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India : Textiles and apparel Sector Report_August 2013
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India : Textiles and apparel Sector Report_August 2013

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India is the world's second largest producer of textiles and garments. Abundant availability of raw materials such as cotton, wool, silk and jute and skilled workforce have made India a sourcing hub. …

India is the world's second largest producer of textiles and garments. Abundant availability of raw materials such as cotton, wool, silk and jute and skilled workforce have made India a sourcing hub. The size of Indian textile and apparel market stood at US$ 89 billion in 2011 and is expected to touch US$ 221 billion by 2020.

The industry is set for strong growth, buoyed by both strong domestic consumption as well as export demand. The organised apparel segment is expected to grow at a CAGR of more than 13 per cent over a 10-year period creating enormous opportunities. Apparel constitute a large share in the overall sector, accounting for 69 per cent in 2012 while textile contributed 31 per cent to the total market share. The total exports of textile and apparel sector from India grew to US$ 33.3 billion in FY12 from US$ 17.6 billion in FY06, implying a compounded annual growth rate (CAGR) of 11.2 per cent. The exports are expected to increase further to US$ 82 billion by 2021.h rate (CAGR) of 11.2 per cent. The exports are expected to increase further to US$ 82 billion by 2021.

India's growing population has been a key driver of textile consumption growth in the country. Changing lifestyle, rising incomes and increasing demand for quality products are set to fuel demand for apparel.

The Government of India (GOI) is taking initiatives to attract foreign investments in the textile sector through promotional visits to countries such as Japan, Germany, Italy and France. The government has allowed 100 per cent foreign direct investment (FDI) in the sector through the automatic route. In the 12th Five Year Plan (2012-17), the government plans to spend US$ 9.1 billion on textiles as against US$ 4 billion in the 11th Plan.


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  • 1.       
  • 2. Source: Ministry of Textiles, Planning Commission, Technopak, Aranca Research Note: CAGR - Compound Annual Growth Rate 58 141 2011 2021P Domestic Textile and Apparel Industry (USD billions) Policy support 31 82 2011 2021P Textile and Apparel Industry Export (USD billions) 61.8 111.8 FY11 FY17P Total Cloth Production (million Sqr. Mtr.) Rising per capita income, favourable demographics and a shift in preference to branded products to boost demand Favourable trade policies and superior quality to drive textile exports Increase in domestic demand set to boost cloth production The domestic textile and apparel industry in India is estimated to reach USD141 billion by 2021 from USD58 billion in 2011 Textile and apparel exports from India is expected to increase to USD82 billion by 2021 from USD31 billion in 2011 Total cloth production in India is expected to grow to 111.848 billion square metres by FY17 from 61.811 billion square metres in FY11 CAGR: 10.2% CAGR: 9.3% CAGR: 10.4%
  • 3. Source: Ministry of Textiles, Planning Commission, Technopak, Aranca Research Note: CAGR - Compound Annual Growth Rate Policy support Abundant raw material and increasing demand for exports to boost fibre production Changing lifestyle and increasing demand for quality products set to fuel demand for apparel Rising government focus and favourable policies to support the industry Total fibre production in India is expected to increase to 9.886 billion kilogram by FY17 from 6.585 billion kilogram in FY11 Demand for apparel is likely to rise to USD122 billion by 2017 from USD65 billion in FY11 In the 12th Five Year Plan, the Government of India plans to spend USD9.1 billion against USD4 billion in the 11th Five Year Plan on textiles 4.0 9.1 11th plan outlay Proposed 12th plan outlay USD (billions) 6.585 9.886 FY11 FY17P Total Fibre Production (million Kg.) 65 122 FY11 FY17P Demand for Apparel (USD billions) CAGR: 7.0% CAGR: 11.1% CAGR: 258%
