TIRUPUR KNITWEAR - CLUSTER STUDY

A mini-project in Managerial Communication

Submitted by
Kirthiga Sekar Kirubanand .K Umamaheswaran .M
(08AA19) (08AA20) (08AA43)
Under the guidance of
Ms. K. Srigayathridevi December 2008- January 2009
PSG INSTITUTE OF MANAGEMENT PSG College of Technology (Autonomous and affiliated
to the Anna University) Coimbatore - 641014
1
ACKNOWLEDGEMENT
We thank the Almighty for giving us strength and courage to complete the project
We would like to express our deep sense of gratitude and profound thanks to our
respected guide Ms. K. Srigayathridevi, Lecturer, PSG Institute of Management,
Coimbatore, for her constant support and valuable suggestions during the course
of this work. We wish to express our deepest sense of gratitude and thanks to Mr
.Sakthivel, President of Tirupur Exporters Association (TEA), owners of various
knitting, dyeing and garmenting companies, for providing us valuable information
that was very helpful for completing this project. We also extend our sincere t
hanks to our beloved parents and most of all, our fellow team-mates, for their c
onstant encouragement, prayers, tolerance, patience, support and advice.
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TABLE OF CONTENTS
S.No. 1 Introduction
TITLE
PAGE NO 1 2 2 4 4 5 5 6 7 10 11 14 17 17 17 18 18 20
1.1 Advantages of Cluster Study 1.2 Tirupur As a Cluster 1.3 Principles of Clust
er Approach 1.4 Features of Knitwear Industry 1.5 Opportunities in the Textile C
luster 1.6 Garment Outsourcing 1.7 Industry 1.8 Processes involved in the Indust
ry 1.9 Impact on Economy 1.10 History & Background 1.11 Geography 2 3 Objectives
of the Study Methodology 3.1 Research Purpose 3.2 Research Strategy 3.3 Researc
h Approach 4 TEA(Tirupur Exporters Association)
3
4.1 Cluster Development Methodology 4.2 Cluster focused Approach by TEA 4.3 Proa
ctive Role of TEA in Cluster Development 4.4 5 Dependence on Government for Infr
astructure Improvement Role of Government in the Cluster 5.1 Cluster Initiatives
for Infrastructure Transformation 5.2 Infrastructure Leasing & Financial Servic
es Ltd. (IL & FS) 5.3 Leveraging of Funds 5.4 Institutional Support 5.5 Benefits
of Cluster Development Programme 6 Analysis & Interpretation 6.1 Decline in Gar
ment exports by 10% 7 Findings & Conclusion 7.1 Issues to be addressed based on
SWOT 7.2 Networking among Firms in Cluster 7.3 Human Resources 7.4 Community and
Local Culture of Cluster 7.5 Embeddedness with Locality 7.6 Globalization Facto
r 7.7 Environmental Issue 8 Current Issues of Concert
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21 22 22 24 24 25 25 26 26 27 27 28 33 33 34 34 36 37 37 37 38
9
Discussions 9.1 Reverse effects of Globalization 9.2 Tax Issues 9.3 Pollution Pr
oblem 9.4 Technology Factor 9.5 Employment Law 9.6 Co-ordination among various G
overnment Agencies 9.7 Pending Payment Issues 9.8 Production Policy 9.9 Single W
indow Policy
43 46 47 47 47 48 48 48 49 49 50
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Conclusion
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1. INTRODUCTION
The term ‘cluster’ indicates a sectoral and geographical concentration of enterprise
s, which produce and sell a range of related products and are, thus, faced with
common challenges and opportunities. These clusters have been in existence for d
ecades and sometimes even centuries. India has 388 documented industrial cluster
s, around 400 handloom clusters, about 3,000 handicraft clusters and 2,800 micro
-enterprise clusters that contribute significantly to its economy, and provide e
mployment to more than 20 million people. According to one estimate, clusters ac
count for 77 percent units, 72 per cent employment, 61 percent investment, 59 pe
r cent output and 76 per cent exports of small scale industries. Among the large
r clusters, it is worth mentioning those of: Panipat accounting for 75 per cent
of the total blankets produced in the country. Tirupur, which is responsible for
80 per cent of the country’s cotton hosiery exports. Agra with 800 registered and
6,000 unregistered small scale units making about 150,000 pairs of shoes per da
y with a daily production value of $1.3 million and exports worth $60 million pe
r year. Ludhiana, a city that is well known as the Manchester of India, which al
one contributes 95 per cent of the country’s woolen knitwear, 85 per cent of the c
ountry’s sewing machines and 60 per cent of the nation’s bicycle and bicycle parts.
Surat, which cuts and polishes three-quarters of the world’s diamonds in several h
undred “factories” employing over 300,000 cutters. What explains and growth of speci
alized supplier of raw material, component and machinery, sector specific skills
etc. It favours the emergence of technical, administrative and services. Histor
ical accidents and financial services create a conducive ground for Externalitie
s development of inter-firm cooperation and also cooperation among public and pr
ivate institutes to promote local production, innovation and collective learning
. Clusters develop in the form of similar enterprises, springing up near each ot
her in a “metoo” fashion, such as cotton knitwear units at Tirupur in Tamil Nadu.
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1.1.
Advantages of Cluster Study
Clusters Provide the Basis for Heterogeneity. Growing Recognition of Cluster Con
tribution. Provide Basis for Designing & Undertaking Holistic Inter-linked Actio
n at the Local Level. Cluster Approach Identified with Private Sector Driven Mod
el with Govt. as Facilitator. Flavour of the Decade in International Domain.
1.2.
Tirupur as a Cluster
Tirupur, Tamil Nadu is the Knitwear cluster of India. This cluster is widely rec
ognized as a dynamic’ cluster with necessary vertical’ depth, critical mass of ent
erprises as also appropriate factor conditions. This has helped it to be largely
export oriented in terms of over eighty percent of its €1.3 billion a year turnov
er. The growth of the cluster has been propelled by strong associations. Our int
erventions emphasized on cluster wide dissemination on several critical areas as
also catalyzing several new pursuits.
Tirupur has traditionally manufactured knitwear and had especially established i
ts name in India in the manufacture of cotton undergarments. In the 1970’s, as a r
esult of collaboration with an Italian cluster, Tirupur began to exploit opportu
nities in the export market. Over the last two decades, Tirupur has emerged as a
leading export cluster in knitwear and has established its presence in Europe,
US and in the Pacific.
The Tirupur cluster has grown as a highly linked (although informal) cluster of
units which together convert cotton to knitwear products. Individual units are h
ighly specialized at the manufacturing of fabric, dyeing, processing, knitting a
nd export marketing. As of date, over 5000 units in Tirupur work in the cluster
and achieve an aggregate export volume of over USD 1 billion.
About 45 per cent of India’s garment are in the form of knitwear, and here the Tam
il Nadu centre of Tirupur plays a pivotal role, generating as much as 80 per cen
t of knitted garment exports; in other words, about 4 per cent of India’s total ex
port trade. Known as ‘T-Shirt
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City’, the industry in this town started with the production of low valued cotton
hosiery items, mainly under garments during the 1930’s. Knitting to this city was
brought by Gulam Kadar in 1937 who established “Baby Knitting Industries” in Kaderpe
t area of Tirupur. The Tirupur cluster comprises around 5,000 units which are in
volved in one or the other activities. From being the producers of basic knit ga
rments for lower end of the domestic market, Tirupur knitwear cluster has today
a diversified production range comprising Tshirts, polo shirts, sportswear, swea
t shirts, ladies dresses, children’s garment, nightwear, etc. Knit Fair Complex, l
ogistics, fashion institute in collaboration with NIFT and the like. Among the i
mportant ongoing projects being taken up is an apparel park of 65 units in a 175
acre plot.
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1.3.
Principles of Cluster Approach
1. Demand driven i. Demand creation an integral component ii. Bottom-up approach
2. Targeted at intermediaries i. Not individual firms ii. Institutions, consort
ia, industry associations 3. Flexible i. Wide variety of themes, actors, ideas a
s per cluster ii. Dynamic and responsive to changing needs
1.4.

