Textile Industry Operations
Submitted by:
Priyanka Beriwala (3)Shivam Dixit (13)Jackson Jose (23)Srujan Maddula (33)Yash Parikh (43)Saurabh Sharma (53)Aakash Tyagi (63)
Global Scenario
• Textile sector is valued at 437bn USD
• Falls under sensitive category due to Deflation in commodity prices Currency depreciation in emerging markets Poor economic prospects in Brazil and Russia China’s shift towards a services economy
Global Scenario
Strengths
• Resilient long-term demand thanks to rising middle classes in emerging markets
• Steady supply cost thanks to higher resort to man-made fibers, whose prices are less volatile than those of cotton or wool
Global Scenario
Weaknesses
• Profitability undermined by volatile raw material prices and rising wages • Fierce competition weighing on margins and further stress by e-
commerce activities • Changing consumer behavior forcing the T&C to become more flexible • Even though India is a giant in the world textile markets, China has an
advantage when it comes to Mass production
Global Scenario
China #1Producer #1Exporter
Italy #2Producer
#2Exporter
India #3Producer
#3Exporter
Key players
Global Scenario
India vis-à-vis Other Competitors
• Industry Structure• FDI• Trade Agreements• Cost and Availability of Raw Material, Manpower and Technology• Total Process Time• Technological Processes and Innovation
National Scenario
It can be divided into two main segments:
1.) Unorganized Sector
2.) Organized Sector
National Scenario
• India’s Textile and Apparel industry - country’s oldest second only to agriculture.• Second largest producer of cotton in the world and largest producer
of jute in the world.• 4% contributor to GDP• 11 % contributor to export earnings• Major Employment generator in India• 25% of world's spinning capacity
National Scenario
Sections in Indian Textile Industry:
• Man Made Fiber• The Cotton Sector• The Hand-loom Sector• The Woolen Sector• The Jute Sector• The sericulture and Silk Sector
Indian textiles
Raw material baseLabour
FlexibilityRich Heritage
Domestic market
Increasing dependence on cotton
Low Labour ProductivityPoor Infrastructure
Ever growing industryUse of IT in the field
Market access through bilateral negotiation
Rapid changes in Fashion CycleConservatism in India
Formation of Trading Blocks
SWOT
Case Study
Challenges
• Heavy competition • Fall of operating margins• Brand growth had slowed down • Great financial losses• Cost of doing business increasing • Stakeholders did no longer want to associate with the brand
Solutions
•Simplified the company structure - breaking down into customer-centric divisions rather than product-centric verticals•Divesting or shutting down of non-core parts of the business•Raymond shut down low-cost fabric brands while selling off carpets, curtains, upholstery businesses.•Outsourced the Raymond’s IT domain to Accenture •Drop in workforce by a fifth•Raymond then shifted focus on brand positioning and underwent renovation.
Benefits• Stock has doubled outpacing the Sensex's rise of 34%.
• Revenue has grown 37% and profits more than tripled.
• Raymond is back to being a venerated company
Major PlayersVardhman Textiles
• Dedicated Sourcing Teams
• Quality assurance – 100% on cotton texting, 5-10% bale testing
• Large inventories for instant production
• Complete Vertical Integration
• Power Independence
Major PlayersArvind Mills
• Constant diversification and expansion
• Sanjay Lalbhai’s Reno-vision
• Currently in JVs with Tommy Hillfiger, Calvin Klein, Nautica, Billabong, Debenhams, Hanes etc.
Good/ Ailing industries• Heavy FDI inflow – last 5 years 1.85 Billion USD
• 100% FDI in textiles
• Export promotion policies
• Union Cabinet – Rs. 6000 crore package to bring in investments worth Rs. 74,000 crores and generating 10 million jobs
Ailing industries
• Chinese advantage of mass production
• Requirement of infrastructural changes and Capex
Industrial Visit
YarnTwistin
gDyeing
Testing
Weaving
Warping
Thank you