  • 4. • The engineering sector is delicensed; 100 per cent FDI is allowed in the sector • Due to policy support, there was cumulative FDI of USD14.0 billion into the sector over April 2000 – February 2012, making up 8.6 per cent of total FDI into the country in that period Growing demand Source: Technopak; Aranca Research Notes: SITP - Scheme for Integrated Textile Park; FDI - Foreign Direct Investment, 2021 E - Estimated figure for 2020; ASEAN - Association of Southeast Asian Nations Robust demand • Increased penetration of organised retail, favourable demographics, and rising income levels to drive textile demand • Growth in building and construction will continue to drive demand for non-clothing textiles Increasing investments • Over USD35 billion of investments have been made in the textile and clothing sector during the last four years, with the cotton textile segment accounting for around 75 per cent Policy support • 100 per cent FDI (automatic route) is allowed in the Indian textile sector • SITP was approved in July 2005 to facilitate setting up of textiles parks with world class infrastructure • Free trade with ASEAN countries and proposed agreement with European Union will boost exports Competitive advantage • Abundant availability of raw materials such as cotton, wool, silk and jute • India enjoys a comparative advantage in terms of skilled manpower and in cost of production relative to major textile producers 2011 Market Value: USD89 billion 2020E Market Value: USD221 billion Advantage India
  • 5. Notes: NTP - National Textile Policy; NTC - National Textiles Corporation; ASEAN - Association of Southeast Asian Nations, TUFS - Technology Upgradation Fund Scheme; TMC - Technology Mission on Cotton, EU - European Union • The first cotton textile mill of Mumbai was established in 1854 • The first cotton mill of Ahmedabad was found in 1861; it emerged as a rival centre to Mumbai • Number of mills increased from 178 in 1901 to 417 in 1945 • Out of 423 textile mills of the undivided India, India received 409 after partition and the remaining 14 went to Pakistan • In 1999, TUFS was set up to provide easy access to capital for technological up gradation • TMC was launched to address issues related to low productivity and infrastructure • In 2000, NTP was announced for the overall development of the textile and apparel industry 1854-1900 1901–1950 1951-2000 2000 onwards • NTC started selling few mills to private businesses in 2005 • SITP was implemented to facilitate setting up of textile units with appropriate support infrastructure • After MFA cotton prices are aligned with global prices • Technical textile industry will be a new growth avenue • Free trade agreement with ASEAN countries and proposed agreement with EU under discussion
  • 6. Source: Aranca Research Note: * Including cotton, jute, silk, wool and manmade fibres The textile and apparel industry can be broadly divided into two segments: Yarn and fibre (include natural and man-made) Processed fabrics (including woolen textiles, silk textiles, jute textiles, cotton textiles and technical textiles), readymade garments (RMGs) and apparel Key Segments of The Textile Industry Process Output Raw Material Ginning Spinning Processing Garment/ Apparel production Cotton, jute, silk, wool Fibre* Yarn Fabric Processed fabric Final garment/ Apparel  Woollen textiles  Silk textiles  Jute textiles  Technical textiles Yarn and fibre segment Weaving/ Knitting
