ranging between 9.6% to 12% in the EU as against “zero duty” on imports from competing countries like Bangladesh, Pakistan, Sri Lanka and Vietnam. In China, Indian textiles attract duties ranging between 10% to 14%. Turkey has imposed very high additional duty of 20% in addition to the normal duty of 8% on textiles from India. Indonesia has imposed safeguard duty on Indian Cotton yarn. All these factors impact our export growth thereby, slowing it down.

Internal factors affecting exportsOn the domestic front, the sector faces challenges like in adequate infrastructure, lack of reliable power supply, high interest rates, rigid and outdated labour laws and un-rebated state level taxes and duties, delay in the release of export benefits etc, thereby, adding to the cost for the exporters. In a recent report released by RBI, textiles is one of the sector that has contributed significantly towards NPAs of the banks which will have a cascading effect on the textiles industry as a whole.

Exports have posted strong growth over the yearsDespite the challenges faced by the exporters both internationally and domestically, exports have been a core feature of India’s textile and apparel sector. India has maintained its third position in textile exports next to China and the EU as per a recently published “World Trade Statistical Review” by WTO. This is mainly due to the fact that

capacity built over the years has led to low cost of production per unit in India’s textile industry which in turn has resulted into a strong competitive advantage to the country’s textile exporters as compared to key global players.

Robust domestic market for textilesRapid urbanization growing population, rising per capita income, growing middle class and young population exposed to changing tastes and fashion has led to huge opportunities for the textiles sector in the domestic market. The domestic textile and apparel industry in India is estimated to reach US$ 141 bn by 2021 and US$ 100 bn by 2017 from US$ 67 bn in 2014 as per the Ministry of textiles. The market for home textiles is also growing rapidly. The factors that would be contributing towards the growth of the home textile industry is the growing house hold income, increasing population and growth of end use sector like hospitality, healthcare etc.

With consumerism and disposable income on the rise, the retail sector has also experienced a rapid growth in the past decade with several international players like Marks & Spencer, Guess and Next having entered the Indian which has created huge opportunities for textiles in the domestic market.

Policy support needed for growthWhile the Government has announced various measures to promote exports there are certain areas that need to be addressed. For exports of textiles to grow and achieve its full potential the Government should take the following urgently to create an enabling environment:

Increase the entitlement under MEIS for exports of made ups to the FU from 2% to 5% to offset the adverse impact of the tariff preference given to Pakistan, Bangladesh, Turkey; provide for refund of state levies on exports of fabrics and made ups as in the case of garments, extend the benefit of 3% Interest Equalization Scheme and MEIS to exports of cotton yarn, extend the benefit of 3% Interest Equalization Scheme to the merchant exporters, engage in dialogue with Turkey and China for reduction in the import duties, negotiate for zero duty for cotton yarn under India-Korea CEPA, conclude the Indo-EU FTA at the earliest by adopting a sectoral approach so that textiles can benefit.

Way forwardWith an enabling environment and adequate policy support from the Government, the textile sector in India can grow and achieve the ambitious vision of exports of US $ 300 bn and 20% share of global trade by 2024-25 as envisaged in the Vision & Action Plan 2014-25 of the Government for the Indian textile and apparel sector. The sector can also create substantial employment opportunities especially in the rural areas and for women.

April 2017 51

Indian Textile Industry – Challenges & OpportunitiesBy - Mr R. K. Dalmia, Chairman - TEXPROCIL


In recent times, it is being reported in various articles that China is shifting out from the textile & apparel industry making way for other types of high value consumer products.

Contrary to these reports, available evidence suggests that China is rapidly expanding its textile manufacturing capacity in the Xinjiang autonomous region in the North West of the Country.

China is building the Xinjiang province as a spinning industry hub. Around 60% of cotton growth in China comes from Xinjiang. More than US$ 440 mn Investment has been reported in the industrial city of Aksu in the last nine months for investment in new spindles. The installed spinning capacity of Xinjiang was 8 million spindles by the end of 2015 though not all units have started production yet. The target is to increase the capacity to 12 million spindles by the end of 2017. It has been planned increase capacity to 18 million spindles by the end of 2020.

