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Project Report on Textile Industry

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a report on how textile manufacturing companies are working in India.

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Project Report on Textile Industry

  1. 1. The Winter Project Report on Textile Industry Northern Institute of Integrated Learning in Management – Center for Management Studies Submitted To: Submitted by: Mr. Mohit Agrawal Roshan Kumar Jha
  2. 2. PREFACE I made this project on textile industry in order to know about that how manufacturing process and management is done. This project is mainly centralized on how various departments are working for management. For a management student the career of the student depends upon many things and one of them is practical knowledge. Practical knowledge helps to implement the theoretical aspects into the practical world. For practical exposer I done this project. This project contains overall management structure of the companies doing the textile products (like Suiting & shirting).this project is basically for knowing how textile manufacturing concerns are run their businesses and how they contributing to the Indian economy.
  3. 3. ACKNOWLEDGEMENT I heartily thankful to SANGAM INDIA LTD. BSL LIMITED and SHARDA SPUNTEX PVT LTD. Which has given me the golden opportunity to prepare or analyze project report on “TEXTILE INDUSTRY”. I am also thankful to honourable sir Mr. Mohit Agrawal who has leaded me to enlighten ourselves in preparing of this project. His inspiration and encouragement leaded me to come with a successful task. I am also thankful to management faculty without whose constant guidance this work would have been an impossible task to complete.
  4. 4. INDEX 1) Objective 2) Introduction of Indian textile industry 3) History of the Indian textile industry 4) Department workings 5) Market Size 6) SWOT Analysis 7) Marketing Mix 8) Problems faced by the industry 9) Government initiatives towards textile industry. OBJECTIVE  To study the current position and situation of the Textile industry.  Find out the possible ways of solution to weaknesses.  To find out the strengths and weaknesses of the suiting and shirting.  To identify the key opportunities and threats in the textile business.  To find out the problem faced by the various departments manager and labours.
  5. 5.  To study the Marketing Mix (Product, Price, Place and Promotion) of the textile business. INTRODUCTION The textile industry in India traditionally, after agriculture, is the only industry that has generated huge employment for both skilled and unskilled labour in textiles. The textile industry continues to be the second largest employment generating sector in India. India’s textiles sector is one of the oldest industry in Indian economy. Indian Textile Industry occupies a very important place in the economic life of India. The Indian textile industry is one of the largest in the world with a massive raw material and textiles manufacturing base. It offers direct employment to over 35 million in the country. The share of textiles in total exports was 11.04% during April–July 2010, as per the Ministry of Textiles. During 2009-2010, Indian textiles industry was pegged at US$55 billion, 64% of which services domestic demand. In 2010, there were 2,500 textile weaving factories and 4,135 textile finishing factories in all of India. According to AT Kearney’s ‘Retail Apparel Index’, India is ranked as the fourth most promising market for apparel retailers in 2009. The textile industry is primarily concerned with the design and production of yarn, cloth, and their distribution. Cotton is the world's
  6. 6. most important natural fiber. The textiles industry is also labour intensive and is one of the largest employers. Government of India passed the National Textile Policy in 2000. The major functions of the ministry of textiles are formulating policy and coordination of man-made fiber, cotton, jute, silk, wool industries, decentralization of power loom sector, promotion of exports, planning & economic analysis, finance and promoting use of information technology. The advisory boards for the ministry include All India Handlooms Board, All India Handicrafts Board, All India Power looms Board, Advisory Committee under Handlooms Reservation of Articles for Production and Co-ordination Council of Textiles Research Association. There are several public sector units and textile research associations across the country. HISTORY The archaeological surveys and studies have found that the people of Harrapan civilization knew weaving and the spinning of cotton four thousand years ago. Reference to weaving and spinning materials is found in the Vedic Literature. There was textile trade in India during the early centuries. A block printed and resist-dyed fabrics, whose origin is from Gujarat is found in tombs of Fostat, Egypt. This proves that Indian export of cotton textiles to the Egypt or the Nile Civilization in medieval times were to a large extent. Large quantity of north Indian silk were traded through the silk route in China [5] to the western countries. The Indian silk were often exchanged with the western countries for their spices in the barter system. During the
  7. 7. late 17th and 18th century there were large export of the Indian cotton to the western countries to meet the need of the European industries during industrial revolution. Consequently, there was development of nationalist movement like the famous Swadeshi movement which was headed by the Aurobindo Ghosh. DEPARTMENT WORKINGS IN THESE COMPANIES On the basis of my observation these departments are generally in the companies- 1. Accounts Department 2. Finance Department 3. Marketing Department 4. Sales department 5. Production Departments 6. Human Resources Departments Generally marketing and sales departments are working together but if there is requirement then they establish separate department.