  • 7. The fundamental strength of the textile industry in India is its strong production base of wide range of fibre / yarns from natural fibres like cotton, jute, silk and wool to synthetic /man-made fibres like polyester, viscose, nylon and acrylic India is the world’s second largest producer of textiles and garments Indian textile industry accounts for about 24 per cent of the world’s spindle capacity and eight per cent of global rotor capacity India has the highest loom capacity (including hand looms) with 63 per cent of the world’s market share India accounts for about 14 per cent of the world’s production of textile fibres and yarns (largest producer of jute, second largest producer of silk and cotton; and third largest in cellulosic fibre) Source: Textile Ministry, Aranca Research
  • 8. India's Textile Market Size (USD Billion)Textile plays major role in the Indian economy It accounts for 27 per cent of foreign exchange inflows It contributes 14 per cent to industrial production and 4 per cent to GDP With over 45 million people, the industry is one of the largest source of employment generation in the country The industry accounts for nearly 11 per cent of total exports The size of India’s textile market in 2011 was USD89.0 billion; the market is expected to expand at a CAGR of 10.1 per cent over 2009–21 Source: Technopak, Ministry of Textiles, Aranca Research Note: CAGR - Compound Annual Growth Rate, E - Estimated 70 78 89 143 223 2009 2010 2011 2016E 2021E CAGR: 10.1%
  • 9. Shares in India’s Textile and Apparel Sector in 2012Apparel constitute a large share in the overall sector In 2012, apparel had a share of 69 per cent of the overall market; textiles contributed the remaining 31 per cent To improve technical skills in apparel industry government established 75 apparel training and design centres across India National Institute of Fashion Technologies played pioneering role in growth of apparel industry and exports To promote apparel exports 12 locations has been approved by the government to set up apparel parks for exports Source: Technopak, Aranca Research Note: NIFT - National Institute of Fashion technology 69% 31% Apparel Textile
  • 10. Production of raw cotton grew to 35.3 million bales in FY12, up from about 28.0 million bales in FY07 During the same period, production expanded at a CAGR of 4.7 per cent; its annual growth was at 4.7 per cent in FY12 Of overall amount of raw cotton produced in the country, domestic consumption totalled 25 million bales, while 8.5 million bales were exported Production of Raw Cotton (Million Bales) Source: Ministry of Textiles, Aranca Research Note: CAGR - Compounded Annual Growth Rate one Bale - 217.7 kilogram 28.0 30.7 29.0 30.5 33.9 35.3 FY07 FY08 FY09 FY10 FY11 FY12 CAGR: 4.7% • Raw cotton and man-made fibres are major segments in this category • Raw wool and raw silk are other components – their production levels are much lower
  • 11. Production of man-made fibre has also been on an upward trend Production stood at 1.231 million tonnes in FY12 with the figure reinforcing a recovery from 2009 levels During 9MFY13, production increased to 0.945 million tonnes from 0.921 million tonnes in the same period last year Production of Man-made Fibre (Million Tonnes) Source: Ministry of Textiles, Aranca Research 1.139 1.244 1.066 1.268 1.285 1.231 0.945 FY07 FY08 FY09 FY10 FY11 FY12 9MFY13
  • 12. Source: Ministry of Textiles, Aranca Research Note: P - Data for FY12 is provisional Production of Yarn (Million Tonnes)Production of yarn grew to 5.8 million tonnes in FY12 from 5.2 million tonnes in FY07, implying a CAGR of 2.4 per cent Cotton yarn accounts for the largest share in total yarn production; in FY12, the segment’s share amounted to 53.6 per cent 2.824 2.948 2.896 3.079 3.490 3.127 2.938 0.989 1.055 1.016 1.114 1.223 1.246 0.986 1.370 1.509 1.418 1.522 1.549 1.463 1.162 FY07 FY08 FY09 FY10 FY11 FY12 9MFY13 Cotton Yarn Other Spun Yarn Manmade Filament Yarn
  • 13. Source: Ministry of Textiles, Aranca Research Notes: Sq Mtr is Square meter Fabric Production (million sq mtr)Fabric production rose to 59,605 million square metres in FY12 from 52,665 million square metres in FY07, implying a CAGR of 2.5 per cent The major segment is cotton yarn, which accounted for more than 50 per cent in FY12 During 9MFY13, fabric production was 50,553 million square metres 26,238 27,196 26,898 28,790 31,201 30,570 28,171 19,545 21,173 20,534 22,438 21,663 20,567 14,683 6,882 6,888 6,766 7,769 8,135 8,468 7,699 FY07 FY08 FY09 FY10 FY11 FY12 9MFY13 Cotton 100% Non Cotton Blended