The Chinese Authorities have into place a ten point Action Plan of preferential policies to boost the textile manufacturing activity in the Xinjiang Region so as to achieve the following objectives by 2020:

Add 18 million new spindles (incl. open-end) Increase Viscose fiber output to 900 million kgs Increase Apparel and accessories production so as to reach 500 million places Generate new employment for 600,000 people.

Preferential Policy support for textile & Apparel sectors in XinjiangThe above mentioned objectives are being achieved by providing the following support:

Preferential tax policy Low electricity cost Freight cost subsidy Cotton consumption subsidy Training subsidy Effluent treatment construction and subsidy Quick disbursement of subsidy – refund within three months Allocation of special construction fund of around $ 10 bn Yuan to textile and apparel industry Rent free factory sheds – for the first three years Construction of transport connectivity from Urumqi in Xinjiang to Duisburg (Germany) Cargo train running through Alataw Pass- Kazakhstan-Russia-Belarus-Poland-Germany covering 8,000 km in 10 days with daily service.

Rapidly developing textile industry in Xinjiang clearly indicates that China is not vacating certain sectors

of textile value chain, but simply relocating to other cost competitive regions within China and outside the mainland.

Implications for IndiaCost of production of Cotton Yarn made in Xinjiang has become cheaper by 10% compared to other parts of the mainland, mainly because of financial and policy level supports.

By the end of the year 2020, if 18 million additional spindles become operational in Xinjiang, the total output of yarn will be equivalent of volume of yarn imported into China at present, thereby leading to drastic decline in import.

Until December 2015, China was the single largest market for export of cotton yarn from India. Form January 2016 onwards, India is gradually losing its market share in China to supply from Vietnam as well as Xinjiang and for the period January – August 2016, there was a decline of 40% in Volume terms in export of cotton yarn to China compared to previous year similar period.

Considering the substantial Increase in spinning capacity In Xinjiang, as well as relocation and new Investment by Chinese textile companies in other cost competitive centres such as Vietnam, Bangladesh, South Carolina (USA) etc., Indian textile manufacturers and policy makers need to quickly workout suitable strategies in enhancing competitive advantage so as to achieve sustained growth in export and domestic markets.

Need for policy level supportExpansion and relocation of spinning capacity by China is around to affect many yarn manufacturing countries around the world. It is in our best interest to safeguard the interest of the Indian spinners by creating demand in the domestic industry as well as in emerging markets by enhancing the competitive advantage and Trade Agreements.

To maintain India’s core competence in spinning segment and convert it into the competitive edge in the globalised scenario, it is necessary that the modernization and technological upgradation should be a continuous process.

The Vision, Strategy and Action Plan of Ministry of Textiles aims at increasing the domestic market size from US$ 100 bn. (2013-14) to US$ 350 bn. By 2024-25. During

52 April 2017

Textile industry in China: Vacating or Relocating?By - Mr Ujwal Lahoti, Vice Chairman - TEXPROCIL


this period, exports are projected to grow from US$ 40 bn. In order to achieve this and meet the demand for yarn and fabrics in the downstream value added sector, the spinning capacity has to increased to over 100 million spindles in addition to extensive investments in weaving, knitting, processing, garmenting and technical textile sector with the latest technology.

Spinning sector being the more capital intensive and the back bone of the entire textile and apparel value chain, it is essential to sustain its financial viability and maintain its core competitive edge.

In a recent report released by the reserve bank of India, it has been pointed out that just five sectors contributes to 61 percent of the stressed assets of the banking sector, namely, infra, steel, textiles, power and telecom

In order to mitigate the present plight of Indian textile sector and also to withstand the intense competition by the Chinese textile manufacturers/exporters owing to extensive policy level support granted by their government, in particular to spinning sector, the Council has submitted representations to the government of India indicating clear roadmap to achieve export targets. Roadmap clearly indicates policy level immediate, medium & long term interventions.

While the Government has taken measures to increase exports there are certain areas that need to be addressed. In the short terms, exports of cotton yarn should be covered under the Merchandise Export Incentivization Scheme (MEIS) and 3% Interest Equalization Scheme. Further, the benefit of 3% Interest Equalization Scheme should also be extended to the merchant exporters who contribute towards bulk of the textile exports.