  8. 8. Segments of Indian Textile Industry Indian Textile Industry can essentially be categorized into two segments: 1. Organized Textile Industry 2. Unorganized Textile Industry 1.Organized Textile Industry Organized Textile Industry is a highly organized one with immense importance on capital intensive production process. This sector is characterized by sophisticated mills where technologically advanced machineries are utilized for mass production of textile products 2.Unorganized Textile Industry: Unorganized Textile Industrysector is the dominant part in this industry which mainly utilizes the traditional practices woven or spun in cloth production and hence is labour intensive in nature. This industry is characterized by the production of clothes either through weaving or spinning with the help of hands. The decentralized nature is considered as another important feature of the unorganized textile industry in India.
  9. 9. Market size of the industry  The Indian textiles industry, currently estimated at around US$ 108 billion, is expected to reach US$ 223 billion by 2021.  The industry is the second largest employer after agriculture, providing employment to over 45 million people directly and 60 million people indirectly. The Indian Textile Industry contributes approximately 5 per cent to India’s Gross Domestic Product (GDP), and 14 per cent to overall Index of Industrial Production (IIP).  The Indian textile industry has the potential to reach US$ 500 billion in size according to a study by Wazir Advisors and PCI Xylenes & Polyester. The growth implies domestic sales to rise to US$ 315 billion from currently US$ 68 billion. At the same time, exports are implied to increase to US$ 185 billion from approximately US$ 41 billion currently.  The Indian textiles industry, currently estimated at around US$ 108 billion, is expected to reach US$ 223 billion by 2021. The industry is the second largest employer after agriculture, providing employment to over 45 million people directly and 60 million people indirectly.  The Indian Textile Industry contributes approximately 5 per cent to India’s Gross Domestic Product (GDP), and 14 per cent to overall Index of Industrial Production (IIP).  The Indian textile industry has the potential to reach US$ 500 billion in size according to a study by Wazir Advisors and PCI Xylenes & Polyester. The growth implies domestic sales to rise to US$ 315 billion from currently US$ 68 billion. At the same
  10. 10. time, exports are implied to increase to US$ 185 billion from approximately US$ 41 billion currently. SWOT Analysis SWOT analysis is a tool for auditing an industry and its environment. It is the first stage of planning and helps marketers to focus on key issue. SWOT stand for strengths, weaknesses, opportunities, threats. Strengths and Weaknesses are internal factors. Opportunities and Threats are external factors. It involve specifying the objective of the business venture or project and identifying the internal and external factors that are favorable and unfavorable to achieve that objective.
