TÀI LIỆU TIẾNG ANH NGÀNH CÔNG NGHỆ MAY - SETTING UP OF a GARMENT INDUSTRY

SETTING UP OF A GARMENT INDUSTRY SSAD SETTING UP OF A GARMENT  INDUSTRY Submitted By: Dilip Singh Kumar Sarvesh Rajeev Sharan A.P.­04(D.F.T.) NIFT BANGALORE/ A.P. (DFT)/2008­12 STRUC STR TURED UCT SYSTE URE M D ANALY SYST SIS & EM DESIGN ANA [Type your address]LYSI [Type your phone S& number] [TypeDESI your email address] GN SETTING UP OF A GARMENT INDUSTRY CONTENTS • INTRODUCTION       • • Stages of Business Development Objectives of the Project Scope of the Project Benefits of the Project SWOT Analysis Terms Used in Foreign Trades Market Analysis  COMPETITIVENESS OF INDIAN APPAREL EXPORT FIRMS  CARPORATE MARKET  INITIATIVES TAKEN BY THE GOVERNMENT TO MAKE THE INDUSTRY GLOBALLY COMPETITIVE  LARGEST MARKETS  TARGETED TRADING COUNTRIES   DILIP SINGH KUMAR SARVES H RAJEEV SHARAN  TARGETED CUSTOMERS  EXPORT GROWTH IN INDIA  SHARE OF TEXTILE & CLOTHING EXPORTS IN INDIA’S TOTAL EXPORTS  SHARE OF EXPORTS OF VARIOUS CLASSIFIED SECTORS  HIGHEST EXPORTS FROM TEXTILE SECTOR  INDIAN GARMENT INDUSTRY - CURRENT ENVIRONMENT & FUTURE PROSPECTS  INDIA’S SHARE IN WORLD TRADE  APPAREL EXPORT GROWTH IN INDIA  TRENDS IN INVESTMENT AND PRODUCTION  TRENDS IN EXPORTS: HOW DOES INDIA FARE?  SUPPORTIVE GOVERNMENT POLICIES AND NEW TRENDS TOWARDS  NEW TRENDS TOWARDS RE-EMERGENCE OF THE TEXTILE AND APPAREL SUBSECTORS IN INDIA  FURTHER STEPS REQUIRED TO INCREASE INDIA’S COMPETITIVENESS  ANALYSIS ON OVERSEAS MARKET DEMAND OF JACKET INDUSTRY Workflow in Departments   Merchandising Department Sampling Department NIFT BANGALORE/ A.P. (DFT)/2008­12 SETTING UP OF A GARMENT INDUSTRY           • PRODUCTS TO BE MANUFACTURED  • • • Machinery Lay-out for Sewing room Machinery Lay-out for Collar, Cuff, Pocket, Button and Button Holing Basic corporate information and industry Financial Information Technical Capability Technical Proposal  Product Description COST ESTIMATION            • Plant Layout MACHINERY LAY-OUT IN SEWING   • • • • Product specification of jackets  Product Specifications for Men’s Long Sleeve Shirt PLANT LOCATION  • Purchase Department Store Department Pattern Making Department Cutting Department Sewing Department Finishing Department Flowchart Explaining Workflow in Departments Trims and Accessory Department Flowchart Showing the Ideal Working of Fabric Department Spreading department Labour FACTORY SUPERVISION OFFICE /ADMINISTRATION Machinery POWER Raw materials TOTAL COST OF THE PROJECT Calculation of Interest on Bank Loan Estimation of Depreciation Cost Quotation to Customer Calculation of Break Even Level Request For Proposal   Benefits of requests of proposal Specifications RESULTS AND DISCUSSIONS  Export contribution  Export growth  Export Development in India  Improved Plant layout  Modified Sewing Layout  Cost Estimation  Feasibility of the project NIFT BANGALORE/ A.P. (DFT)/2008­12 SETTING UP OF A GARMENT INDUSTRY • FURTHER  DEVELOPMENTS • CONCLUSION INTRODUCTION India is a country of opportunities and after the economic reforms of 1991 the world market has got wide open for India in all trades especially for the business in export In NIFT BANGALORE/ A.P. (DFT)/2008­12 SETTING UP OF A GARMENT INDUSTRY such a scenario opening a garment export house is a very wise thing to India is a good place for textile and apparel industry as here we have abundant availability of cotton which is the primary requirement for apparel industry, labour comes cheap in India be it skilled or unskilled which considerably reduces the cost of production and hence attracting a lot of international business houses which sense an increased amount of profit in countries like India which over the years have made India a sourcing hub be the material based industries such as apparel or knowledge based industry such as IT and telecommunication This project has been designed keeping in mind the huge potential of India in the apparel export industry and utilise this potential to the optimum level possible Stages of Business Development Business idea generation Business plan preparation Start-up and growth Established company Interest of market Financing decisions Objectives of the Project - - To utilize the potential of india in the apparel industry to the optimum level To set up a new garment export company with an initial production target of four lakhs shirts per with an installed capacity of six lakhs shirts per annum and 1lakh jacket per