Features of Knitwear Industry

Low cost labour force, sizeable supply of fabric, raw material and spinning and
dyeing facilities.

Existence of many associations for the knitwear cluster well connected with each
other

TEA (Tirupur Exporters Association) works together with the Government and local
companies to ensure better infrastructure and other facilities for the cluster.

Design oriented production – companies investing in design proposals to clients Fo

rmation of NIFT TEA FASHION INSTITUTE – school for apparel design set up to help t
he exporters

Major exports to European brands : Upim, Diesel, Marlboro, Rinascente, Champion,

Liberti, C&A, Wallmart, JC Penny, GAP, Mark & Spencers, Sara Lee,Tomy Hilfiger,
Karstadt Quell etc

Tirupur garment exports amount to €1.6 billion international market and €454.5 milli
on in the domestic market.
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1.5.

Opportunities in the Textile Sector

Global Textile and apparel trade is estimated to be €340 billion Indian industry e
stimated at €35 billion with exports of €12 billion and employs 35 million people

India is the third largest producer of cotton, largest exporter of yarn (25% of
world cotton yarn export)

India is a major player in the home textile segment (61% of world loom capacity)
1.6.

Garment outsourcing
Walmart, Levis, Gap, JC Penny, Marks & Spencer, and other foreign labels are buy
ing more and more garments and fabrics from India.

Walmart alone bought €1.6 million in the year 2005 and it intends to increase this
to € 2.3 billion in the next year. European giant GAP is also outsourcing apparel
from India.

Singapore based Crocodile International has announced its plans to invest an add
itional €.39 million.

India is also developing design skills that cover different fabrics and differen
t markets.

The Indian silk industry, which is known for its finery and masterly brocades, a
re also a great strength to the textile industry.
SMEs (Small/Medium-sized Enterprises’) operating in these clusters derive a clear
competitive advantage from: The proximity to sources of raw materials. The avail
ability of suitable business development services. The abundance of customers/bu
yers attracted by the cluster tradition in that industry. The presence of a skil
led labor force.
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1.7.
Industry
Although
Tirupur is a small city compared to Coimbatore, it is the centre of Tam
il Nadu s cotton knitwear industry and successfully markets its products in Indi
a and overseas. It is one of the fastest growing city in India in terms of Indus
try.[7] It is called the Knits Capital of India as it caters to famous brands an
d retailers from all over the world. Nearly every international knitwear brand i
n the world has a strong production share from Tirupur. It has a wide range of f
actories which

export all types of Knits fabrics and supply garments for Kids, L
adies, Men s garments - both underwear and tops. The city is known for its hosie


ry exports and provides employment for about 300,000 people. Some of the world s
largest retailers including C&A, Wal-Mart, Switcher, Diesel, ARMY, Tommy Hilfig
er, M&S, FILA, H&M, HTHP, Whale, Reebok, VALUE, PitStop, 100% import many textil
es items and clothing from Tirupur. There are many export Houses in Tirupur succ
essful and fast growing like Eastman Exports , PGC Industries-Prem Durai Exports
(Prem Groups), Stallion Garments, Statesman Fashion, Regency Garments, RBR , SC
M , SP , Poppys, RF Garments ( Rite Fit garments),UNITED APPARREL. A large marke
t for export reject pieces also exists centered in the khaderpet locality close
to the railway station. Even though the city is very prosperous, the infrastruct
ure is very minimal. The city grew very quickly due to the high demand for manuf
acturing for the popular clothing brands mostly in the U.S. and Europe. But the
modern machinery used and the availability of skilled labour, enabled this city
to prosper and be competitive internationally. The lack of infrastructure facili
ties comparatively for the foreign exchange which the city brings is a big negat
ive point to be noticed. The Tirupur Exporters Association (TEA) and other assoc
iations are taking actions directly to get some sort of facilities done (like th
e third water scheme and NAP). Tirupur is also known for its companies which hav
e achieved major certificates and is showing an average growth of 40% per year s
ince 1990.
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The association formed by Exporters of Tirupur (TEA) is one of the most successf
ul association in India trying hard and been successful in helping the trade in
Tirupur.
1.8.