  11. 11. Strengths of cotton cloth Production industry  Local labour availability  Effective distribution system  Location of your business  Quality process and procedures  Your specialist marketing expertise Weaknessesof cotton cloth production  Unskilled labour  Poor training capacity SWOT ANALYSIS Strengths Weaknesses Opportunities Threats
  12. 12.  Mismanagement on the part of the owner  Poor technical support  Less promotional activities  Less availability of Capital or capital sources  High power tariffs with uncertain power supply Opportunities of cotton cloth production  Untapped market  High demand  Estimated need  International market Threats of cotton cloth production  New competitors  Price wars with competitors  Increasing cost of raw material  Trends of western cloth culture  Environmental threats : winter and rainy season  Threats of substitute product  The bargaining power of customers (Buyers) and suppliers Marketing Mix
  13. 13. The 'Marketing Mix' (also known as the four Ps) is a foundation concept in Marketing. The marketing mix has been defined as the "set of marketing tools that the firm uses to pursue its marketing objectives in the target market" The 4Ps make up a typical marketing mix - Price, Product, Promotion and Place. However, nowadays, the marketing mix increasingly includes several other Ps like Packaging, Positioning, People and even Politics as vital mix elements. All the elements of the marketing mix influence each other. They make up the business plan for a company and handled right, can give it great success. But handled wrong and the business could take years to recover. The marketing mix needs a lot of understanding, market research and consultation with several people, from users to trade to manufacturing and several others. 1.Product It refers to the item actually being sold. It is a tangible object that is mass produced or manufactured on a large scale with specific volume of unit. To retain its competitiveness in the market , product Product • features, Brands,services,innovation,style and images Price • List price, discount, terms & conditions, cross selling Place • Inventory, distribution, Channel Promotion • sales , packageing, Advertising,
  14. 14. differentiation is required and is one of the strategies to differentiate a product from its competitors. 2.Price In case of setting the price of cotton cloth, it is basically set by the businessman while keeping the demand of the product in the mind. The demand of these product rise in summer season in which the businessman get good profit as compare to the winter season profit margin. 3.Place In case of cotton cloth products distribution is done basically through intermediaries i.e. wholesalers. And than the whole seller distribute them to the end customers or consumer through their respective Retail Stores. 4.Promotion In cotton cloth business I find some personal selling by medium and lower level of businessmen. This contribute a lot in their overall sales volume. While sales promotion activities are very few. Government Initiatives towards industry
  15. 15. The Indian government has come up with a number of export promotion policies for the textiles sector. It has also allowed 100 per cent FDI in the Indian textiles sector under the automatic route.  The Clothing Manufacturers' Association of India (CMAI) has signed a memorandum of understanding (MOU) with China Chamber of Commerce for Import and Export of Textiles (CCCT) to explore potential areas of mutual co-operation for increasing apparel exports from India Subsidies on machinery and infrastructure  The Revised Restructured Technology Up gradation Fund Scheme (RRTUFS) covers manufacturing of major machinery for technical textiles for 5 per cent interest reimbursement and 10 per cent capital subsidy in addition to 5 per cent interest reimbursement also provided to the specified technical textile machinery under RRTUFS.  Under the Scheme for Integrated Textile Parks (SITP), the Government of India provides assistance for creation of infrastructure in the parks to the extent of 40 per cent with a limit up to Rs 40 crore (US$ 6 million). Under this scheme the technical textile units can also avail its benefits.  The major machinery for production of technical textiles receives a concessional customs duty list of 5 per cent.  Specified technical textile products are covered under Focus Product Scheme. Under this scheme, exports of these products are entitled for duty credit scrip equivalent to 2 per cent of freight on board (FOB) value of exports
  16. 16. The Ministry of Textiles has approved a 'Scheme for promoting usage of geotechnical textiles in North East Region (NER)' in order to capitalise on the benefits of geotechnical textiles. The scheme has been approved with a financial outlay of Rs 427 crore (US$ 63.67 million) for five years from 2014-15.  With a view to raise India's share in the global textiles trade to 10 per cent by 2015 (from the current 3 per cent), the Ministry of Textiles proposes 50 new textile parks. Out of the 50, 30 have been already sanctioned by the government (with a cost of US$ 710 million). Set up under the Scheme for Integrated Textile Parks (SITP), this initiative will not only make the industry cost competitive, but will also enhance manufacturing capacity in the sector. Problem faced by the industry The following are the main problem which are being faced by textile industry:-  Electricity problem  Labour problem  Raw material problem  Problem related to the production process  Market problem  Poor technological support  Lack of promotional activities