  • 14. Source: Ministry of Textiles, Aranca Research Note: P - Data for FY12 is provisional India's textile trade (USD billion)Exports have been a core feature of India’s textile and apparel sector, a fact corroborated by trade figures Exports grew to USD33.3 billion in FY12 from USD17.6 billion in FY06, implying a CAGR of 11.2 per cent FY12 was a particularly good year for the sector, with exports surging at an annual rate of 19.8 per cent 17.6 19.1 22.1 21.2 22.4 27.8 33.3 2.7 2.8 3.3 3.5 3.4 4.2 5.2 FY06 FY07 FY08 FY09 FY10 FY11 FY12P Export Import CAGR: 11.2%
  • 15. Source: Ministry of Textiles, Aranca Research Note: Others include coir & coir manufacturers and jute, P - Data for FY12 is provisional Shares in India’s textile exports (FY12P)Readymade garments was the largest contributor to total textile and apparel exports from India in FY12P; the segment had a share of 39 per cent Cotton and man-made textiles were the major contributors with shares of 34 per cent and 17 per cent, respectively 39% 34% 17% 3% 3% 4% Readymade Garment Cotton Texttiles Man-made Textiles Handicrafts Silk & Handloom Woolen & Others
  • 16. Source: Annual Reports, Aranca Research Company Business areas Welspun India Ltd Home textiles, bathrobes, terry towels Vardhman Group Yarn, fabric, sewing threads, acrylic fiber Alok Industries Ltd Home textiles, woven and knitted apparel fabric, garments and polyester yarn Raymond Ltd Worsted suiting, tailored clothing, denim, shirting, woollen outerwear Arvind Mills Ltd Spinning, weaving, processing and garment production (denims, shirting, khakis and knitwear) Bombay Dyeing & Manufacturing Company Ltd Bed linen, towels, furnishings, fabric for suits, shirts, dresses and saris in cotton and polyester blends Garden Silk Mills Ltd Dyed and printed fabric
  • 17. Source: Ministry of Textiles, Aranca Research Note: TUFS - Technology Upgradation Fund Scheme Increasing investment in TUFS • The Ministry of Textiles is encouraging investments through increasing focus on schemes such as Technology Upgradation Fund Scheme (TUFS) and cluster development activities • TUFS in now extended to the 12th Five Year Plan, with an investment target of USD31.5 billion Multi-Fibre Arrangement (MFA) • With the expiry of MFA in January 2005, cotton prices in India are now fully integrated with international rates Public-Private Partnership (PPP) • The Ministry of Textiles commenced an initiative to establish institutes under the public- private partnership (PPP) model to encourage private sector participation in the development of the industry Technical textiles • Technical textiles, which has been growing at around twice the rate of textiles for clothing applications over the past few years, is now expected to post a CAGR of 20 per cent over FY11-17
  • 18. Policy support 100 per cent FDI in textile sector Government setting up SITPs and Mega Cluster Zones Increasing loans under TUFS Rising demand in exports Increasing investments Growing domestic and foreign investments Commitment of USD140 billion of foreign investments Government investment schemes (TCIDS and APES) Inviting Resulting in Increasing demand in domestic market Growing population driving demand for textiles Growing demand Source: Ministry of Textiles, Aranca Research Note: TCIDS - Textile Center Infrastructure Development Scheme, APES - Apparel Park for Exports Scheme
  • 19. FY14 Union Budget Stress On Mechanisation Infrastructure Support Tax Sops and Financial Package • Zero excise duty for the cotton and man-made sector at yarn, fabric and garment stages • Reduction in duty for imported textile machinery and parts (to 5.0 per cent from 7.5 per cent) • Exemption on excise duty for hand-made carpets and textile floor • Allocation of USD10.4 million for apparel parks under SITP • A new Integrated Processing Development Scheme in the 12th Plan with an outlay of USD1041.5 million to address environmental concerns of the industry • TUFS for the textile sector extended to the 12th Five Year Plan, with an investment target of USD2.9 billion • Budget provides USD0.5 billion over 2013–14 for modernisation of the power loom sector Source: Budget FY14 - Government of India Note: SITP - Scheme for Integrated Textile Parks, TUFS - Technology Upgradation Fund Scheme