Processes involved in the Industry

Hand processing: yarn formation
o o
Wool Flax

Machine Processing: yarn formation

o
Cotton

Cotton Gin Picking Carding Combining the Slivers Spinning Plying

Hand Processing- Fabric Formation

o o o o
Knitting Crochet Lace Weaving

Loom Process

Machine processing: fabric formation

o o o
Knitting Lace Weaving

Decoration
o o o
Dyeing Bleaching Embroidery
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Garment production is organized in a number of stages: the major stages are knit
ting, dyeing and stitching, while the minor stages include calendaring (shrinkag
e control), printing and curing.
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Most of these stages require some amount of fixed capital, making this industry
quite different from stitched garment production which relies mainly on variable
capital. The direct and indirect exporters will typically own the fixed capital
(machinery, etc.) necessary for some stages of production, but not all of them.
For the rest of the stages they will employ jobworkers, who are specialized pro
ducers owning machinery only for a single stage. Job-work and the use of indirec
t exporters allows for decentralization in the production process and is one rea
son why there can be large variations in the capital intensity of production (me
asured by the ratio of the amount of capital that the company owns to its produc
tion) in the population of direct exporters. However, such decentralization has
costs of its own. Quality appears to suffer and delays in shipments, particularl
y during the peak production season, are more frequent. From our conversations w
ith bankers in Tirupur and officers in the Export Credit. The industry produces
knitted garments and is largely focused toward exporting. Most firms produce t-s
hirts, targeted at low-end retail outlets in Europe and the U.S. There are essen
tially three types of firms in the industry: direct exporters, indirect exporter
s, and job-workers. Direct exporters are the ones who receive orders from abroad
. Once they have an order they often pass on a fraction of the order to one or m
ore indirect exporters. Indirect exporters are independent garment producers who
are entirely responsible for their share of the order, delivering the finished
product to the direct exporter prior to shipment. Guarantee Corporation (ECGC),
a government agency that insures exporters, it appears that such delays often re
sult in orders being rejected by foreign buyers. This is why more capital intens
ive firms, i.e. firms that do not rely heavily on job-workers and indirect expor
ters, are considered to have an advantage Tirupur’s success as an industrial clust
er nevertheless owes a lot to the presence of these indirect exporters and job-w
orkers: one reason the Outsiders come to Tirupur is because they have access to
the indirect exporters and job-workers, and therefore can go into business witho
ut investing in a fully vertically integrated plant. The fact that Tirupur acts
as a market and provides a way in which buyers can find exporters is also presum
ably important, at least for firms that are starting out.
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1.9.
Impact on Economy
The Indian Textile Industry is growing at 20% and accounts for 4% of India’s GDP.
It contributes 14% to the Industrial Production and employs about 35 million peo
ple. It accounts for 21% of India Gross Export Earning. Foreign Direct Investmen
ts inflows worth €681.59 million have been received by the industry between Aug 91
and May 06, accounting for 1.29% of total FDI inflows in the country.
1.9.1. Position of the Indian Textile Industry in the World Textile Economy
India contributes 20% to world spindleage capacity, the second highest spindleag
e in the world after China. It contributes 6% to the world rotorage and 62% to t
he world loomage. However in High-tech Shuttless Looms this industry’s contributio
n is only 4.1% to the world Shuttless loomage. 12% to the world production of te
xtile fibres and yarns is from India and is the largest producer of Jute, second
largest producer of silk and cellulose fibre / yarn, third largest producer of
cotton and fifth largest producer of synthetic fibres / yarns.
India’s key assets include a large and low-cost labour force, sizable supply of fa
bric, sufficiency in raw material and spinning capacities. On the basis of these
strengths, India will become a major outsourcing hub for foreign manufacturers
and retailers, with composite mills and large integrated firms being their prefe
rred partners. It will thus be essential for SMEs to align with these firms that
can ensure a market for their products and new orders.
Indian Textile exports consist of • Cotton yarn and fabrics, • Man-made yarn and fab
rics, • Wool and silk fabrics, • Made-ups and a variety of garments, knitwear • Woven
and silk besides handmade
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1.9.2. Indian Exports
Major export destinations for India’s textile and apparel products are the US and
EU, which together account for over 75% of demand. Exports to the US have furthe
r increased since 2005, post the termination of the MFA (Multi Fibre Agreement).
Analysis of trade figures by the US Census Bureau shows that post-MFA, imports
from India into the US have been nearly 27% higher than in the corresponding per
iod in 2004-05.

Benetton, the world s leading apparel manufacturer and marketer, makes 130 milli
on garments annually with a turnover of €1.42 billion.

Exports from the country will touch €8.75 billion in 2007-08, up from €15 billion ex
pected in the fiscal just ended (2006-07).

The current turnover of the cluster is about €1.3 billion (the output mix include
about €959. 3 million of direct exports, €174.4 million of indirect exports and dome
stic market sale of about €174.4 million).
1.10. History & Background
Tirupur has carved its name in the Indian history even before her independence.
Tiruppur Kumaran, one of the freedom fighters was killed during lathi charge whe
n he was on a patriotic march in Kumaran road without letting down Indian

nation
al flag. It still remains as a great inspiration to its people. Tirupur s main r
oad is named after its main hero, Kumaran. Another incident is that C. N. Annadu
rai, former chief minister of Tamilnadu