annum To provide employment to a number of people thereby to develop their life styles - To develop the economy of the country by earning foreign exchange Scope of the Project After the economic reforms of 1991 the export has played a very important part in the growth of the economy of the country Export has considerably flourished in India be it the services and knowledge based sectors such as IT, telecommunication and BPO or NIFT BANGALORE/ A.P. (DFT)/2008­12 SETTING UP OF A GARMENT INDUSTRY material based industries such as textiles textiles is one the major foreign exchange earner for India in that apparels make a very considerable amount of contribution A garment export house set up keeping in mind this project if managed anrd run properly is sure to gain a considerable amount of foreign exchange for the country and provide employment to a large number of people in the country With the growth and devlopement in the industry ther will be visible contribution in the economy of the country Benefits of the Project 1.Cash assistance 2.Tax concessions 3.Financial assistance 4.Special assistance to export oriented industries 5.Import benefits 6.Foreign exchange 7.Freight concessions 8.Special concessions to small scale industries 9.Awards for exporters 10.Insurance against risks 11.Raw material allocation 12.Duty draw-backs 13.Transport Concessions Cash Assiatance Cash assistance is allowed on export of selected products to meet the international price competitions With these assistances, exporters can sell their products in foreign market on lower price than the price prevailing in the domestic market even less than their cost price The assistance is available only for the registered exporters of approved products Tax Concession Exporters are entitled to many concessions in respect of the income tax, sales tax, excise duty, import duty and export duty etc Financial Assistance Finance in the form of advance or loan is available for export from the Commercial Banks, Industrial Development Bank of India (IDBI), Reserve Bank of India (RBI), Export Credit And Guarantee Corporation (ECGC) and State Bank of India (SBI) etc The State Trading Corporation (STC) also provides assistance to exporters The Banks also make payments against letter of credit (L/C) money in advance against export documents and packing credit facility is also provided to the exporters NIFT BANGALORE/ A.P. (DFT)/2008­12 SETTING UP OF A GARMENT INDUSTRY Special Assistances to Export Oriented Industries Export oriented industries are given special assistances in respect of the following 1.Free permission to have foreign collaboration 2.Permission for increased capacity of production than the licensed capacity 3.Preference in obtaining industrial license for various types 4.Priority in importing capital equipments, machinery, spares and raw materials etc 5.Priority for further expansion of the industry 6.Indigenous raw materials are made available to the exporters Imports Benefits Registered exporters can get the benefits of replenishment of import contents like raw materials, accessories, spares etc against export of the product and can apply for import license against exports of specified products Foreign Exchange Exporters can obtain blanket permits of foreign exchange on the minimum export ofRs.5,00,000 in the case of non-traditional goods and Rs.25,00,000 in the case of the traditional goods like jute etc Exporters can also import samples under the blanket foreign exchange scheme Freight Concessions Concessional Railway freight is allowed on the movement of a large number of export products from their centers of productions to the ports of shipment Cash assistance is given against exports of some goods by air to compensate the high freight Special Concessions to Small Scale Industries Special facilities and concessions available to small scale industries in respect of finance, procurement of raw materials, marketing of products and imports Awards for Exporters Exporters with the outstanding export performance are eligible for award by the Government of India The work relating to the product development, exploration of difficult and new markets and distinct contribution in any of the exports fields are taken into consideration for the grants of these awards 10 Insurance Against Risks Export involves a number of risks The buyers may default or they go bankrupt There may be victim of war and quake which may wreck