Medium & long term interventions required include; improving the cotton supply scenario; rationalizing cotton sales policy of CCI; providing loans to spinners for purchasing cotton during peak cotton season; formulation of industry favourable FTAs, reimbursement of funds under ATUFS etc.

Further, In China which is a huge market for textile exports, India textiles attract duties renging from 10% to 14%. The Government should engage in dialogue with China for reduction in the import duties on cotton yarn and fabrics/ made ups which can lead to a substantially higher level of exports from India thereby contributing to reduction of the trade gap with China in the coming years.

Some of these steps will go a long way in reinvigorating the sector & providing the much needed relief to overcome the present trying times.

April 2017 53

Indian Madeups Industry: A Labour Intensive Sector in the “Cut & Sew” Basket

By - Dr. K V Srinivasan, Dy. Vice Chairman - TEXPROCILIntroductionIndia is emerging as a major production centre for home textiles with the demand for home furnishing on an upswing especially as consumers in the world market including India are giving importance to changing home décor more frequently and are ever on the look-out for new and innovative products to deck up their homes and offices.

Indian home textiles are today found in over 150 countries, including important consuming markets like USA, Germany, France, Brazil and Australia among many others. With a huge array of linens – bed, bath kitchen, table, upholstery and accessories – Indian home textile makers are successfully adorning homes across the globe.

As per a report of Technopak Analysis the Indian home textiles market is growing modestly at 8% CAGR in the domestic market and about 12% CAGR in the market, The segment is growing consistently and is performing better than other sector like apparels as every product is co-related with the other, when it

comes to home textiles. When one buys curtains, the cushions and floor coverings have to synchronize in terms of colours, patterns, textures or themes. Thus, when consumers opt for a change in home décor, they would prefer to work according to a theme and will select multiple products for the home décor.

The Indian cotton home textiles industry has come a long way developing a full-fledged home textiles portfolio complete with bed & bath lines, table and linens, curtains, terry towels, decorative made-ups among others. Home textile clusters are present across the country – Panipat for carpets; Madurai and Karur for napkins; Sholapur for terry towels; and Jaipur & Jetpur for khadi, batik, tie and dye.

The wheels of modernization has driven the cotton textile industry into today’s state-of-the-art textile weaving and processing technologies which have transformed India into a global supplier of home décor products. During the year 2015-2016, home textiles had a 47 per cent share within the cotton textile export basket from India with an export level of US$ 5.2 billion.


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Overview of cotton home textile sector 2015-2016The global slowdown in recent times has put pressure on the margins of home textile and made-ups manufacturers. It has become increasingly important doe Indian companies to remain competitive in world markets considering that countries like Bangladesh, China, Pakistan, and Turkey are fast developing capabilities in designing and manufacturing of wider width fabrics. Further, one of the biggest challenges that Indian export of made-ups faces is the tariff in EU, one of India’s major markets. Bangladesh and Pakistan enjoy a zero while Indian made-ups exports are charged with a tariff of 9.6%.

India has a larger share in made-ups globally (>7%) than apparel segment (5%) indicating India’s higher competitiveness in made-ups. India has a strong position in key importing countries across the world and made-ups is one of the better performing among the T&C category. The Indian Made-ups segment have delivered a strong performance in USA – the largest made-ups import market – which can be further enhanced.

The Indian home textile products can be broadly categorized into the organized and the unorganized sector on the lines of the overall structure of the textile industry at large. The present market size in terms of volume largely tilts towards the unorganized sector. However, in the last few years, the production of fabrics has been increasing in the organized sector. According to a cross-section of industry experts about 35% of the home demand is catered by the organized sector and the balance 65% by the unorganized sector. In other words, the top exporters have a share of 30% and the balance exports of about 70% are shared by the rest which includes small & medium sized companies.