met Periyar E. V. Ramasamy for the first
time in Tirupur during Periyar s campaign which is considered to be a great tur
nover in the Indian political history. Tiruppur, situated near Coimbatore which
is "The Manchester of South India", is known by various names such as "Dollar Ci
ty", "Knit City", "Cotton City" and mainly "History Centre". Tirupur in Tamil Na
du is one of the most successful and vibrant garment clusters in India. It is po
pularly known as “Banian City” of the South India is located 60 kms away from Coimba
tore city. It has come a long way from a small cotton-marketing centre with a fe
w ginning factories to become a prominent cluster of small and medium manufactur
ing enterprises gainfully engaged in the production and export of a range of kni
tted apparels. This township started with the production of low valued cotton ho
siery items, mainly the under garments during the 1930’s. Knitting to this city wa
s brought by Mr. Gulam Kadar in 1937.
16
He established “Baby Knitting Industries” in Kaderpet area of Tirupur. It was follow
ed by the establishment of second knitting unit by a woman, Mrs Chellammal, in t
he name of Chellemmal Knitting. The first export of knitted garments was made to
US and Ghana by Mohan Knits through a Bombay Merchant Exporter in 1972. However
, it could not be sustained. In the later years, the entrepreneurial spirit and
heavy competition for the domestic market forced the manufacturers to look beyon
d national boundaries. Thus, in 1980s a few units made sustained efforts to expo
rts and succeeded. In 1987 the exports revenue of Tirupur was Rs.75 crores. Sinc
e then, it has not looked back and the exports during the year 2004 touched a fi
gure of more than Rs. 5000 crores contributing almost 80 percent of country’s expo
rts in this sector.
Tirupur was the second town in India to start a hosiery unit next to Calcutta. E
ven though the knitting came to Tirupur during 1920s, progress worth mentioning
took place only after 1935, when the first hand operated hosiery was set up. Til
l 1960, the cluster produced grey and bleached fabrics for inner wear for the do
mestic market. In 1974, the first export
17
consignment was made with the support from National Small Industries Corporation
(NSIC). During 1980, some entrepreneurs started producing T- shirts for exports
. Some of the Mumbai and Delhi based exporters opened their offices at Tirupur t
o source their knitwear requirements at Tirupur. From Rs.10 Crore export during
the year 1984, the export touched Rs.290 Crore during the year 1990. The momentu
m for export started during early 1990 after the formation of Tirupur Exporters
Association (TEA) to address the problems faced by the exporters. The growth of
knitting industry in Tirupur can also be attributed to the failure of agricultur
e crops over a period of time and the availability of yarn, the basic raw-materi
al for knitting from the nearby mills in Coimbatore. A few people also suggest t
hat the dry climatic conditions in the area also helped the growth of this indus
try. Before knitting the agricultural labourers were already exposed to the hand
woven textiles because of khadi movement started by Mahatma Gandhi. That also he
lped them to get into to the knitting process of textiles. Started in 1930s as u
ndergarment suppliers to domestic market, the number of knitting units reached a
round 450 in 1960.
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1.11. Geography
Coordinates: 11°11′N 77°15′E11.18, 77.25
Time zone
IST (UTC+5:30)
Area • Elevation
• 301.14 m (988 ft)
Population
5,50,826 (2005)
Codes • Pincode • Telephone • UN/LOCODE • Vehicle
• 641 6xx • +91 421 • INMAA • TN-39 and TN42
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1.11.1.
Demographics
As of 2001 India census, Tirupur had a population of 346,551. Males constitute 5
2% of the population and females 48%. Tirupur has an average literacy rate of 76
%, higher than the national average of 59.5%: male literacy is 82%, and female l
iteracy is 69%. In Tiruppur, 10% of the population is under 6 years of age.
1.11.2.
Politics
Tiruppur assembly constituency is part of Coimbatore (Lok Sabha constituency). N
ow Tirupur had been split in to Tirupur North & Tirupur south constituency. An M
P constituency also had been created in the name of Tirupur containing parts of
Coimbatore, Gobi, Palani Mp constituency. As Tirupur is an export hub, naturally
communists both CPI & CPI(M) are strong in urban areas ADMK and DMK area also h
ave significant presence. BJP & Hindu munnani had good base here.
1.11.3.
Economy
Tirupur is the "Knitwear capital" of India. Tirupur contributes to a huge amount
of foreign exchange in India. It has spurred up the textile industry in India f
or the past three decades. Its economic boom boosts the morale of Indian industr
ialists. Great thing about Tirupur economy is that it is ever growing. It was es
timated that the export worth of Rs.1, 12,000 Crores achieved by Tirupur in the
year ending 2007. And the production from Tirupur for domestic needs stood at Rs
.14000 Crores.
1.11.4.
Landmarks
The landmark of Tirupur is the Noyyal river which divides the city into two halv
es, the north and the south, The railway bridge over railway station, Tirupur Ku
maran memorial statue near railway station, Town hall, Corporation memorial pill


