Textile Industry in Developing Countries

7/29/2019 Textile Industry in Developing Countries

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Indian Textile Industry

By,Virji Uplana(94)

MukeshChaudhary(46) VardhyTandel(89) VijayMakvana Apurvkatariya(57)


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Introduction industry is worth over US$ 4395 billion . Global trade in this industry is now at US$ 350 billion. Among the countries, Japan, Australia and New

Zealand are the significant consumers of Indiantextiles.

India ranks second with 8 percent of the total.

High production of wool, cotton and silk over theworld has boosted the industry in recent years.


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History The term 'Textile' is a Latin word originating from the word

'texere' which means 'to weave' The history of textile is almost as old as that of human

civilization. In India the culture of silk was introduced in 400AD . modern textile industry took birth in India in the early

nineteenth century The first cotton textile mill of Bombay was established in 1854 during the year 1900 the cotton textile industry was in bad state

After independence, the cotton textile industry made rapidstrides under the Plans


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Five years outlook

222.0 304.2

7.8

24.3

3.5

8.0

100.0

200.0

300.0

400.0

2005 P 2010 P

USDB

illion

1.5

2.5

3.5

4.5

5.5

6.5

7.5

8.5

Percent

Total retail industtry Organised Penetration


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SWOT Analysis Strengths: Indian Textile Industry is an Independent & Self-Reliant

industry. Abundant Raw Material availability that helps industry to control

costs and reduces the lead-time across the operation. Availability of Low Cost and Skilled Manpower provides

competitive advantage to industry. Availability of large varieties of cotton fiber and has a fast

growing synthetic fiber industry. India has great advantage in Spinning Sector and has a

presence in all process of operation and value chain.


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SWOT Analysis Weaknesses: Indian Textile Industry is highly Fragmented Industry. Industry is highly dependent on Cotton. Lower Productivity in various segments. There is Declining in Mill Segment. Lack of Technological Development that affect the productivity and

other activities in whole value chain. Infrastructural Bottlenecks and Efficiency such as, Transaction Time at

Ports and transportation Time. Unfavorable labor Laws. Lack of Trade Membership, which restrict to tap other potential market. Lacking to generate Economies of Scale. Higher Indirect Taxes, Power and Interest Rates.


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SWOT Analysis Opportunities: Growth rate of Domestic Textile Industry is 6-8% per annum. Large, Potential Domestic and International Market.

Product development and Diversification to cater global needs. Elimination of Quota Restriction leads to greater Market

Development. Market is gradually shifting towards Branded Readymade

Garment. Increased Disposable Income and Purchasing Power of Indian

Customer opens New Market Development. Emerging Retail Industry and Malls provide huge opportunities

for the Apparel, Handicraft and other segments of the industry.

Greater Investment and FDI opportunities are available.


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SWOT Analysis Threats: Competition from other developing countries, especially China. Continuous Quality Improvement is need of the hour as there

are different demand patterns all over the world. Elimination of Quota system will lead to fluctuations in Export

Demand. Threat for Traditional Market for Powerloom and Handloom

Products and forcing them for product diversification. Geographical Disadvantages.

International labor and Environmental Laws. To balance the demand and supply. To make balance between price and quality.


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The shape of the textile industry in

India

Large Industry 3% of GDP, 27% ofForex earnings, 21% of total

employmentVery large unorganised sector about

76% of total fabrics production

Market is very diverse, does not lenditself to comparative studies in terms ofmarket share etc.


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The global scenario

The end of the MFA arrangement Competitiveness of Indian industry

Low level of modernization Fragmented nature low capacities Infrastructure, Labour laws

Exports have risen by 10% but at the sametime China

s exports have risen by more than

20%, even countries like Pakistan andBangladesh have done better


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Cont


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The light at the end of the tunnel China muzzledViable option for those looking to

spread out risk

Indian govt waking up Domestic market projected to grow as

well


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Major playersArvind MillsArvind Mills is one of the fully vertically

integrated players in India. It has large capacities in denim, shirting and

knitted garments.

Adding value by manufacturing denimapparel.

Its sales are around US$ 300 millions withlittle less than 9% profitability


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Raymonds Raymonds has the large integrated

business model, across the value chain

from yarn to retail. It already supplies to some US retailers. it second largest denim player in India. Its annual sales are around US$ 300millions with little less than 7 %

profitability.


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Vardhaman SpinningVardhman has capacities in spinning, weaving

and processing.

It is planning to double its fabric processingcapacity to 50 million meters.

It is an approved supplier to globalretailers like GaP, Target and Tommy Hilfiger.

Its sales are little over US$ 120 millions with6.5% profitability.


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Welspun India

Welspun is among the top five manufacturersof terry towels in the world

It sells its products in 24 countries It is supplier to retailers such as Wal-Mart, J C

Penny, and Shopko.

Its revenues are little over US$ 100 millionswith little less than 8%profitability.


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Conclusion

A huge window of opportunity has opened up for theIndian textile industry .

Various players need to get act together. Government is playing the role of facilitator by takingvarious majors. Its now for players to make investments in building

the capacities and making them integratedmanufacturers.

The industry enjoys significant strength andadvantages, such as availability of raw materials,labour, domestic market and supportive governmentpolicies.


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Thank you

Textile Industry in Developing Countries

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