INDUSTRY REVIEW ON TEXTILE SECTOR

OCEAN INDIA

Submitted By
NAME REGISTERED NUMBER
PRADEEP CHINTADA 1226113112


Submitted to
Dr. A V Rao
GITAM School of International Business, GITAM University, Visakhapatnam
Andhra Pradesh, India-530045


GITAM School of International Business,
GITAM University, Visakhapatnam








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INTRODUCTION:
Textile industry in India is the second largest employment generator after agriculture. It holds significant
status in India as it provides one of the most fundamental necessities of the people. Textile industry was
one of the earliest industries to come into existence in India and it accounts for more than 30% of the total
exports. In fact India textile industry is the second largest in the world, second only to china.
Textile industry is unique in the terms that it is an independent industry, from the basic requirement of raw
materials to the final products, with huge value addition at every stage of processing. Textile industry in
India has vast potential for creation of employment opportunities in the agriculture, industrial, organized
and decentralized sectors &rural and urban areas, particularly for women and the disadvantage. Indian
textile industry is constituted of the following segments: ready-made garments, cotton textiles including
handlooms, man-made textiles, silk textiles, woolen textiles, handicrafts, coir, and jute.
Till the year 1985, development of textile sector in India took place in terms of general policies. In 1985,
for the first time the importance of textile sector was recognized and separate policy statement was
announced with regard to development of textile sector. In the year 2000, national textile policy was
announced. Its main objective was to provide cloth of acceptable quality at reasonable prices for vast
majority of the population of the country, to increasingly contribute to the provision of sustainable
employment and the economic growth of the nation: and to compete with confidence for an increasing
share of the global market. The policy also aimed at achieving the target of textile and apparel exports of
US $ 50 billion by 2010 of which the share of garments will be US $ 25 billion.
Indian textile and apparel industry is one of the largest in the world with US$ 19 billion of export and US$
30 billion of domestic textile and apparel during 2006-07 (P). The industry has, over the years, contributed
significantly to national output, employment and exports. At present, industry accounts for about 14% of
our total industrial production and contributes to nearly 15% of total exports. It provides direct
employment to about 35 million people and another 56 million are engaged in allied activities. The textile
export has registered a growth of 10 percent to 19.24 billion during 2006-07 (P) from US$ 17.85 billion
during 2005-06. The Industry has a potential to reach a size of US$ 85 billion by 2010. With its consistent
growth performance and abundant cheap skilled manpower, there are enormous opportunities both for
domestic and foreign investors to make investments in textile sector in India.
STRENGTHS OF THE INDIAN TEXTILE INDUSTRY:
India has rich resources of raw materials of textile industry. It is one of the largest producer of
cotton in the world and is also rich in resources of fiber like polyester, silk , viscose
India is rich in highly trained manpower. The country has huge advantage due to lower wage rates.
Because of low labor rates the manufacturing cost in textile automatically comes down to very
reasonable rates
India is rich in highly competitive in spinning sector and has presence in almost all processes of the
value chain
Indian garment industry is very diverse in size manufacturing facility, type of apparel produced,
quantity and quality of out -put , cost, requirement for fabric etc. It comprises suppliers of ready
made garments for both, domestic or export markets.