ar (with Globe on its top). The school jevabay higher.sec.school has the India s
second largest number of students studying. It is remarkable that it is a schoo
l for girls.
20
1.11.5.
Transport
The nearest international airport is the Coimbatore Airport. Kumaran road is the
busiest road in city while Avinashi road, Palladam road, Kangeyam road, Dharapu
ram road, Mangalam road, PN Road, Uthukuli road, College road are the arterial r
oads of the city. The business district is located near the old bus terminal are
a, but it is slowly expanding to the north. Tirupur also has a railway station a
nd two bus terminals. Tirupur is well connected by trains to Coimbatore, Bangalo
re, Chennai, New Delhi, Mumbai, Calcutta, Kochi, Mangalore, Nagercoil, Kumbakona
m, Madurai, Vellore and Trivandrum. Most of the tourists spots in Kerala And Tam
il Nadu are just two to three hours drive from Tirupur viz. Kodaikanal, Ooty, Co
onoor, Pollachi Topslip, Neliyampathy, Valparai, Kothagiri and Palani. Tirupur i
s well connected by moffusil bus services to Coimbatore, Erode, Mettupalayam, Po
llachi, Udumalpet, Bangalore, Mysore, Kollegal, Ooty, Coonoor, Kothagiri, Gudalo
re, Sathiamangalam, Gobichettipalayam, Chennai, Trichy, Devakkottai, Ariyalur, T
anjore, Nagercoil, Kumbakonam, Madurai, Tirunelveli, Rajapalayam, Virudhunagar,
Theni, Cumbum, Rameswaram, Tiruchendur, Chidambaram, Tiruvannamalai, Hosur, Sale
m, Dharmapuri, Krishnagiri, Palani, Dharapuram, Karur, Tiruvarur, Kodaikanal, Va
lparai, Podi, Tirupathy, Vellore, Palghat, Tiruchur, Guruvayur and Ernakulam.
1.11.6.
Media and Communication
Leading Tamil, English and other regional languages newspapers are available in
Tirupur. English dailies such as, The Hindu, The New Indian Express, Deccan Chro
nicle and Deccan Herald are available in Tirupur. Tamil dailies such as Thinatht
hanthi, Dinamalar, Dinakaran, Dinamani and Maalaimalar are also available in Tir
upur. Tirupur falls under Tamilnadu Telecom circle. The city has several Local T
V Channels.
21
2. OBJECTIVE OF THE STUDY
Our objective is to study the financial, marketing and operational details of th
e companies in the cluster so as to understand the effects of various recessions
such as recent power failure, Dollar price fluctuations and employee union issu
es on the various types of industries in the cluster viz, small, medium and larg
e scale industries.
3. METHODOLOGY 3.1. Research Purpose
Traditional Economic Development Programmes had failed. Key goals missing – T
mpetitiveness of business Solution for individual enterprises rather than all No
strategy involved Limited outreach No organic relation among programme activiti
es Mostly programmes are supply driven No accountability of fund spent
3.1.1. Issues
There is a global search in process for the solution to cluster development Whil
e much has been learned, the lessons often are misapplied Starting with a clear
understanding of clusters and the purposes of cluster policy are necessary in or
der to create the right policies and programs While there is no single “magic bull
et,” there are guidelines that can be used that can help foster business clusters
Care must be taken to tailor specific programs and policies to the local context
22
3.1.2. Problems Faced in the Cluster:
Tirupur traditionally suffers from the poor availability of a range of infrastru
cture services. While the industry associations representing the clusters have m
ade significant efforts to improve infrastructure, these efforts were not materi
alizing in improved infrastructure stock at the pace at which export opportuniti
es were materializing. As a result of the infrastructure constraints the Tirupur
cluster was unable to move up the value added chain and was unable to expand in
terms of its scale of operations
3.2.
Research Strategy
The action plan to improve the ICT intervention at the Tirupur cluster follows a
three pronged strategy, Improvement in managerial understanding & skills toward
s ICT understanding Improvement in the availability/ quality of ISVs, and Promot
ion & participation of SMEs in business networks & e-marketplaces.
A system to coordinate the proliferating merchandisers with the suppliers is req
uired in order to minimize their cost of traveling and thus reduce the productio
n cycle. ICT can also facilitate the managers & entrepreneurs in the cluster to
establish networking with the various international design institutes & designer
s, to help them create new designs.
3.3.
Research Approach
IL&FS undertook the detailed development of the project and recommended an imple
mentation structure based on a Public -Private- Partnership (PPP) basis. In esse
nce, a Special Purpose Vehicle (SPV) under the Indian Companies Act was incorpor
ated in the name an style of New Tirupur Area Development Company Limited (NTADC
L). As a Public Limited Company the initial share holders of NTADCL were the Tir
upur Exporters Association (TEA), Government of Tamil Nadu (GoTN) and IL&FS. Thi
s company had a duly constituted Board of Directors with representation from all
stake holder groups. In addition, professional management was inducted in NTADC
L to develop and implement each aspect of the project.
23
3.3.1. Implementation method
• Understand the value chain with respect to market-diagnosis • Focus the markets (p
otential) • Install a trained Cluster Development Agent • Build TRUST with cluster a
ctors and among them • Help develop a common Vision & draw an action plan • Develop
local private capacities to execute (associations+BDS) • Network SMEs, BDS provide
rs & support institutions • Draw an Exit Strategy and withdraw
3.3.2. Tools Used
• Selection of cluster • Mapping • Diagnostic Study • Action Plan • Vision for the cluster
• Value Chain Analysis- Identification of pressure points and intervention • BDS- i
.e. Business Development Services • Bench marking of Best Practices • Cluster to Clu
ster learning • An external catalyst ---CDA (Cluster Development Agent) • Monitoring
mechanism
24
4. TEA (Tirupur Exporters Association)
Tirupur Exporters Association (TEA) is a dynamic association, formed in the year
1990 with 500 direct members. TEA offers lot of value added 20services to its m
ember like technical skill upgradation through NIFT-TEA, arranging contact with
buyers through IUF, disseminate market information government policy changes thr
ough their bulletin and Email.
Tea offers information about firms involved in manufa
ies yarn and threads compacting dyeing, tie and dye, bleaching and garment washi
ng knitting printing, offset, fusing embroidery fabric manufacturers and exporte
rs testing, certifying and scientific agencies computer software and peripherals
service providers packing materials dyes and chemicals spinning mills fairs and
exhibition promoters fire and safety equipments buying agents pre press printin
g
The achievements of TEA includes establishing a inland container depot India Kni
t Fair Complex for conducting trade fairs, Tea public school for fashion institu
te by signing a MoU with NIFT. Some of the special assignments taken up by them
are: Apparel park of 65 units in a 175 acre land Promotion of a common brand to
gain differentiation advantage
25
Strengthening and widening the road commonly NH-47 & NH-67 for carry transportat
ion and movement of goods.
4.1.

Cluster Development Methodology

TEA is the catalyst All projects are conceived by the ‘think tank’ in TEA based on t
he needs of industry and demands of members

The privilege of participating in any project is first given to members of TEA a

nd only when opportunities are available, the privilege is extended to others su
bject to the condition that they should become a member of TEA

For every project a separate Special Purpose Vehicle (SPV) is formed In the begi
nning, the President of TEA will be the head of the new SPV. Depending upon the
size of management team required for every project, other office-bearers and mem
bers who have specialized management experience are inducted into the management
team.

Central and State Government nominees are co-opted to the management team wherev
er they are partners in the project.

Secretarial services are rendered by TEA Secretariat. Initial spadework, prepara

tion of detailed project report, fund raising, financial tie up etc., are carrie
d out in the platform of TEA.

Simultaneously, a separate Secretariat with professionals and required communica

tion facilities is set up and the secretarial functions are transferred to the n
ew secretariat when actual work on the project is commenced.

TEA collects a service charge for services rendered. On completion of the projec
t, the participants in the project are free to select their own team for operati
on and maintenance of the facility.
4.2.
Cluster focused Approach by TEA
TEA was formed in 1990 with 20 exporters now 479 Life Members and 156 Associate
Members. Mr. Sakthivel, Founder, President’s approach from the beginning the was d
evelopment oriented
26
The leadership had a vision to achieve billion dollar exports in 10 years The fo
cus was on enhancing physical infrastructure Strong desire to demonstrate the po
wer of collective action.
4.3.