India also has a growing domestic consumption of made-ups and the current market demand is estimated at US$ 4.8 bn. The Indian demand for made-ups products has grown from 802 million places in 2006 to an estimated 1278 million pieces in

2015. This is projected to reach about 1666 million pieces in 2020.

Employment potentialDespite having same issues as that of apparel industry viz. inflexible labour laws, higher cost of borrowing, back of level playing field in major markets etc. Indian home textiles have performed better than apparel sector in terms of global exports share and growth. The made-ups segment is largely catered by the unorganized sector although some Indian manufacturers of home textiles are among the largest made-ups manufacturers in the world.A recent Boston Consulting Group (BCG) report in 2016 states that the total employment in the T&C sector will reach 74 million by 2020 and 103million by 2025 from a figure of 49 million in 2014. The share of women employed is almost 69% of the total employment.The made-ups sector is on par with apparel in terms of investment and employment generation potential since both involve ‘cut & sew’ operations. The special package of Rs 6,000 Crores provided to the apparel sector by the Government of India should also be extended to the made-ups sector as this sector can provide comparable returns to the nation in terms of employment, investment and exports. With this support the sector has the potential to reach an export level of US$ 7 billion providing about 25 lakh jobs in the process. It will also have the potential of attracting investments worth over Rs 13,000 Crores.The specific impact would be that the enhanced cost competitiveness will help expand exports rapidly. It will also assist in conversion of contract labour into fixed term workforce while more companies will be covered under labour compliance. Companies will be able to execute larger orders during peak season and it will help in garnering better investment attractiveness creation of larger capacities and emergence of new entrepreneurs.

Indian FTAs: Need for a Strategic ThrustBy - Mr Siddhartha Rajagopal, Executive Director - TEXPROCIL

IntroductionExports from India have been on a decline in 20 of the last 21 months, which by all accounts has been unprecedented in recent years.

What are the reason for this steady decline in trade levels from India? Is the sustained decline in Indian exports due to structural changes taking place in world trade thereby affecting our merchandise exports?

While the obvious reason can be attributed to the

sluggish demand in overseas markets, factors relating to “contracting of global supply chains” and sourcing of inputs from inside a country or within a region rather than outside also appear to be responsible for the declining trend.

One of the important factors is the virtual collapse of the multilateral framework of the WTO as a forum for trade expansion and the emergence of Mega Trade Agreements like the Trans-Pacific Partnership (TPP) Agreement which includes two of the three biggest economies of the world


April 2017 55

and covers 40% of the global economy.

Another trend which is going unnoticed is the importance being given to local content rules – under the RoO (Rules of Origin) – over tariff considerations. In the case of the TPP, primarily driven by the USA, rules of origin like the “yarn-forward” rule in the case of the textile sector are first time being introduced in the Pacific Region.

The European Union (EU) has also concluded a major trade agreement with Vietnam and along with a set of preferential trade agreements already in place in the Euro-Mediterranean region with Morocco, Tunisia, Turkey, Egypt and the proposed TTIP with USA, the stage is set for a re-ordering of trading priorities.

Indian FTAsGiven this context we need to reflect upon the Indian FTAs signed thus far, Ever since the collapse of the WTO Doha Round, the agreements signed by India have mostly resulted in skewed trade.

Within Asia, India has signed bilateral FTAs with Sri Lanka, Afghanistan, Singapore, Bhutan, Nepal, Korea, Malaysia and Japan. There are also two regional trade agreements, the South Asian Free Trade agreement, SAFTA, and the India-Association of Southeast Asian Nations Agreement (ASEAN).

Outside Asia, FTAs have been agreed with Chile and MERCOSUR. The country has also initiated similar deals with Canada, Australia and EU and currently negotiating the Regional Comprehensive Economic Partnership (RCEP).

One of the reasons that the FTAs have given poor returns is the lack of depth in them and most, seem to be loaded against India. This has also resulted in the rise in imports of certain products like steel, pharma, engineering, chemical while their exports have waned. In the case of the Textile sector, there has also been some rise in the imports of man-made fabrics from China and other South-East Asian countries.

For the FTAs that India has signed, TEXPROCIL has been representing to the government to review certain aspects and anomalies relating to staging of tariff reduction, the sensitive and exclusion lists etc.

For instance, the Indo-Korea CEPA has an inverted duty structure where yarns have a duty of 4% while fabrics and made-ups are duty free. Similarly under the Indo-ASEAN and India-Malaysia agreements, Vietnam & Malaysia have put several items of yarns & fabrics in the sensitive and exclusion list thereby limiting India’s exports. If these issues are addressed, India will be able to increase its

exports to Vietnam and Malaysia too.