his fortunes There may be NIFT BANGALORE/ A.P. (DFT)/2008­12 SETTING UP OF A GARMENT INDUSTRY some import restrictions Goods sent by ship might be lost in the course of transit etc.Exporters can easily pass all the burden of such types of risks to the Export Credit Guarantee Corporation (ECGC) for a modest premium 11 Raw Material Allocation Arrangements for prompt and proper supplies of selected indigenous raw materials for manufacturing units producing goods for export have been provided 12 Duty Draw-backs When a product is exported, it is entitled to (a) Wavier or rebate of the central excise duty payable on the export products, and (b) Draw-backs of the whole of the customs and central excise duties paid on raw materials and components used in the manufacture of the export products 13 Transport Concessions The railway allows concessions of two kinds One in the priority in the movement of goods and the other rebate in the rail freights The priority in the movement is available for the raw materials required for the manufacture of articles for export available, for the packing material, special priority label printed and distributed by the Ministry of Commerce can be pasted on the wagon doors carrying export cargo so as to ensure speedy movement SWOT Analysis Strengths o Abundant availability of cotton in India o Cheap labour availibity of skilled labours o Capability in product development o Rich cultural heritage and immense diversity NIFT BANGALORE/ A.P. (DFT)/2008­12 SETTING UP OF A GARMENT INDUSTRY Weaknesses o Cotton production depends largely on rain o Small scale nature of the industry o Lack of expansion of the units o Lack of technological up-gradation o Delayed lead time o Infrastructural problems o Investment and technology o Lack of exact marketing information o Unbalanced sector wise (spinning, weaving and processing) developments Opportunities 3 o Falling market share of the newly entered countries o Multi fiber agreement phase out o Backward integrated production in knit sector o Increasing wage rates of competing countries o Dissatisfaction of USA / EU with China in certain aspects o Accelerated export effort Threats o Competition and pressure on price and quality due to multi fiber agreement phase out o Newly developing competing countries like Vietnam and Bangladesh o Unbalanced sector wise investments and developments o No balancing between large and small scale sectors NIFT BANGALORE/ A.P. (DFT)/2008­12 SETTING UP OF A GARMENT INDUSTRY Terms Used in Foreign Trades Place and Mode of Delivery Place where the buyer has to take the possession of the goods either by means of physical delivery (directly receiving the goods) or constructive delivery (receiving the documents like bills of lading or Railway receipts etc, which represent the goods) Transport charges, Packing etc Normally these charges will be collected from buyers only and some times paid by the seller also Insurance against Risks involved in Transit NIFT BANGALORE/ A.P. (DFT)/2008­12 10 Button hole/Button m/c operator 3000.00 24,000.00 Pocket creaser, collar/cuff turner 2000.00 14,000.00 Fusing m/c operators 3000.00 6,000.00 Cutting m/c operators 3500.00 14,000.00 Ironers 11 2000.00 22,000.00 Packers 3000.00 15,000.00 Garment checkers 11 2000.00 22,000.00 Fabric checkers – skilled 2500.00 5,000.00 Fabric checker – semiskilled 1800.00 9,000.00 Helpers 50 1500.00 75,000.00 Layers 2000.00 12,000.00 Store keepers 4000.00 8,000.00 Washing Assistant 3000.00 3,000.00 Mechanics 3000.00 6,000.00 Electrician 2500.00 5,000.00 Office boys 1500.00 6,000.00 Watch and Ward 1500.00 6,000.00 Sweepers 1500.00 6,000.00 Total Direct Labour cost per month 8,17,000.00 Additional Benefits @ 15% 1,22,550.00 Total Direct Labour cost per month including Benefits 9,36,550.00 Total Direct Labour cost per Annum including Benefits 1,12,69,200.00 Total Direct Labour cost per Annum including Benefits = 112.692lakhs FACTORY SUPERVISION Category of Staffs No of staffs Salary per staff Total in Rs Production Manager 25,000.00 25,000.00 Cutting Master 12,000.00 12,000.00 Q.C.Incharge 8,500.00 8,500.00 Washing Incharge 7,500.00 7,500.00 Supervisor 7,000.00 63,000.00 Factory Supervision cost per month 1,16,000.00 Additional Benefits @15% 17,400.00 Total cost of Factory Supervision per month 1,33,400.00 Total cost of Factory Supervision per Annum 16,00,800.00 Total cost of Factory Supervision per Annum = 16.008 lakhs OFFICE /ADMINISTRATION