Proactive Role of TEA in Cluster Development

Physical infrastructure-water supply for industrial use, sewerage system with SI
TP for Tirupur

Town and road development Inland Container Depot Industrial Complex and Apparel
Park Trade Fair Centre Institute for Supervisory, Managerial and Creative manpow
er development School Education Quality management systems Skill upgradation in
designing
In the initial stages of growth, the inherent strengths was social capital, easy
availability of raw material and flexible specialization helped the industry mo
ve up on growth curve. The fast growth became the breeding ground for a number o
f problems and exposed the glaring short comings in many areas of industrial gro
wth, notably deficiencies in infrastructure, pollution control, manpower availab
ility and so on. TEA assumed a proactive role and executed a number of projects
independently and under Public -Private-Partnership (PPP) concept to address a w
ide range of issues inhibiting growth and development.
TEA Projects
TEA Public School-1995 o In a lush green area of 25 acres o Most modern teaching
facilities and aids o Each class has 20 students only o Initial investment US$
500,000 NIFT-TEA Knitwear Fashion Institute 1997 & 2008
27
o Having latest machinery, testing equipments, CAD and computer training facilit
ies o Highly qualified faculties o Conducting technical training programmes for
management executives o Access for industry to make use of the facilities o ISO
9001 certified o Total project cost US4$ 600,000 Domestic and Industrial water s
upply o By a SPV-NTADCL o 100 MLD water for domestic use o UG sewerage system fo
r Tirupur town o Project cost us$ 250 million India Centre-1997 o To conduct tra
de fairs of international standards o In a plot of 7 acres-two floors, 50,000 sf
t. fully air-conditioned built space for Knit Fair Centre built-in display stall
s o Two knitwear fairs every year for Summer and winter garments o Two fairs for
accessories and machinery o Investment US$ 1 MILLION Apparel Park-2005 o 60 uin
ts,15.00 lakhs sft.built‐in space of international standards for manufacture of kn
itwear o Fully self contained infrastructure facilities in 165 acres o Investmen
t in land, building and infrastructure‐Rs.77 crores o Investment in machinery Rs.2
00 crores E‐readiness centre o To disseminate latest ICT knowledge to cluster acto
rs o 4000 sq feet well furnished modern IT training centre with video E conferen
cing facilities o Place for ISV to meet local companies for ICT needs o Manageme
nt of Tirupur portal o Investment US$ 250000
28
4.4.
Dependence on Government for Infrastructure Improvements
Despite the concerted efforts of the Tirupur Exporters Association to improve th
e infrastructure in the cluster, budgetary constraints did not result in any maj
or investments. Furthermore, the implementation capacity of para statal agencies
were inadequate to implement the kind of large scale infrastructure transmissio
ns at the cluster level. As a result, infrastructure services were below desired
levels in terms of quality and reliability.
5. ROLE OF GOVERNMENT IN THE CLUSTER
Investments in the textiles sector can be assessed on the basis of three factors
: • Plan schemes such as the Technology Upgradation Funds Scheme (TUFS) Under the
TUFS scheme, a total of €15.9 billion has been disbursed for technology upgradatio
n. There are around 26 Apparel Parks in eight states in India, with a total esti
mated investment of €2.3 billion • Technology Mission on Cotton • Apparel Parks etc.
Specialized textile parks, apparel parks, EOUs and EPZs have been set up with im
proved infrastructure. The apparel parks operate as Special Purpose Vehicle and
are run independently by entrepreneurs. A competitive industry, Apparel has the
potential of achieving export earnings of €25.46 billion by 2010. Government suppo
rt has ensured that key policy changes in the fiscal regime have been made in th
e past two years, which would ensure rapid increase of clothing consumption as w
ell as the fibre consumption. A single rate will now be prevalent throughout the
country. The Tirupur Area Development Program (TADP): The TADP comprises of a w
ide range of infrastructure projects which collectively would significantly incr
ease the competitiveness and export potential of the Tirupur cluster. These proj
e cts include roads, telecom, power, effluent treatment, water supply, women’s wor
king hostels, R&D centers, logistic management systems etc. Based on a detailed
study the key lacunae that was required to be overcome was the availability of g
ood quality and consistent water. Accordingly, Phase I of the TADP comprised of
the implementation of water supply, effluent treatment, sanitation
29
and sewerage system and low cost sanitation. The other components of TADP were t
o be implemented as part of Phase II.
5.1.
Cluster Initiatives for Infrastructure Transformation
Recognising the foregoing the Tirupur Exporters Association (TEA) along with the
Tamil Nadu Area Development Corporation (TACID) a wholly owned Company of the G
overnment of Tamil Nadu, appr oached IL&FS to develop the Tirupur Area Developme
nt Program (TADP). The TADP comprised of a range of infrastructure services to e
nhance and support the competitiveness of the Tirupur cluster and sustain its ex
port drive. Industrial units in the Tirupur cluster agreed to undertake this exe
rcise on a commercial format wherein recovery of all investments would be effect
ed through the levy of user charges. The Government of Tamil Nadu and the Tirupu
r Municipality also indicated their willingness to support such an initiative.
5.2.
Infrastructure Leasing & Financial Services Limited (IL&FS)
IL&FS is an investment banking Institution established by Government of India ag
encies in 1987 to develop and implement infrastructure projects on a commercial
basis and provide a wide array of value added financial services. As the first I
nstitution focused on the infrastructure sector, IL&FS pioneered the concept of
commercialization using PublicPrivate-Partnership frameworks and a project devel
opment approach.
5.3.

Leveraging Of Funds
Central and State Govt, ILFS, ADB, IDBI, LIC, SIDBI, Banks, are shareholders in
NTADCL

Ministry of Industry, ICICI contributed for NIFT‐TEA Institute. Ministry of Indust

ry, GoI has sanctioned Rs.50.00 crores under IIUS. Ministry of Textiles contribu
ted for the Trade Fair Centre.
5.4.

Institutional Support
NIFT-TEA Knitwear Fashion Institute Premier Institute of Apparel Management (PIA
M) SIHMA Institute of Fashion Technology
30
Apparel Training and Design Institute (ATDC) The Textiles Committee Apparel Expo
rt Promotion Council (AEPC) Indian Statistical Institute (ISI) South India Texti
le Research Institute (SITRA) Sardar Vallabbhai Patel Institute of Textile Manag
ement Tirupur Exporters’ Association (TEA) South India Hosiery Manufacturer’s Associ
ation (SIHMA) Tirupur Dyers’ Association (TDA) KNITMA
ICT linkages among various cluster actors are relatively not very strong. Only T
EA uses ICT to communicate with the members. TEA, NIFT-TEA Knitwear Fashion Inst
itute, ISI and the Textiles Committee have their own websites. Organizations whi
ch have a national presence like Indian Statistical Institute (ISI), the Textile
s Committee use their websites for dissemination of a large portion of informati
on about the organizations and their activities. Website of TEA is linked with t
he websites of its other members.
5.5.