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WEAKNESSES OF INDIAN TEXTILE INDUSTRY:
Indian Textile Industry is highly fragmented in industry structure, and is led by small scale
companies. The reservation of production for very small companies across the country, led
substantial fragmentation that distorted the competitiveness of industry. Smaller companies do not
have the fiscal recourses to enhance technology or invest in the high end engineering of
processes. Hence they lose in productivity.
Indian labor laws are relatively unfavorable to the trades and there is an urgent need for labor
reforms in India.
India seriously lacks in trade pact memberships, which leads to restricted access to the major
markets.
MARKET SIZE:
The Indian textile industry is set for strong growth, buoyed by both strong domestic consumption as well
as export demand. Abundant availability of raw materials such as cotton, wool, silk and jute and skilled
workforce has made India a sourcing hub. The most significant change in the Indian textile industry has
been the advent of man-made fibers (MMF). India has successfully placed its innovative range of MMF
textiles in almost all the countries across the globe. MMF production increased by 6 per cent during
December 2013. The production increased by about 4 per cent during the year April-December
2013.Cotton yarn production increased by 6 per cent during December 2013 and by 10 per cent during
April-December 2013. Blended and 100 per cent non-cotton yarn production increased by 5 per cent
during December 2013 and increased by 8 per cent during the year April-December 2013. Cloth
production by mill sector increased by 4 per cent during December 2013 and by 6 per cent during April-
December 2013. Cloth production by handloom, and hosiery increased by 3 per cent and 11 per cent
respectively during December 2013. Production by handloom, and hosiery sectors increased by 4 per cent
and 13 per cent during April-December 2013. The total cloth production grew by 2 per cent during April-
December 2013.The potential size of the Indian textile and apparel industry is expected to reach US$ 221
billion by 2021, according to Technopak's Textile and Apparel Compendium 2012. Garment exports from
India is expected to touch US$ 60 billion over the next 3 years, with the help of government support as of
from Apparel Export Promotion Council (AEPC).
INVESTMENTS:
The textiles sector has witnessed a spurt in investment during the last five years. The industry (including
dyed and printed) attracted foreign direct investments (FDI) worth Rs 6,428.18 crore (US$ 1.03 billion)
during April 2000 to November 2013.
SOME OF THE MAJOR INVESTMENTS IN INDIAN TEXTILE INDUSTRY ARE:
Sutlej Textiles and Industries, one of the largest yarn, fabric, garments and home textiles
manufacturers in India plans the expansion of its Jammu and Kashmir (J&K) manufacturing unit
with an investment of Rs 1.75 billion (US$ 28.10 million).
Superdry plans to open 20 stores in India over the next five years, as per Mr James Holder,
Founder, Superdry
The Aditya Birla Group has signed an in-principle agreement to buy the assets of Ontario-based
Terrace Bay Pulp Mill for Rs 605 crore (US$ 97.14 million). The acquisition would be carried out
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through AV Terrace Bay (Canada), a special purpose vehicle (SPV) in which two group
companies, Grasim Industries and Thailand-based Thai Rayon Public, would hold stake
Tommy Hilfiger plans to add 500 stores in India over the next five years as part of their expansion
spree
Canclini Tessile plans to tie up with Tirupur-based Emperor Textiles to stitch its shirts in India.
The equal joint venture (JV) with Emperor Textiles will set up a separate manufacturing unit in
Tirupur to manufacture Italian fabric for domestic consumption.
GOVERNMENT INITIATIVES:
The Government of India has promoted a number of export promotion policies for the Textile sector in the
Union Budget 2011-12 and the Foreign Trade Policy 2009-14. It has also allowed 100 per cent FDI in
textiles under the automatic route. Due to policy measures initiated by the Government in the recent past,
the Indian textiles industry is in a stronger position than it was in the last six decades. The industry which
was growing at 3-4 percent during the last six decades has now accelerated to an annual growth rate of 8-9
per cent in value terms. The Government has also allowed 100 per cent FDI in the sector through the
automatic route. In the 12th Five Year Plan (201217), the government plans to spend US$ 9.1 billion on
textiles as against US$ 4 billion in the 11th Plan.
PROFILE OF THE COMPANY:
Brandix India Apparel City one of the planned six integrated textile park in the country set up with central
government support has been inaugurated in Vizag in Andhra Pradesh. The Andhra Pradesh government
has allotted 1000 acres of land in the SEZ while the central government has provided Rs.360 million under
the Union textile policy. Currently Brandix Apparel India and Ocean India (US) have already commenced
exports, four other units are at different stages of completion. The BIAC city will have 20 textile units- 3
fabric mills, 8 accessories units and one finishing plants. The city is likely to attract to investment of over
Rs-54000 million. Some of the companies who have evinced interest Fountain Set Holdings of Hong
Kong. Pioneer Elastic India Quantum Clothing Indi (UK). DEB Fashion India and Seeds Intimate Apparel
India.