Category of Staffs No of staffs Salary per staff Total in Rs Accounts/Admn Manager 18,000.00 18,000.00 Assistants 20,000.00 40,000.00 Export/Import Manager 28,000.00 28,000.00 Office Assistants 8,000.00 16,000.00 Fabric Merchandisers 25,000.00 50,000.00 Garment Merchandisers 17,000.00 34,000.00 Total Salaries per month 2,42,000.00 Additional Benefits @ 15% 36,300.00 Total Salaries per month including Benefits 2,78,300.00 Total Salaries per Annum including Benefits 33,39,600 Total Salaries per Annum including Benefits = 33.396lakhs Machinery Estimation of Machinery Required and Cost Estimate Details of Machine Quantity Cost per M/c in US$ Single Needle Lock Stitching m/c [Juki DDL-5530N] 102 Nos 460.00 Total Cost In US$ 46920.00 Double Needle Lock Stitching m/c [Juki LH-3168SF] 56 Nos 1850.00 103600.00 Feed of Arm Machine [Juki MS-1190MF] Nos 1950.00 13650.00 Overlock Machine [Juki Mo-3316E DE4-40H] No 900.00 900.00 Button Holing Machine [Juki LBH-781U] Nos 2700.00 10800.00 Button Sewing Machine [Juki LK-1903SS/304/MC-590-3K] Nos 3850.00 15400.00 Fusing Machine [Hashima HP-400CS] No 3510.00 3510.00 Pneumatic Pocket Creasing m/c Nos 4320.00 8640.00 Collar Turning Machine [TSSM TS-414] Nos 900.00 1800.00 Cuff Turning Machine [TSSM TS-424] Nos 900.00 2700.00 Edge Cutter [Eastman EC-3] Nos 450.00 900.00 Straight Knife Cutter [Eastman 629 X 8”BS-11] Nos 1125.00 3375.00 Banned Knife Cutter [Wastema] No 12000.00 12000.00 Cloth Drill [Eastman CD-3-6”] No 800.00 800.00 Total value in us dollars 224995.00 Total Value in Indian Rupees @ Rs.47 per dollar Details of Machine Testing Equipments 10574765.00 Quantity cost per m/c in Total in Rs Rs set 500000.00 Ironing Table Set-ups [Ramsons] 10 sets 25900.00 259000.00 Fabric CAD with Scanner/printer set 75000.00 75000.00 Clothing CAD with Plotter set 475000.00 475000.00 Washing m/c (100kg ) with Hydro Extractors (50kg) & Driers (50kg) set 1800000.00 1800000.00 300.00 6000.00 Hand Scissors 20 Nos Total Cost for Machinery in Indian Rupees = 1,36,89,765.00 [136.897] lakhs] 11.4 Others (Furniture etc) Trolleys for Material Handling 55000.00 Plastic Bins 42000.00 Cutting Table/Assorting Table/Checking Tables 48000.00 Other Furniture 50000.00 Total Cost for Furniture etc in Indian Rupees = 1,95,000.00 [1.95 lakhs] POWER Calculation of Power Requirements and Power Cost Description of the Machines Quantity Power Consumption per machine Single Needle Lock Stitching m/c [Juki DDL-5530N] 102 Nos 1/3 horse power 25840 Double Needle Lock Stitching m/c [Juki LH-3168SF] 56 Nos 1/3 horse power 14672 Feed of Arm Machine [Juki MS-1190MF] Nos 1/3 horse power 1733 Overlock Machine [Juki Mo-3316E DE4-40H] No 1/3 horse power 247 Button Holing Machine [Juki LBH-781U] Nos 270 watts 1080 Button Sewing Machine [Juki LK-1903SS/304/MC-5903K] Nos 270 watts 1080 Fusing Machine [Hashima HP-400CS] No 800 watts 800 Pneumatic Pocket Creasing m/c Nos 800 watts 1600 Collar Turning Machine [TSSM TS-414] Nos 400 watts 1600 Cuff Turning Machine [TSSM TS-424] Nos 400 watts 800 Edge Cutter [Eastman EC-3] Nos 370 watts 740 Straight Kife Cutter [Eastman 629 X 8”BS-11] Nos 370 watts 1110 Banned Knife Cutter [Wastema] No 1000 watts 1000 Cloth Drill [Eastman CD-3-6”] No 270 watts 270 Pressing Eqipments including Vaccum etc Total power consumption in watts 10000 Washing machine, Hydroextractor and Drier etc Others including Lighting etc Total Power Consumption in 12000 4500 79072 watts power consumption ( 79.072X X 300 units) = 189772.8 kilowatts Annual Power Cost @ 100% Efficiency (189772.8 X Rs.5.5) = Rs 10.437lakhs Annual Power Cost @ 60% Efficiency (113863.68 X Rs.5.5) = Rs 6.26 lakhs Raw materials Installed production capacity = 4,00,000 pcs per annum @ 60% Efficiency Fabric Required @ 60% efficiency = 4,00,000 X 2.30 mts = 9, 20,000 mts Fabric Cost @Rs 54/- per mtr = 9, 20,000 X 54.00 = Rs 5, 52, 00,000.00 Interlinings, Trims and Accessories@Rs.10 per pc = 4, 00,000 X 10 = Rs 40, 00,000.00 Packing materials@Rs.4 per pc = 4, 00,000 X = Rs 16, 00,000.00 Total Raw Materials Cost = 552+40+16 = 608 lakhs Total Raw Materials Costs per Annum = 608 lakhs@ 60% Efficiency Debtors - Direct Labours = 112.692 lakhs - Factory Supervision = 16.008 lakhs - Admn Salary = 33.396 lakhs -Total Debtors = 162.096 lakhs Expenses - Consumables - Power - Repairs & Maintce - Admn Overheads - Selling Overheads = 2.07 lakhs = 6.26 lakhs = 5.05 lakhs = 1.00 lakh = 2.00 lakhs -Total expenses = 16.38 