  17. 17.  Less availability of capital or capital sources  Problem of demonetization o Before demonetization three are working , Now only two shift are working o Payment to labours o Collecting the money factors Influencing productivity Internal factors 1) Plant & Equipment : The increased availability of the plant through proper maintenance and reduction of the time increase the productivity . Productivity can be increase by paying proper attention to utilization, cost, investment etc. 2) Technology: Innovative and latest technology improves productivity to a greater extent. The various aspects of technology factors to be consider are a) Size and capacity of plant b) Timely supply and quality of inputs c) Production planning and control d) Repair and maintenance e) Waste reduction
  18. 18. 3) Material: Effort to reduce material bring about improvement in productivity. a) Selection of quality material and right material b) Control of wastage c) Effective stock control d) Development of sources of supply 4) Human factor: Productivity is basically dependent upon human competence and skill. Ability to work effectively is governed by various factors such as education, training, experience etc. of the employees. Motivation of employee will influence productivity. 5) Product factor: In terms of productivity means the extent to which the product meets output . The cost benefit factor of a product can be enhanced by increasing the benefit at the same cost or by reducing cost for the same benefit. 6) Work method: Improving the ways in which the work is done improves productivity. 7) Management style: This influence the organization design, policy and procedures. A flexible and dynamic management External Factors
  19. 19. 1) Structural adjustments: It include social changes. Social changes such as women’s participation in the labour force, culture value, are some of the factors that play a significant role in the improvement of productivity. 2) Natural resources: Man power, raw material and land are vital to the productivity improvement. 3) Government and Infrastructure: Government policies and programme are significant to productivity practices of government agencies, transport , fiscal policies (Interest rate, taxes) influence productivity to the greater extent. 4) Economic factor: Economic factors can have both positive and negative impacts on the clothing industry. During economic boom periods, people have more disposable income. Hence, they may buy more clothing, increasing sales for clothing manufacturers, wholesalers and retailers 5) Legal and Political Factors: A number of legal and political macro environmental factors affect small businesses in the clothing industry. The industry has repeatedly been affected by issues such as workers' rights and child labor laws. Union workers in clothing manufacturing plants may picket their employers, especially if their wages or medical benefits are less favorable than workers in comparable industries.
  20. 20. SUGGESTIONS AND RECOMMENDATIONS 1) Cone system instead of unprocessed yarn The main raw material for cotton cloth is thread/yarn that is in its pure raw form without processing or finishing it. Government should provide it in cone form at cheaper rate so that the producers can include this in their budget. 2) Availability of electricity Electricity is only the source by which power loom are operated. Hence the state government must provided sufficient and regular electricity at a cheaper rate to the cloth producer. 3) Trained professional (waste management) Cotton cloth production involves various steps form processing of raw material to finished goods. And at all the steps there is some wastage , if the entrepreneur and government take managing all these wastage seriously by applying different modern techniques of waste management in the field of cotton cloth production.
  21. 21. EXPECTED SALES (APPROX) OF THESE COMPANIES: BSL LTD. – Rs.107 crores (Domestic) Rs.225 crores (export) SHARDA SPUNTEX PVT.LTD. – Rs.144 crores (domestic & export both) This sales is done by bhilwara manufacturing unit.
  22. 22. EXPECTED GROWTH OF THE COMPANY: BSL LIMITED – 7% TO 10% BSL Ltd is follows the traditional method for selling the product and not follow any specific marketing strategy. METHODOLOGY 1) Source of data a) Primary data is collected by me  Interview of manager  observation b) Secondary data is collected by  Internet 2) Area of study: SANGAM INDIA LTD, BSL LIMITED and SHARDA SPUNTEX PVT LTD.
  23. 23. CONCLUSION The main purpose of doing this project is to know the how textile industries are finances and what helps them to achieve sales targets. There may be some problems are raises by implementation of new policy but they are doing their work frequently. The main reason For successful running of the industry is the support of state government. The state government is helps to these companies by financing or lending.

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