  • 20. Source: IMF, Aranca Research Note: F - Forecasts India‘s Population in billionsBy 2010, India’s population had close to doubled compared to figures 30 years before The IMF expects India’s population to touch 1.31 billion by end-2017 India’s growing population has been a key driver of textile consumption growth in the country It has been complemented by a young population which is growing and at the same time is exposed to changing tastes and fashion Complementing this factor is rising female workforce participation in the country 0.68 0.84 1.02 1.19 1.31 1980 1990 2000 2010 2017F CAGR: 1.8%
  • 21. Source: IMF, Mckinsey global institute April 2010, Aranca Research Notes: E - Estimates, F - Forecasts Trends in Per-capita Income in India (USD) Rising incomes has been a key determinant of domestic demand for the sector; with incomes rising in the rural economy as well, the upward push on demand from the income side is set to continue Changing Economic Fortunes by Income Segments (2010) -5% 0% 5% 10% 15% 20% 25% 30% 300 600 900 1,200 1,500 1,800 2,100 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011F 2012F 2013F 2014F 2015F 2016F 2017F Gross domestic product per capita, current prices Growth 1% 3% 7%2% 6% 17% 12% 25% 29% 35% 40% 32% 50% 26% 15% Globals (>22065.3) Strivers (11032.7 - 22065.3) Seekers (4413.1 - 11032.7) Aspirers (1985.9 - 4413.1) Deprived (<1985.9) 2008 2020 2030 Million Household ,100% Income segment
  • 22. Source: Ministry of Textiles, Aranca Research Growing Textile Exports from India (USD Billion) Capacity built over years has led to low cost of production per unit in India’s textile industry; this has lent a strong competitive advantage to the country’s textile exporters relative to key global peers The sector has also witnessed increasing outsourcing over the years as Indian players moved up the value chain from being mere converters to vendor partners of global retail giants The strong performance of textile exports is reflected in the value of exports from the sector over the years; In FY12, textile exports jumped by 19.4 per cent to USD33.3 billion In the coming decades, Africa and Latin America could very well turn out to be key markets for Indian textiles 19.2 22.2 21.1 22.4 27.8 33.3 FY07 FY08 FY09 FY10 FY11 FY12 CAGR: 11.6%
  • 23. Source: Ministry of Textiles, Techtextil, Aranca Research Note: SME - Small and Medium Enterprises, E - Estimates Technical Textile Industry (USD billion)The major service offerings of the technical textile industry include thermal protection and blood-absorbing materials, seatbelts and adhesive tapes The technical textile industry is expected to expand at a CAGR of 21.3 per cent during FY12–17 to USD31.3 billion in FY17 Healthcare and infrastructure sectors are major drivers of the technical textile industry The government has supported the technical textile industry with an allotment of USD1 billion for SMEs and an exemption in custom duty for raw materials used by the sector Government plans to launch a USD44.2 million mission for the promotion of technical textiles, and cleared plans to set up a new research centre for the industry 11.9 31.3 FY12 FY17E CAGR: 21.3%
  • 24. Source: Ministry of Textiles, Technopak, Aranca Research Note: SME - Small and Medium Enterprises, E - Estimates Indian Home Textile Industry (USD billion)India’s home textile industry is expected to expand at a CAGR of 8.3 per cent during 2011–21 to USD8.2 billion in 2021 from USD3.7 billion in 2011 India accounts for 7 per cent of global home textiles trade. Superior quality makes companies in India a leader in the US and the UK, contributing two-third to their exports Indian products has gained a significant market share in global home textiles in the past few years 3.7 5.5 8.2 2011 2016E 2021E CAGR: 8.3%