lakhs Total Working Capital per Annum = 608+ 162.096+ 16.38 = 786.476 Marginal Working Capital for Two Months = 786.476 / = 131.08 lakhs Working Capital Margin for Two Months = 131.08 lakhs TOTAL COST OF THE PROJECT Particulars Rs in lakhs LAND 90.00 BUILDING 231.50 MACHINERY 136.897 FURNITURES ETC 1.95 ELECTRICALS/GENERATOR 4.00 TRANSPORTS/ERECTION 4.00 PRE-OPERATIVE EXPENSES 2.03 WORKING CAPITAL (2 MONTHS) OTHER MISCELLANEOUS ASSETS TOTAL 131.08 5.60 607.057 TOTAL COST OF THE PROJECT = 607.057 LAKHS FINANCIAL ARRANGEMENTS PARTNERS CAPITAL = 157.057 LAKHS BANK LOAN T OTAL = 450.00 LAKHS -= 607.057 LAKHS Calculation of Interest on Bank Loan ( Rs in lakhs) Year Opening Mid year Closing Interest @ 12% per Annum Balance Balance Balance Upto mid year Mid year to Year end Total 450.00 450.00 450.00 27.00 27.00 54.00 450.00 420.00 390.00 25.20 23.40 48.60 390.00 360.00 330.00 21.60 19.80 41.40 330.00 300.00 270.00 18.00 16.20 34.20 270.00 240.00 210.00 14.40 12.60 27.00 Note : It has been considered that the loan amount of 375 lakhs is to be repaid from the second year in 15 equal installments of Rs 30 lakhs by every six months Estimation of Depreciation ( Rs in lakhs) Particulars Cost of the Items Transport/Erection Machinery Building Others 136.897 231.50 15.55 0.80 0.20 Contingencies Total 137.697 231.50 % Depreciation 25% 7.5% 10% Year-1 34.42 17.362 1.575 Total-dep of year-1 103.277 214.138 13.975 Year-2 25.819 16.06 1.397 Total-dep of year-2 77.458 198.078 12.578 Year-3 19.364 14.855 1.2578 Total-dep of year-3 58.094 183.223 11.320 Year-4 14.523 13.741 1.132 Total-dep of year-4 43.571 169.482 10.188 12.711 1.018 Year-5 10.892 1.00 -15.75 Note : Calculation based on Straight line method Cost Quotation to Customer Amt in Rs Fabric 2.30 mts x Rs.62 per mtr Interlinings, Trims and Accessories Packing Materials Cut Make Trim & Overheads = 142.60 = 15.00 = 5.00 = 32.00 Total Annual Depreciation Based on the Straight Line Method 53.357 43.276 35.477 29.396 24.621 Washing Cost and Freight = = 3.00 15.00 -Total Add profit 15% -Total -Cost per garment = Rs 244.50 = 212.60 = 31.89 = 244.49 Note : In this we have considered a good Quality, cone dyed power loom fabric of 2/40’s warp and 20’s weft with 60 ends per inch and 56 picks per inch Calculation of Break Even Level (Rs In lakh) No Year Variable Costs (a) Raw Materials 608.00 674.00 740.00 (b) Consumables 2.07 2.42 2.76 (c) Power 6.26 6.84 7.81 (d) Selling Overheads 2.00 2.10 2.20 777.00 777.00 2.94 2.94 8.30 8.30 2.32 2.43 790.56 790.56 752.77 (e) Total Variable Costs[Add (a) to (d)] 618.33 685.36 1283.625 (f) Total Sales 978 1100.25 1222.50 1283.625 (g) Total Contribution[(f)-(e)] 359.67 414.89 469.73 493.065 493.065 Fixed Costs (h) Direct Labour 92.692 102.54 110.74 119.60 129.17 (i) Factory Supervision 13.82 14.93 16.12 17.41 18.80 (j) Admn Salary 8.06 8.70 9.40 10.15 10.96 (k) Admn Overheads 1.00 1.05 1.10 1.16 1.22 (l) Repairs and Maintanance 4.15 4.36 4.58 4.80 4.80 (m) Depreciation 49.75 40.51 33.36 27.76 23.37 (n) Interest on Bank Loan 45.00 43.50 37.50 31.50 25.50 (o) Total Fixed Costs 216.72 215.59 212.80 212.38 213.82 Break Even Points(BEP) in Units (p) Utilized Capacity in lakh Units 3.00 3.50 4.00 4.25 BEP in no of lakhs of Units (q) [(Divide (o) by (g) and multiply by (p)] 2.10 2.09 2.06 2.05 4.25 2.07 Request For Proposal A request for proposal (referred to as RFP) is an invitation for suppliers, often through a bidding process, to submit a proposal on a specific commodity or service A bidding process is one of the best methods for leveraging a company's negotiating ability and purchasing power with suppliers The RFP process brings structure to the procurement decision and allows the risks and benefits to be identified clearly upfront The RFP purchase process is lengthier than others, so it is used only where its many advantages outweigh any disadvantages and delays caused The added benefit of input from a broad spectrum of functional experts ensures that the solution chosen will suit the company's requirements The RFP may dictate to varying degrees the exact structure and format of the supplier's response The creativity and innovation that suppliers choose to build into their proposals may be used to judge supplier proposals against each other, at the risk of failing to capture consistent information between bidders and thus hampering the decision making process Effective RFPs typically reflect the strategy and