Benefits of Cluster Development Programme

Reduced Transaction Cost Comparative Advantage Improved Access to Information Mo
re Innovations High Rate of Enterprise Development Institutionalization of Succe
ss Potential Opportunities for Technology Upgradation Co-opetition Efficiency
31
6. ANALYSIS AND INTERPRETATION
We have analyzed the basic details of a group of 50 companies in the cluster. We
have got the details on the business ownership of the various firms so as to lo
cate the nature of cluster companies. We have identified the firms’ year of establ
ishment so as to calculate the average age of the cluster companies. We have ide
ntified the firms’ dependency on the other cluster companies so as to skeleton the
network structure of the cluster. We have analyzed the personal details of the
person-in-charge in a firm for a group of 50 companies in the cluster. We have c
lassified them all into 4 age groups so as to study the average age group of the
managers of the cluster. We have classified them all into 3 groups on the basis
of educational background so as to study the managerial capability of the manag
ers of the cluster with respect to education. We have identified their nature of
their family so as to analyze the family structure of the managers. Is there an
y influence of the family on the firms’ operation? The information regarding the n
ature of living, cost of living in the cluster, the progress and the operating e
nvironment of the cluster companies are collected. The above information helps u
s to analyze in detail the perception and personality traits of the person-in-ch
arge in a firm for a group of 50 companies in the cluster. Moreover, we have col
lected the following financial information from the cluster companies. Initial i
nvestment Current worth of the firm Sales Volume Firms’ Turnover for the past five
years
The above information helps us to classify the cluster companies into three majo
r groups based on its operations.
32
Large Scale Medium Scale Small Scale
The information on the firms’ Turnover for the past four years makes us identify t
he operating efficiency of the cluster companies. Year 2004-05 2005-06 2006-07 2
007-08 Small scale (in lakhs) 34 43.5 55 36 Medium scale (in lakhs) 39 40 43.7 4
8 Large scale (in crores) 6.1 11 19 23.5
6.1.
Decline in Garment exports by 10%
During the Financial Year 2007-08, the exports from Tirupur has declined by 10%
and clocked Rs. 9,950 crores as against Rs. 11,000/- crores registered in 2006-0
7.
Tirupur was usually experiencing 15% growth after abolition of quota and if the
decline of 10% in 2007-08 is included, then the total export loss from Tirupur i
s 25%.
Central Government has also been requested for removal of Fringe Benefit Tax, pa
yment of all Service Taxes, reduction of interest rates and refund of state levi
es and taxes.
33
Turnover of Small scale industries
60 50
Turnover (in lakhs)
40 30 20 10 0 2004-05 2005-06 2006-07 2007-08 Year Small scale (in lakhs)
Turnover of Medium scale industries
50
Turnover (in lakhs)
40 30 20 10 0 2004-05 2005-06 2006-07 2007-08 Year Medium scale (in lakhs)
The 10% decline in Tirupur Export has happened first time in the history of Tiru
pur exports since 1985. Due to this, there will not be any off take in the TUF S
cheme for modernization / expansion of the garment units.
34
Turnover of Large scale industries
25 20
Turnover (in crores)
15 10 5 0 2004-05 2005-06 2006-07 Year 2007-08
Large scale (in crores)
The information on the other investment helps us in making decision about the se
lf-sustaining nature and financial dependency of the cluster companies. The diff
erence between the initial investment and the current worth of the firm in relev
ance to the operations of the firm gives us the growth of the individual cluster
companies. The ratio between the sales volume and the turnover gives us the ope
rating price and thus gives us the information on the nature of customers of the
cluster companies. We have analyzed the decision making capability and leader p
erception of the person-incharge in a firm for a group of 50 companies in the cl
uster.
35
Number of labourers
24 63 Small scale Medium scale Large scale 250
Higher exports Low export orders Stagnant No effect
Small scale (in %) 9.09 54.55 13.64 22.72
Medium scale (in %) 30 40 10 20
Large scale (in %) 44.44 33.33 16.67 5.56
Small scale
Number of industries (in %)
60.00 50.00 40.00 30.00 20.00 10.00 0.00 Small scale (in %)
36
Medium scale
Number of industries (in %)
40 35 30 25 20 15 10 5 0 Higher exports Low export orders Stagnant No effect
Medium scale
large scale
Number of industries (in %)
50 40 30 20 10 0 Higher exports Low export orders Stagnant No effect
large scale
7. FINDINGS & CONCLUSION
The overall assessment of Tirupur and its textile industry can be brought throug
h the following SWOT analysis which helps in identifying the issues that are to
be addressed in the future.
37
7.1.

Issues to be addressed based on SWOT

Access to market information and emerging market trends Product innovations and
diversification Level of design capability Level of skills and knowledge related
to quality, productivity, financial, marketing, etc.

Operational costs by way of process improvement/productivity improvement and opt

imal use of out puts.

Awareness about emerging technology, management and market environment. Organize

d/institutionalized mechanism/systems for sourcing of raw materials, marketing.

Access to avail of institutional credit for technology upgradation and expansion

of the units.

