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A Competitiveness Analysis of Gujarat Textile cluster

A Competitiveness Analysis of Gujarat Textile cluster

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Gujarat Textile Cluster Gujarat Textile Cluster Presentation Transcript

  • GUJARAT TEXTILE CLUSTER Farming Ginning Spinning Weaving Textile Apparels Machinery Institutions Policy Group A Cluster Competitiveness AnalysisAnant V Damle | Amit Raizada | Hari Iyer | Nimisha Gupta | Rajas Abhyankar 5
  • AGENDAGujarat Region Textiles Fact Economy Business Sheet Composition Environment IFCગરવી ગુર્જરી Market Key Activities Competitive Issues Cluster Competing Mapping Profile Clusters & Description Competitiveness & Key Performance Companies Issues
  • REGION – GUJARAT View slide
  • Fact Sheet Gujarat is the most industrialised state of India with leading positions in many industries and demographic indicators GDP GDP Growth Surfaced Roads GSWAN – India’s Largest $ 112 10.3 % 96 % operational IP-based intranet project billion CAGR of 74,112 k.m. Literacy Population Premier Edu. Large Industries Rate 60 Institutions 60 79 % million 14 800 Special Economic Zones Largest Diamond Exporter billion SME Electrified Industries Villages 8 of 10 diamonds $ 60 are processed in Surat Total FDI (2002-12) 345 ’000 100%*Gujarat Industrial Development Board – Jan,2012 1 17 View slide
  • Composition Economy fuelled by India’s most industrialised region and supported by a fast growing primary sector is a recipe for robust growth $ 40bn $ 23bn + Fastest Petro Chem 80 50 % LUC Growing Sector 21% Power- Clusters loom Cash Primary Crops Chemical 36% Diamond Processing Secondary $ 48bn 43% Services Trade Tertiary Food Processing Tourism Ship Building Ceramic 2 16
  • Environment The Govt. through policy measures and support is reviving that heritage which begun with the chance landing of East India Company’s ship at Surat Factor Demand Related & Firm Strategy Conditions Conditions Support & Rivalry Industries Natural Ports High domestic Rail & Road Integrated Mills demand Network Literacy Rate Direct Yarn MSME Textile Skilled Labour Strong IFCs Export units Weather for Cotton High buyer Multi-Product Capital Intensive Entrepreneurial sophistication SEZ Units Psyche 3 15
  • Diversity of collaborative institutions improvesIFC competitiveness of the cluster making it tighter Govt. Of Gujarat Educational & Research NIFT IIM – A Gujarat ATIRA University All India All India Office of Advisory Boards Handloom Powerloom All India Industrial Board Board Handicraft Commissioner Board Graphics Apparel Cotton Carpet National Textile Councils PSU & Promotion Textile Promotion Corporation Council Promotion Council Council Industrial Extension Powerloom Bureau Unions Trade Owner Ginning Mfg. Association Association 4 14
  • Activities Govt. attempts to bring back High Value Add activities to Market state failed to gain momentum as China floods markets Largest Export Fibre Cotton destination - ₹40 /kg * Growing 20% China Low Entry 33% Lint Ginning Lint – ₹100/kg* Barrier – Highly 65% Seed Seed – ₹14/kg* Fragmented 2% Waste Spinning Standalone Spread Consolidated Capital mills Across States in past 2 yrs Intensive dominate Gujarat – 6% Fabric Powerloom Concentrated in More Organised dominated TN & PB Labour Force *CRISIL Report on Cotton Ginning, May-2012 5 13
  • Competitive Issues Country is marred by excessive bureaucracy and indecisiveness coupled with abeyant economy Socio-Political Slow Reforms Less Trade High Import Liberalisation Duties Tedious judicial Rank in Ease of procedures 4 Starting Legal Business Months to Start Business 132/183 6 12
  • CLUSTER - TEXTILES
  • Heritage and focus on textile is visible through the rapidProfile growth of the cluster along with related industries Kutch Ahmedabad World Rank SMEs Denim City GSDP 3 • Denim • Terry Towels Textile & Surat Synthetic Capital Contribution Related Clusters Saurashtra • Cotton Growing 6% • Jetpur 18 • Manavadar Umargam SME Cotton Employment Technical of India Production Created Textile Units 35 % 28 % 860 33 % Mill-made of India for SSI Fabric 7 11
  • The Generic Value chain shows that there is scope for fullyProfile integrated as well as MSMEs to operate and create value 8 10*CRISIL Report on Cotton Yarn Industry, May-2012
  • Profile Most significant cost for fabric manufacturing is the raw material cost of cotton yarn and high Operating costs due to high inventory levels 66.9% 7% 7% 12.1% Material Cost Labour Cost Energy Cost Other Operating Cost Net Margin 1.9% 9 9*CRISIL Report on Cotton Yarn Industry, May-2012
  • Competing Clusters Textiles being one of the earliest industries is throughout India. Primary competition is from A.P & Tamil Nadu Other Textile Clusters Andhra Karnataka Maharashtra Tamil Nadu Pradesh 10+ Advantage Gujarat Electric Incentive Access to Availability Support Ports Competition to GJ Entrepreneurial Psyche Stronger IFCs High Low 10 8
  • Mapping Robust core industry is a result of strong supporting and related industries promoted by the entrepreneurial spirit of the Gujarati and assisted by the government* Agri & Related IFC Logistics Trade Academic Cotton R&D Unions Institution Growers Core Industries Machinery Silk Processors Machine Ginning Extrusion Spinning Mfg.*Based on discussion with Mr. Charudutt Prayag Chemicals Repairs & Maintenance Dye Paints Weaving Dyeing RMG Spares Mfg. Petro- chemicals Support Other Office of Services Chemicals iNDEXTb BFSI IC Bodies 11 7
  • Mapping Robust core industry is a result of strong supporting and related industries promoted by the entrepreneurial spirit of the Gujarati and assisted by the government* 12 6*Based on discussion with Mr. Charudutt Prayag
  • Performance Gujarat and other Industrial States’ growth is coming from Non-Textile industries unlike Rajasthan, Punjab & M.P 12 6*Compiled from CMIE database, Accessed 10-Jan-2013
  • Performance Gujarat has leveraged the advantage of capital intensity in textile industry triggering capital and human productivity 13 5*Compiled from Annual Survey of Industries, Govt. of India – 2009, Accessed 10-Jan-2013
  • Companies World’s best names in industry are born here, others Key crowd here – to the most progressive state Raymond Arvind Reliance Welspun Vardhaman Ashima Garden Birla Century Vareli 14 4
  • Issues Multiple SSI units create production bottleneck, aggravated by weak Supply Chain and impeded composite mill development Low Margins Extensive Scope for Labour Structure Issues and Capital Change after Vertical Intensive Units Intensive Units abolition Integration – moved out to Flourish Quota Regime Large TN and MH in 2005 Unorganised SMEs Higher High Defect Production Issues Wages then Rate neighbours Labour & Fragmented Sluggish Supply Chain Central Govt. on Environmental Others Clearances 15 3
  • RECOMMENDATIONS
  • Labour intensive jobs of the value chain can be broughtPolicy back with financial sops and a move towards rural mfg. Support Rural shift to Composite Apparel mfg. Mills through will improve SOPS Labour Costs Structure Mandate ISO Production Issues and quality standards to Labour & improve Quality Promote PPP Create in empowered Infrastructure body for speedy Others invenstments
  • THANK YOU