short/long-term business objectives, providing detailed insight upon which suppliers will be able to offer a matching perspective We are including two types of requests: • • • a request for quotation, a request for information, and a request for qualification Benefits of requests of proposal: * This will Inform the suppliers that the company is looking to procure and encourages them to make their best effort * The company has to specify what it proposes to purchase If the requirements analysis has been prepared properly, it can be incorporated quite easily into the Request document * The suppliers has to be alerted that the selection process is competitive, so only the best will be chosen * It will allow for wide distribution and response * It ensures that suppliers respond factually to the identified requirements By following a structured evaluation and selection procedure an organisation can demonstrate impartiality - a crucial factor in public sector procurement Specifications It is basically a request for price Basic corporate information and history Financial information (can the company deliver without risk of bankruptcy) Technical capability (used on major procurements of services, where the item has not previously been made or where the requirement could be met by varying technical means) Product information such as stock availability and estimated completion period Customer references that can be checked to determine a company's suitability Stages of Business Development Business plan preparation Start-up and growth Established company Interest of market Financing decisions Further Developments RESULTS AND DISCUSSIONS Export Contribution European union according to the market research is the largest importer of apparels goods for india accounting for the 43.5 % of the total export taking place Export Growth it is observed that the apparel export growth in India has increased gradually year wise with minimum deviation till 2000 and drops there after.This may be due to the fluctuations in the exchange rates and diversion of orders to the other countries.recently the export had been badly hurt due to the economic recession in the developed countries who are the major coustomer of the peoducts of india despite that there is a large scope for export growth in coming years especially after the economic recession subsides there is a expected boom in the export trade in India Export Development in India Out of the survey made it is found that the following steps can be adopted to develop the Indian exports: • High quality • Cost optimisation • Prompt delivery within the stipulated time • Better utilization of available resources • New technology • Proper mind set to pay satisfactory wage rates Improved Plant Layout A modified total plant layout has been suggested to reduce the material handling which in turn will increase the garment production rate Modified Sewing Layout A modified sewing layout has been proposed to reduce the material handling which in turn will reduce the strain on the workers and thereby the efficiency of the workers can be improved Efficient use of the available space has been done so that there is no negative space around Cost Estimation From the cost estimation made it is found that the total cost of the project is around 786.476 lakhs This will include a fixed capital of 608 lakhs and the working capital of 131.08 lakhs Feasibility of the project It is found that this project will be feasible due to the following reasons: • From the calculation of the break even level we find that there is a gradual increase in the profit every year And with increase in investement in raw materials the profit is also increasing • From the cash flow statements it is observed that there is an increase in the net surplus, opening and closing cash balances every year • From the calculation of interest on bank loan it is quite clear that with type of profit the industry is going to make all the bank loans can be repaid very easily within the stipulated period of time • From the calculation of break even point statement it is observed that there is an increase in the net profit every year • Lincensing rules in India has gone very liberal so there wouldnot be any problem in getting the export licence in India as government of India is very supportive towards the export oriented business • There is a certain demand in the market of the apparels as the world economy is coming out