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OCEAN INDIA :
Knit fabric manufacturing mill - Use the most advanced technology to deliver the best knitted
fabric with in short period of time.
75 acre plot with a 520 Meter length.
Floor area of 400 square feet for a seamless movement of raw materials which is processed
through high tech departments.
Subsidiary business unit of Brandix Lanka Ltd.
Started operation by June 2008 with an initially investment of US$ 20 million.
Today our turn over is US$ 38 million with production capacity of 40,000 Tons.
Facilitate Fabric requirement to the park and other regions.
Headquarter in Vizag and Business Development Office in Sri Lanka (Colombo) with an
employee strength of 750 (Executive 131 & Associate Cadre 619)
The OCI portfolio includes :
Single Jersey
Rib Fabrications
Interlocks
Pique/Lacoste
Fleece
French Terry
Jacquard Jersey
CLOVER GROUP OF- CHINA:
Founded in1956, Clover Group Is one of the leading manufacturer of intimate lingerie for numerous
prestige brand labels throughout North America and Europe. Our production complexes are located in
china and Cambodia with workforce over 7,000.For the past half century; we aim to keep abreast with the
industry transcendence from being a basic functional requirement into a bodice enhancement. Clover
Group has always maintained its posture and embraced the challenges ahead even facing the ever
changing needs and behavior of customers.
BRANDIX GROUP SRILANKA:
Brandix Lanka Ltd is the largest exporter of apparel in Sri Lanka.As the holding company of the Brandix
group of companies, it is engaged in developing, manufacturing and marketing end-to-end apparel
solutions to global fashion super brands. A peek into an exclusive portfolio reveals Victorias Secret, Gap,
Next, Mark and Spencer , Liz Claiborne, Abercrombie and Fitch, amongst other excellent company.
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Sri Lankas single largest apparel exporter with an annual turnover exceeding USD 600 million
Employing over 43,000 Associates and generating indirect employment to an equivalent number
Supported by 38 manufacturing facilities in Sri Lanka, India & Bangladesh and strategically
located international Sourcing Offices
Providing over 50% of value addition locally through our backward-linked operations in textiles,
buttons and hangers

