1. 14323 51152934964 7001722029 SAMEER MUKESHKUMAR VISHAVADIYA MUKESHKUMAR
K VISHAVADIYA 09/05/1991
Financial Pre- Feasibility Report on RMG
Manufacturing Unit
Raw material
The basic raw material for the manufacturing of dress trousers is dyed woven fabric with different sorts of
finishes on it. The woven fabric that is used in the manufacturing of dress trousers is made of cotton, or
polyester/cotton (P/C), wool and other blends of man-made fibers. The weight of these fabrics normally varies
from 200-240 grams/sq. m (for the light qualities of P/C 65:35 fabrics) and from 240-300 gram/sq. m (for
heavy qualities of P/C 65:35 fabrics). In case of 100% cotton, light quality fabric weight should be at least 180
grams/ sq. m. For the fabric of blended 50/50 polyester/cotton, the weight varies from 100 grams/ sq. m
(plain) to 215 gram sq. m (twill). The weight of the finish is not included in these figures. Prices of these
fabrics range from Rs. 60 to Rs. 3000 per meter. During the last few years, the Dyeing and Finishing Industry
has performed remarkably. Traditionally, the Grieg fabric was being exported and the dyed fabric
was then imported at a higher price. But due to the installation of new dyeing plants, production of high
quality dyed finished fabric has increased. This has helped in the reduction of the cost of finished fabric. The
industry uses both locally produced and imported raw materials, but it mainly uses locally produced raw
material. Some exporters however, prefer to purchase yarn, and process it by paying service charges
according to their own requirement and buyers specification. This strategy also further reduces the cost of
fabric. Besides fabric, other raw materials used in manufacturing of men’s formal wear are
listed below:
Sewing thread
Buckles
Hooks
Buttons
Zipper
Labels
fusing (called ‘Buckram’ in the local language)
Packing Material
2. Labor
In order to achieve high degree of value addition, as in the apparel and textile made ups sector, the engine of
export growth, the skilled labor has a pivotal role in labor intensive processes like stitching.
This sector normally follows piecework system under “trolley system” (division of labor) in which one
garment is prepared by different persons during different stages of process. Normally there are 25-30 different
processes involved in dress trouser manufacturing. Each process has its separate predetermined piece rate.
The garment industry of Pakistan, especially export based, is dependent on job orders and thus, there is an
aversion to employ workers on long term basis. So the exporters prefer to employ labor under contract system.
This means that the designated contractor is the primary employer and the units in which the workers produce
goods are the secondary employers. The result is that there has been more productivity and efficiency through
contract workers. The exporters usually demand that the contractors must have trained and skilled workers on
their rolls, so that the
Production is accelerated and there is better quality and minimum hassle in training or orienting the workers
to produce as per requirements. However, the units, which have regular export orders, prefer to employ
permanent labor on piece rate system.
3. MACHINERY DETAILS
The industrial sewing machines are mainly imported from Japan and are capable of working at high speed up
to 4,500 stitches per minute. These are especially suitable for assembly line operation and are mostly used by
the organized sector. Besides industrial sewing machines, household sewing machines along with parts and
Electric irons etc. are also being imported. Imports of sewing machines and their parts are given in Table.
The other important machine used by the ready-made garment industry is the over locking, which is used to
trim the edges of cut cloth. In addition, specialized machines are used for cutting, making button holes and
stitching of buttons. According to an estimate, one specialized machine is required for very five sewing
Machines.
The investment layout in different years is given in the financial calculation
OTHER EQUIPMENT
4. OFFICE EQUIPMENT
LAND AND BUILDING
Project should be located where skilled manpower is within reach, and where electricity gas water and
public transport are easily available. Easy access to the normal public transport is must for a success of any
garment factory; otherwise the workers will have to be provided transport in company arranged buses.
Potential industrial locations in Bangladesh for setting up the unit include Dhaka, Chittagong etc. These
comparatively better and recommended locations because necessary technical and skilled manpower is easily
available. Secondly good quality and sufficient quantity of raw material at competitive prices is easily
available. Since this industry is export oriented, so Dhaka has the advantage of being near to seaport.
However, final selection of site will depend upon investor’s own choice and convenience. For manufacturing
unit with installation of the above said machines, approximately5, 300 sq. ft. area is required which includes
space for admin office, stitching unit and stores. It is recommended that the machinery unit may be
established in a rented building, which can be easily found in the industrial zones. The rent has been taken as
Rs. 65,000 per month.
TOTAL AREA REQUIREMENT
5. 7 PROJECT ECONOMICS
PROJECT ECONOMICS
PROJECT RETURNS
FINANCING PLAN
8 KEY SUCCESS FACTORS & THREATS
Key Success Factors
The changing global trade patterns offer more opportunities than it poses threats.
The apparel export product mix from Bangladesh is heavily tilted towards men's wear
and knitted garments. As the global market demand characteristics are changing,
woven segment of the garments is a much larger market than the knit garments and
offers higher price realizations. The following are the main key success factors:
Strong marketing skills/knowledge is required from entrepreneur
Assurance of high consistent quality
6. Assurance of on time delivery
Competitive rates
Cost efficiency
Better services to the customer i.e. claim settlement etc.
Better communication development with customers
Threats and Weakness of the Business
One major threat that garments manufacturers and exporters from under developing countries like Bangladesh
will have to face is the introduction of non-tariff trade barriers. While the free trade regime is increasingly
gaining foothold in the international export arena, developed countries are becoming increasingly selective
in their import preferences. Issues like compliance to environmental standards and self-defined working
environment can severely restrict exports from the developing countries. The main threats and weakness of
the business are as follows:
Continuous increase in utility rates
Non friendly attitudes of Government agencies
Less productive labor due to lack of education and training
Lack of market research especially in prospective markets
Growing demand for International Standards Certifications
Lack of financial and human resources to attain immediate certification.
9 REGULATIONS
For an exporter, registration is compulsory with Income Tax Department, Chamber of Commerce and
Industry, Sales Tax Department and Export Promotion Bureau.
Income tax on export is deducted at source on export proceeds at the rate of 0.75%, which is full and final
discharge of income tax liability.
Sales tax on export is charged at zero percent called zero-rated and whole input sales tax consumed in
exports is refundable.
If the project is 100% export oriented there is an exemption of custom duty, sales tax, income tax, on the
import of machinery by an exporter.
Government provides an export rebate of 2.62% of the F.O.B value on Trousers export.