  • 25. Technology Upgradation Fund Scheme (TUFS) • TUFS infused an investment of more than USD43 billion until June 2010; another USD2.9 billion has been allocated for the 12th Five Year Plan • Investment was made to promote modernisation and upgradation of the textile industry by providing credit at reduced rates National Textile Policy - 2000 • The policy was introduced for the overall development of textile industry • Key areas of focus include technological upgrades, enhancement of productivity, product diversification and financing arrangements Foreign Direct Investment • FDI of up to 100 per cent is allowed in the textile sector through the automatic route Scheme for Integrated Textiles Parks (SITP) • SITP was set up in 2005 to provide necessary infrastructure to new textile units; under SITP, 40 projects (worth USD900 million) have been sanctioned • The planned outlay for the textiles and apparel sector under the 11th Five Year Plan (20012–17) was USD2.9 billion
  • 26. For updated information, please visit www.ibef.org Name of SEZ and Status State Area (Hectares) Sector Details Mahindra City SEZ (Functional) Tamil Nadu 607.1 Apparel and Fashion Accessories Mahindra City is India’s first integrated business city, divided into business and lifestyle zones. It is a cluster of three sector specific SEZs in Tamil Nadu, for apparels and fashion accessories; IT and hardware; and auto ancillary. The business zone provides plug-n-play working spaces. This zone comprises a SEZ (primarily for exporters) and domestic tariff area (DTA) for companies targeting domestic market. Surat Apparel Park (Functional) Gujarat 56.0 Textiles Key industrial units include Safari Exports, Venus Garments, Benchmark Clothings, P. K. International, Tormal Prints, J.R. Fashion and Ganga Export. Brandix India Apparel City (BIAC) (Functional) Andhra Pradesh 404.7 Textiles BIAC is an integrated apparel supply chain city, managed by Brandix Lanka Ltd. It aims to be a end-to-end apparel solution provider. (KIADB) (Functional) Karnataka 16129.0 Several Sectors Karnataka Industrial Areas Development Board (KIADB) is a wholly owned infrastructure agency of Government of Karnataka. Till date, KIADB has formed 132 industrial areas spread all over the state. Source: Aranca Research Note: KIADB - Karnataka Industrial Areas Development Board, SEZ - Special Economic Zone
  • 27. For updated information, please visit www.ibef.org Source: Aranca Research, Note: All figures as of 2011-12 • NORTH: Kashmir, Ludhiana and Panipat account for 80 per cent of woollens in India • WEST: Ahmedabad, Mumbai, Surat, Rajkot, Indore and Vadodara are the key places for cotton industry • SOUTH: Tirpur,Coimabtore and Madurai for hosiery. • Bengaluru, Mysore and Chennai for silk Major Textile and Apparel Zones • EAST: Bihar for jute, parts of Uttar Pradesh for woollen and Bengal for cotton and jute industry
  • 28. M&A activity in the sector has been picking up pace over the years; in fact, from January 2000 to May 2013, more than 482 M&A deals took place, and the trend is expected to continue in FY14 as well Some of the major M&A deals* are listed below: M&A Scenario - Details Period: 1 January 2000 To 1 May 2013 Deals Acquirer Name Target Name Deal size (USD million) 1 Grasim Industries Terrace Bay Pulp 360.0 2 Madura Garments Pantaloon Retail 333.3 3 Himachal Fibres Balmukhi Textiles Pvt Ltd NA 4 BR Machine Tools Pvt Ltd Bombay Rayon Fashions Ltd 721.1 5 Group of investors Provogue (India)Ltd 526.9 6 M C Spinners Pvt Ltd Maxwell Industries 8.47 Source: “M&A,” Thompson ONE Banker, Grant Thornton, CMIE, Aranca Research Notes: * The value for 290 deals were not disclosed