As far as RCEP is concerned, India needs to guard against raw materials and intermediate products of China that can get into other participating countries and reach India as garments and made ups, thereby enjoying tariff concessions under RCEP. India accordingly took a three approach of liberalizing tariff lines, which included an ASEAN tier, a Korea & Japan tier and finally a China, Australia & New Zealand tier.

With a view to injecting momentum into the RCEP negotiations, India has also indicated its willingness to compromise on its three-tiered tariff schedule. As regards goods, the negotiations are getting grounded as most of the members are seeking access to the Indian market, pushing in a way the unfinished agendas of their separate agreements.

Challenges AheadGlobal value chains (GVCs) have been a prominent feature of the international trade landscape but deepening the engagement through regional trade agreements has resulted in diversion of trade rather than a broadening of it.

Intermediate goods and services from several countries within a region are now combined through integrated production networks to produce the final goods and services.

A case in point is the proposed RCEP Agreement with the presence of China as an originating country. How to deal with China as a trade partner is an important strategic question. With a trade deficit of US$ 53 billion accounting for almost 45% of India’s aggregate trade deficit, one of the sectors, which can contribute to reduction of the trade deficit, is the textiles sector.

With India already accounting for 35% 40% of China’s requirements of Cotton and Cotton Yarn, we need to scale up our trade in Fabrics, Made-ups and even Garments.

ConclusionIn conclusion, it needs to be stated that there is a strategic compulsion to recognize regional trade pacts as the “new normal” in world trade compared to the forces of globalization. Towards this end, we need to develop a dynamic policy of “request & offer” and not only “request” for tariff preferences and limit the tendency to put items in restricted lists. Above all provide an enabling policy environment at home avoiding undue protectionist measures on sourcing of raw materials/fibres so that the entrepreneurial spirit is suitably incentivized to produce value added goods.


India’s biggest digital inkjet printer manufacturer ColorJet India Ltd, a division of ColorJet Group has been acknowledged as ‘India’s Largest Manufacturer of Wide Format Digital Printer’ at the annual 6th Imaging Solution Awards Night held in New Delhi on January 13, 2017, for which it won an award, instituted by Imaging Solution magazine.

The event at which over 45 awards were given away in various imaging industry categories was attended by over 400 top imaging industry professionals who includ-ed manufacturers, importers, ex-porters, distributors, resellers, etc from different parts of India and also from China.

ColorJet India now offers the lat-est and several digital printers for various segments like Textile print-ers, Signage printers, Eco Solvent printers and UV printers. The com-pany also offers a varied range of digital printing inks including Tex-tile inks, Solvent inks, Eco Solvent inks, Dye Sublimation inks and UV Curable inks.

The ColorJet textile digital print-er range includes the best selling Metro and Vastrajet textile print-ers. The Fabjet Duo, Fabjet Grand and Aurajet Series II, make up for the rest of the ColorJet textile digi-

ColorJet Wins ‘India’s Largest Manufacturer for Wide Format Digital Printer’ Award

tal printers line-up.

ColorJet is globally reputed for its deep commitment to tech-nological innovation, strong out-reach, service infrastructure and complete customer focus, and operates two manufacturing fa-cilities of which one is in India and the other in China. This helps the company to offer faster deliveries of digital printer spares to its cus-tomers.

ColorJet India markets its prod-ucts in 14 countries worldwide and has sales offices spread across seven countries. To-date, Color-Jet has installed over 4,000 of its printing solutions across 315 cit-ies around the world backed by an over 280 strong member team, of which almost 100 are in technical

related functions.

“We feel honoured on winning the award for being named ‘India’s Largest Manufacturer for Wide For-mat Digital Printer’. We dedicate this award to the large number of Indian digital printing fabric manu-facturers, who reposed faith in Col-orJet digital printers, due to whom we bagged the award,” Smarth Bansal at Colorjet India said.

“At the same time, winning the award also increases our respon-sibility towards our current and fu-ture customers, as we will need to continue to offer the same ‘Gold’ standard of after sales service, for which Colorjet is recognised in In-dia and the world,” he added.

For more information please visit: www.colorjetgroup.com

56 April 2017

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