How supply chain management related to Brandix:
Managing the production of the company's good and services, monitoring. storage. inventories.
coordinating with suppliers and ensuring timely contribution of goods are some of the key functions
covered by supply chain management. The supply chain is actually made up of five important components
of plan, source, make and deliver, return. It also includes three flows which are cash, product and
information within the chain. Through these components and members, the Brandix management of the
supply chain allows efficient inventory control. As a dynamic process. the SCM requires the continuous
exchange of information. finance and materials between and within the members of the chain. These
elements of the SCM also make this business aspect challenging to implement and maintain.
FOREIGN DIRECT INVESTMENT:
India has most liberal and transparent policies in Foreign Direct Investment (FDI) amongst emerging
countries. India is a promising destination for FDI in the textile sector. 100% FDI is allowed in the textile
sector under the automatic route. FDI in sectors to the extent permitted under automatic route does not
require any prior approval either by the Government of India or Reserve Bank of India (RBI). The
investors are only required to notify the Regional Office concerned of RBI within 30 days of receipt of
inword remittance. Ministry of Textiles has set up FDI Cell to attract FDI in the textile sector in the
country.
The FDI cell will operate with the following objectives:
To provide assistance and advisory support (including liaison with other organizations and State
Governments);
Assist foreign companies in finding out joint venture partners;
To sort out operational problems;
Maintenance and monitoring of data pertaining to domestic textile production and foreign
investment.
The sector is targeting US$ 6 billion foreign direct investment (FDI) by 2015 to be invested in textiles
machinery, fabric and garment manufacturing, as well as technical textiles. The expected growth of Indian
textiles industries will be worth about $220 billion by in the year 2020.
The investment scenario is becoming rise day by day, India is a growing source of supply of textiles and
apparel to the world market, the exports are growing rapidly as more and more buyers around the world
turn to India as an alternative to China. India has enormous opportunities to expand their share in Textiles
and Apparel industries. International scenario does indicate favorable business atmosphere in India, FDI
Inflows to Textiles industry in India enhanced the growth of the sector. India has been known for its
textiles all over the world. The Indian textile industry contributes about 14 % to industrial production, 3 %
to the country's Gross Domestic Product (GDP) and 27 % to the country's total foreign exchange.
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Major Players:
The textiles industry comprises both organized and unorganized or decentralized sectors. The sub-sectors
working in an organized way are Composite mills, Combing units, Worsted and non-worsted spinning
units, Knitwear and woven garment units and Machine-made carpet manufacturing units. On the other
hand, the sub-sectors working in an unorganized or decentralized way are Hosiery and knitting units,
Power-loom units, Hand-made carpets &drug gets units and Independent dyeing and process houses. Key
big Indian players in the Indian textile industry include SRF, EntremondePolycoaters, Kusumgarh
Corporates, Supreme Nonwovens, Aravind Mills, Garware Wall Ropes, Century Enka, Techfab India,
Ahlstrom, Pacific Non Woven, Vardhman and Unimin.
Key foreign players include Johnson & Johnson, Du Pont, Procter & Gamble, 3M, SKAPs and Kimberly
Clark. Several international retail players, such as Marks & Spencer, Haggar Clothing, Kellwood, Little
Label and Boules Trading Company, are also using India as a key global sourcing destination.
Government has also been facilitating setting up of various SEZs across India in the textiles sector. For
instance, formal approval has been given to these SEZs in the sector Brandix India Apparel City Private
Limited (BIAC), Visakhapatnam; MAS Fabric Park (India) Private Limited (MFP), Nellore; Deccan
Infrastructure and Land Holdings Limited, Akutotapally, Alok Infrastructure Private Limited, Silvassa
WelspunAnjar SEZ Limited, Gujarat; Pradip Overseas Limited, Ahmedabad Orient Craft Infrastructure
Ltd, Gurgaon; KIADB, Hassan; Maharashtra Industrial Development Corporation Ltd., Maharashtra;
Ishan Developers & Infrastructure Pvt. Ltd., Amritsar; RNB Infrastructure Pvt. Ltd., Bikaner; ETL
Infrastructure Services Ltd., Erode; and Uttar Pradesh State Industrial Development Corporation
(UPSIDC), Kanpur.
Input Cost:
The cost of production is one of the major factors in determining international competitiveness. Price of
land, price of labor, hours worked, energy cost, building cost, transport and taxation constitute some of the
key inputs for production. India faces fierce competition from Bangladesh, Cambodia, China and Pakistan
in these cost factors. We need to improve upon these factors in order to improve our productivity and
thereby increasing exports.
Factory Operations:

Challengers and issues:
Shrinking lead times: Brandix identified rapidly shrinking lead times as one of the biggest challenges for
the apparel industry. The growing demand for 'instant gratification' by trend-driven consumers could result
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in manufacturers being given hours rather than days to deliver new designs within the next 18 to 24
months. Increasing no of style changers When there is new style for manufacturing plant they take some
learning curve to conic high efficacy level. Because this situations op rations side can't do manufacturing
products in high efficacy. Not enough rapacity for own raw material suppliers Brandix own raw material
producers can't supply total garment manufacturing capacity of brandix. It has to import raw materials
from foreign suppliers. It manly effect to our value chain. As an example if import yarn and our factory
produce fabric mean can add some ting to our value chain. In this fabric mils low capacity problem we had
to export fabric from our suppliers it effect to our value chain.
Poor flow of information
Poor Flow of information in both forward and backward in the supply chain and with the customers'
requirements. information and specifications may not pass to manufacturer/ suppliers and quality issues of
the raw materials also not been informed to suppliers. Sometime above details not pass within group
suppliers also. So suppliers are able to send anything they produce as they do not get any feedback.
Demand forecasting problems :
Poor demand forecasting. here is an issue in production planning and as result delivery are not met on
time. Some raw materials such as packing trims are not in housed on time and unfinished goods are
remaining at packing.