  • 29. For updated information, please visit www.ibef.org Source: Ministry of Commerce and Industry, Aranca Research Note: * - Data for FY13 is up to February 2013 Trends of FDI in Textile Industry (USD Million)100 per cent FDI is approved in the sector FDI in the sector totalled USD1.22 billion between April 2000 and February 2013 The textiles industry in India is experiencing a significant increase in collaboration between global majors and domestic companies International apparel giants, such as Hugo Boss, Liz Claiborne, Diesel and Kanz, have already started operations in India 9 40 90 130 190 160 140 129 165 101 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13*
  • 30. 1925 1958 1964 1968 1990 1996 2000 2002 2006 2007 2008 2010 2011 2012 Fabrics Apparels Woollen Outerwear Corporate Wear Furnishings Retail Organic growth in textiles Capacity of 40 MM -1996 Acquisition of ColorPlus - 2002 JV with GAS in India - 2007 Launch of the Makers brand - 2011 FY12 USD758 million turnover 1964 Vertical integration in multi-fibres 1980 Transformed into industrial conglomerate FY06 USD364 million turnover With more than 18,000 touch points and 670 outlets, the company has planned another 500 stores by 2015 Notes: JV - Joint Venture; MM - Million Meters
  • 31. 1986 1988 1990 1992 1993 1995 2003 2004 2006 2007 2008 2010 2011 2012 Cotton and Blended Yarn Apparel Fabric Embroidery Garments - Woven & Knitted Home Textile Polyester Yarn Organic growth in textiles Acquisition of QS to gain retail holding in the UK -2007 Tie-ups With Global Retail Giants JV with NTC - 2008 Focus on speciality fabrics; plans to enter in technical textiles FY12 USD1.8 billion turnover 1995* Financial and technical collaboration through JV 2007 ISO 9001, 2000 and three other international accreditations FY04 USD208 million turnover Notes: NTC - National Textile Corporation *In 1995 Alok industries had sets up financial and technical collaboration with Grabal, Albert Grabher GmbH & Co of Austria to make embroidered products through a joint venture company, Grabal Alok Impex Ltd
  • 32. Welspun India was incorporated in 1985, with presence in more than 50 countries. The company is the world leader in a range of home textiles products Growth Strategy Global Brand Focus On Innovation Association With Top Brands And Clients Focused Approach On Home Textiles Wide Distribution Network • Capacity - 43,800 MT/Year • Location - Anjar/Vatpi • Capacity utilisation - 95 per cent Terry towels • Capacity - 45 million metre/Year • Location - Anjar • Capacity utilisation - 83 per cent Bed linen products • Capacity - 10,151 MT/Year • Location - Vapi • Capacity utilisation - 47 per cent Rugs Source: Company Presentation, Aranca Research
  • 33. • Welspun contributed 46 per cent to India’s towel exports to the US in 2012 • The company accounts for 25 per cent for bed sheet exports to the US • Welspun’s key clients are retailer giants such as Wal-Mart, Target, JC Penny, IKEA Christy and Mark & Spencer Revenue (USD million) EBITDA (USD million) Source: Company Presentation, Aranca Research 495 537 612 530 FY10 FY11 FY12 9MFY13 CAGR: 11.2% 93 88 124 93 FY10 FY11 FY12 9MFY13 CAGR: 15.5%
  • 34. • Tirupur’s textiles industry stands at USD4.2 billion in FY12 and is globally famous for hosiery products • The city has more than 5,000 garment manufacturing and job work units, and is one of the most organised processing and finishing garment clusters in India • Its hosiery hub became the first textile cluster in India to comply with zero liquid discharge guidelines Exports from Tirupur (USD billion)• The textiles industry in Tirupur contributes about 80 per cent to India’s hosiery exports and around 3 per cent to total export trade • Tirupur is expected to export textile products worth USD2.6 billion in FY13 compared to USD1.4 billion in FY05 • The Government of India granted the city the status of Town of Export Excellence 1.4 1.9 2.4 2.5 2.5 2.4 2.7 2.6 2.6 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13E Source: Ministry of Textiles, News Articles, Aranca Research CAGR: 10.1%