of recession and it is very easy to start a new business in this scenario • The finances are very easily available as the banks are more than eager to give loans to set up India as they had done a very bad business during recession period • Raw material is very easily available in south India as we have a large number of textile mills in south India where the plant is proposed to be set up • The working condition , power condition , security condition and other basic amenities are very easily available in the city like Bangalore which is supposed to be good for the industry FURTHER  DEVELOPMENTS Mass Customisation As per the existing trends   it has been predicted that in future there will requirements to  make     single     single     garments     with     individual     measurements   Till   now     for   mass  production  the average sizes  from  various consumers were taken  and  the garments were  made    in  bulk    where  the  consumer  has to fit  into  the   available  size    rather  than    the  garment  fits  to  the  consumer.  So, now the people  have  come  to a level  saying that  the   garment  should fit  to their size So, the clothing industry will have   to make the garments as per   measurements of   the   individuals.  This  process  of  making  single  garments with individual  measurements  is   called  mass customization  This mass customization is going to be done  through  E­Business The  available fabrics and  styles of garments etc will be put in the internet. And  the fabric  and garment samples of the same will be kept in the places  where the sale is to be done. The   consumers  can  select  through internet  as  well  by  seeing     fabric  and  garments  etc  in  the   nearest agency of the proposed garment company.   The consumers can go to the nearest scan center   which is recommented   by   the company  and  get scanned  and  the scan  center  will  send  the  scan  points  to  the company  through  mail and  the company  will pay some commission  to the scan center.  Then  from the scan  points   the body measurements will be arrived   and will be input to   CAD.   CAD will auto   generate the pattern as per the inputs The   fabric will be cut through the   CAD­CAM interface using single ply cutters. But the  tailoring is going to be done manually only since automation in tailoring  is  problematic as of  now. Then the final garment will be despatched  through air Following Fig. 14.1   shows the  different  steps  involved in mass customisation 2   Formation of  weaving and processing mills                                    As said in the market survey  India needs  composite mills to get  the  best quality output.  For that it has been planned to start up the own  weaving and processing mill of  the  company  so as to get  the best quality garments. Here the  yarn which is of better quality has  to be selected  and  purchased and  then  to be  woven into cloth  and  processed  in the own  mill  which will  make  the fabric of  the own  company where better quality can be  maintained which will give better  quality on the final garments using the company’s  efficient and effective all over  control  to compete with local,  national and  international  markets CONCLUSION Following are the conclusions arrived at for setting up a new garment export company: 1) The apparel export growth in India is found to increase gradually Recently it is on the declining trend due to the fluctuations in the foreign exchange rates and diversions of orders to the other countries 2) China is found to perform better in garment exports trade with USA due to easy access of all types of raw materials, cost competitiveness, good infrastructure, trained productive manpower and excellent management etc 3) Out of survey made the following parameters are to be adopted to improve the garment exports in India • High quality • Cost competitiveness • Prompt delivery • Better utilization • New technology • Proper mindset 4) Modified plant and sewing lay-outs are suggested for the improvement in the garment production rate 5) The total cost of the proposed project is around Rs.567.5 lakhs, including a fixed capital of Rs.460.8 lakhs and a working capital of Rs.99.4 lakhs 6) This project is found to be feasible in all respects So it is felt that by setting-up a new garment export company as said method and manner suggested, business could be run successfully with more profit and can earn foreign exchange which will develop the country and also leads to some employment opportunities If lot of technical people in India come forward and take steps to open up the new companies it will reduce the unemployment in the nation and can lead to a Developed India rather than the existing Developing India [...]