  • 35. Immense Growth Potential • The Indian textile industry is set for strong growth, buoyed by both strong domestic consumption as well as export demand • For the near term (2012), the sector is valued at USD110 billion by the Confederation of Indian Textile Industry (CITI) • Estimates by the Alok Industries Ltd put the sector market value at USD220 billion by 2020 Private Sector Participation In Silk Production • The Central Silk Board sets targets for raw silk production and encourages farmers and private players to grow silk • To achieve these targets, alliances with the private sector, especially major agro-based industries in pre-cocoon and post-cocoon segments has been encouraged Proposed FDI In Multi-brand Retail • For the textile industry, the proposed hike in FDI limit in multi-brand retail will bring in more players, thereby providing more options to consumers • It will also bring in greater investments along the entire value chain – from agricultural production to final manufactured goods • With global retail brands assured of a domestic foothold, outsourcing will also rise significantly
  • 36. Notes: BTRA - The Bombay Textile Research Association; SITRA - South India Textile Research Association; NITRA - Northern India Textile Research Association; SASMIRA - Synthetic & Art Silk Mills Research Association Retail Sector Offers Growth Potential • With consumerism and disposable income on the rise, the retail sector has experienced a rapid growth in the past decade with several international players like Marks & Spencer, Guess and Next having entered Indian market • The organised apparel segment is expected to grow at a compound annual growth rate (CAGR) of more than 13 per cent over a 10-year period Centers of Excellence (CoE) for Research and Technical Training • The CoEs are aimed at creating testing and evaluation facilities as well as developing resource centres and training facilities • Existing four CoEs, BTRA for Geotech, SITRA for Meditech, NITRA for Protech and SASMIRA for Agrotech, would be upgraded in terms of development of incubation centre and support for development of prototypes • Fund support would be provided for appointing experts to develop these facilities Foreign Investments • The government is taking initiatives to attract foreign investments in the textile sector through promotional visits to countries such as Japan, Germany, Italy and France
  • 37. The Textile Association (India) (TAI) 72-A, Santosh, Dr M B Raut Road, Shivaji Park, Dadar, Mumbai- 400 028 Telefax: 91 22 24461145 Website: www.textileassociationindia.org The South India Textile Research Association (SITRA) 13/37, Avanashi Road, Coimbatore - 641 014, Tamil Nadu Phone: 91 422 2574367, 6544188, 4215333 Fax: 91 422 2571896, 4215300 E-mail: sitraindia@dataone.in Website: www.sitra.org.in Northern India Textile Mills’ Association (NITMA) 121, Gagandeep Building (First Floor), 12, Rajendra Palace, New Delhi- 110 008 E-mail: nitma@vsnl.net, nitma@airtelmail.in Website: www.nitma.org
  • 38. BTRA: Bombay Textile Research Association CAGR: Compound Annual Growth Rate FDI: Foreign Direct Investment FY: Indian financial year (April to March) GOI: Government of India INR: Indian Rupee NITRA: Northern India Textile Research Association NTC: National Textiles Corporation NTP: National Textile Policy SASMIRA: Synthetic & Art Silk Mills Research Association SEZ: Special Economic Zone SITP: Scheme for Integrated Textile Park
  • 39. SITRA: South India Textile Research Association TUFS: Technology Upgradation Fund Scheme TMC: Technology Mission on Cotton USD: US Dollar Wherever applicable, numbers have been rounded off to the nearest whole number
  • 40. Year INR equivalent of one USD 2004-05 44.95 2005-06 44.28 2006-07 45.28 2007-08 40.24 2008-09 45.91 2009-10 47.41 2010-11 45.57 2011-12 47.94 2012-13 54.31 Exchange Rates (Fiscal Year) Year INR equivalent of one USD 2005 45.55 2006 44.34 2007 39.45 2008 49.21 2009 46.76 2010 45.32 2011 45.64 2012 54.69 2013 54.45 Exchange Rates (Calendar Year) Average for the year
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