... NIFT BANGALORE/ A. P. (DFT)/2008­12 16 SETTING UP OF A GARMENT INDUSTRY 1 West Europe – Ceuta Switzerland 2 East Europe – Bulgaria, C.I.S Czechoslovakia Hungary Poland Romania 3 West Asia – Bahrain Israel Kuwait Oman Qatar Saudi Arabia U .A. E 4 Oceania – Australia New Zealand 5 South and East Asia – Hong Kong Japan Malaysia Singapore South Korea Taiwan 6 Africa – Algeria Canary Island Kenya Mauritius South Africa... exports A third factor that hindered India’s export growth was its absence from practically all major regional free-trade agreements In the past decade, the fastest-growing apparel exporters – Bangladesh, Mexico, Romania and Turkey – have all been part of preferential trade agreements while China has received massive FDI inflows from Hong Kong, China, Taiwan Province of China and Japan In fact, each of. .. generation: Additional 6 lakhs jobs by 2005  Source: Draft report of readymade garments for X Five year plan, National Textile Policy 2000-01 NIFT BANGALORE/ A. P. (DFT)/2008­12 20 SETTING UP OF A GARMENT INDUSTRY INDIA’S SHARE IN WORLD TRADE Apparel Export Growth in India The following table (table 2.3) shows the year wise total apparel exports from India Table 2.3 Apparel Exports of India to various... Africa Sudan NIFT BANGALORE/ A. P. (DFT)/2008­12 17 SETTING UP OF A GARMENT INDUSTRY 7 South America – Argentina Brazil Chile Colombia Mexico Netherlands Panama Venezuela Targeted customers 1 United States – Tommy Hil Figure Levi Strauss and Co Gap Inc Liz Claiborn V.F.Corporation J.C.Penny Company Wall-Mart Stores May Department Stores Federated Department Stores Inc F.W.Wool Worth Company 2 Japan – Mitsubishi... environmental standards, this scheme envisages the creation of textile parks in the public-private partnership mode Currently, 30 parks are in various stages of implementation, and 50 more are planned for the next five years (c) Fiscal rationalization NIFT BANGALORE/ A. P. (DFT)/2008­12 34 SETTING UP OF A GARMENT INDUSTRY In the 2006 budget, the excise duty on all manmade fibres and yarns was reduced... accelerated The largest Indian firms, such as Arvind, Indian Rayons, Vardhaman, Welspun and Alok, among others, have sanctioned investments of more than Rs 10,000 crores in the past few years.7 Second, there has been a significant forward integration into garments by yarn makers, spinners and major weavers For example, Arvind Mills and Vardhman exemplify this trend Interestingly, a significant number of. .. etc) apparel items to USA NIFT BANGALORE/ A. P. (DFT)/2008­12 24 SETTING UP OF A GARMENT INDUSTRY There are a lot of fluctuations in values between the countries Indonesia, India, Thailand, South Korea and Sri Lanka So India can get the orders tremendously if the concentrations are made on the points cited in the market trends of this project Knit Apparels and Accessories Exported to US Following tables... cotton In fact, the growth in yarn production has averaged between 8.5 per cent and 10 per cent for various types of yarn after a period of stagnation Similarly, the rate of growth for fabrics in the past few years has increased NIFT BANGALORE/ A. P. (DFT)/2008­12 28 SETTING UP OF A GARMENT INDUSTRY from 8 per cent to 10 per cent and the target has been set at 12 per cent during the next five years of the... 31 SETTING UP OF A GARMENT INDUSTRY Analysis of production and export trends Certain characteristics of India’s textile and clothing sector stand out when compared to other successful exporters First, unlike several other exporting countries, India has a strong domestic textile presence across the entire value chain, ranging from raw materials to garments Indeed, India’s apparel industry draws heavily... ginners are forward integrating into spinning, as can be seen in the cotton areas of Andhra Pradesh and Punjab Third, significant backward integration by small and medium-sized knitwear exporters into yarnmaking is occurring in the Coimbatore-Tirupur area In fact, some of the best examples of full integration are exemplified by Alok, Welspun Industries and Vardhman Industries, which straddle the entire range