Information about various Government EXIM policy schemes/non-Governmental financ

ial support schemes.
38
Proactive initiation on environmental related issues Exposure to better work pra
ctices and technology in the area of knitting/processing. Capacity building for
Direct Exports.. Creation of critical infrastructure such as effluent treatment,
uninterrupted power supply, road development and provision for single stop inte
rnational class manufacturing centre
7.2.
Networking among Firms in Cluster
Networking is an important element in all SSI clusters. All small units of clust
ers are equally responsible to create the whole web of cluster. Firms have conne
cted through each other by vertical and horizontal integration. It has been repo
rted that – Tirupur Cluster is still lacking of vertical integration although, pro
cess of modernization is bringing the chances for more vertical integration amon
g firms. The qualitative finding has been that Tirupur has started with a very s
mall level of units but later it developed its networking. Also, networking help
s the clusters to move in specific fields. The entrepreneurs here reply that the
re are a large no. of firms concentrated in only one industry i.e. knitwear garm
ents industry. A successful joint venture of Switcher brand at Tirupur is a good
example of nice networking within cluster.Local and other organizations play an
important role in development of networking base inside the cluster and bring a
boom in regional economies performance. For example, the AEPC sponsors buyer/se
ller meetings, organizes trade delegations, individual sales tours and conducts
market survey. Also, it collects trade data, both locally and internationally.
7.3.
Human resources (HR)
Human capital is the backbone of this cluster. Cheap source of labor and high po
tential in workforce brings competitiveness in the cluster. As per findings, at
Tirupur cluster, labor availability, performance and quality are major elements
that affect the development of the cluster and play a big role in improving regi
onal economy performances. Tirupur has got prime position in using its human res
ource capacity as the owners and the workers are committed to their work and the
y always co-operate with each other. Entrepreneurs report that for the past 10 y
ears they have had never faced any severe labor problems or strikes and they hav
e abundant skilled workers and professionals. The composite units/firms are
39
gradually becoming more organized in executing the works. Also, its control over
the industrial unrest is by nature of the social relations.
7.3.1. Skills and training
Proper educational and training institutions help the cluster to use its maximum
capacity of human resources. At Tirupur, NIFT - Fashion educational institute r
un by ‘TEA’ (Tirupur Exporters Associations), SIHMA Fashion Institute run by the Sou
th India Hosiery Manufacturers Associations are main source of producing efficie
nt workforce for this cluster.
7.4.
Community and Local culture of Cluster
Social and communities linkage is also found as important elements behind the de
velopment ofcluster. Social and cultural activities and functions always help in
developing a bond within this cluster. Involvement of local communities makes t
he cluster more successful.
40
Cutting Division
Stitching Division
Checking Division
Ironing Division
41
7.5.
Embeddedness with Locality
Embeddedness with a locality is a big factor behind development of any cluster;
it creates excellent bonds between actors inside the cluster. Conducive weather,
determination and commitment, and easier availability and quality of work force
in the firms involved in Tirupur cluster are possible due to value embeddedness
with locality. Also, the present status of regional economic factors like tax s
tructure affects the embeddness with locality, as per findings in the Tirupur cl
uster case. The Indian government support is not up to the mark for the betterme
nt and development of this Industry.
7.6.
Globalization Factor
Now-a-days, globalization is highly affecting the elements of development in SSI
clusters. To compete in the global market clusters should be competitive with a
ll elements lying inside the cluster. For example, the rise in Tirupur cluster i
s mainly due to the performance of the firms & availability and quality of labor
. The discouraging policy of Indian government towards SSI clusters reduces its
competitiveness in global market if we compare it to other countries like China,
Malaysia, Singapore and others. The cost of processed knit fabrics is 12 to 18%
less in China when compared to India. But when we look into detail, the fabric
quality and garment sewing workmanship in India is far better than China.
7.7.
Environmental Issue
Environment has been important to any cluster development. Tirupur has progresse
d rapidly in last decades and now some of firm set up their high quality plants
to get better produce of their investment although most of firms using tradition
al system of production plant that create lot of pollution and waste product. Th
ere is any fundamental measures have been taken to control the polluted environm
ent. Where as it seems that entrepreneur not much interested to talk on environm
ent in Tirupur cluster but, there should be independent agency or government age
ncy to look after the clean and green environment at Tirupur.
As mentioned earlier, government policy is highly affecting elements in the tren
d of cluster development in a regional economy. As mentioned in preceding chapte
rs, government policy is central to the eradication of all problems of clusters
whether it is infrastructure issues,
42
financial problem or sickness in an SSI cluster. At Tirupur, local entrepreneur
does not assume that government policy has ever been in their favor. They mentio
ned that central government of India not taking much attention on them even this
cluster has biggest contributor in export of India then early ages. It has been
reported that, government officer behave unresponsively with small entrepreneur
that shows that lacking of appropriate policy. Here, it should be single window
policy implemented to make things fast at business environment, we will see mor
e on it in next chapter.


8. CURRENT

ISSUES OF CONCERN Restoration of duty drawback rates on knitted garm
ents
The Department of Revenue, Ministry of Finance while announcing the Duty Drawbac
k Rate for 2008-09, has reduced the said rate for cotton knitted garments from 1
1% to 8.8% and the value cap has also been reduced for knitted garments to the d
ismay of Tirupur Exporters Association.
Currently, the garment exporting units are undergoing severe strain in price fro
nt, due to increase in input costs like, yarn cost, power cost, processing charg
es, transaction cost and are struggling to survive in the competitive global mar
ket. The cost of escalation has happened mainly due to increase in petroleum pro
ducts, only thing that helps is the spiraling oil prices in the global market. T
he exporters have always looked up to the government whenever any factors affect
ed business performance and the government has always been kind enough to give s
ops / solutions to bail out the exporters from the crisis after studying the con
cerned factors.
Owing to this, the exporters are literally not in a position to enjoy the benefi
t out of it. Moreover, in recent period, the currency fluctuations are quite abn
ormal and also unpredictable.
Added to this, Tirupur exporters have alone lost more than Rs. 100 crores in der
ivatives deals since the exporters had resorted for derivative deals mainly to o
ffset the losses that may be incurred due to continuous falling of rupee against
dollar.
43
‘Rupee Export Credit Interest Rates’
Reserve Bank of India has issued a Circular on August 01, informing the closure
of the Interest Rate subvention of 4% given on Export Credit with effect from Se
ptember 30, 2008 and this effect has come at a time when the banks are revising
their Prime Lending Rate (PLR) upwards. The interest rates should be at par with
competitive countries to be equally competitive in the price front, not to ment
ion product quality.
As per the earlier circular, the interest subvention was given upto March 31st 2
009 and based on this circular only; the exporters had worked out and given thei
r costing to buyers. At this point of time, the sudden removal of Interest subve
ntion at 4% given on Packing Credit Interest Rates would affect the cost of manu
facturing.
Considering the increase of diesel prices (which includes duties of Customs and
Excise also) which resultant into increase of power cost and transaction cost in
addition to hike in yarn costs, increase in processing charges and accessories
cost, at least the status quo in the drawback rate at 11% is required for the su
rvival of the knitwear exporting units.


The Tirupur Exporter s Association has requested the Finance Minister to kindly
take into account the various adverse factors gripping on knitwear garment expor
ting units and restore the duty drawback rate for cotton garments to 11% against
8.8%.
‘Price hike’
Uncontrollable hike in prices of power and yarn, in the recent months have compe
lled knitwear exporters in Tirupur to decide on a 15 percent hike in the prices
of the exportable goods. With regard to this the Tirupur Exporters Association (
TEA) has asked its member units to hold talks with overseas clients in order to
reach to a conclusive decision on prices.
The cost of power, yarn has gone up. The inflation is continuing to go up. Hence
they have asked their member units to ask for a price increase to the tune of 1
5 percent. Exporters will
44
be further relieved even if the revision was around 10 percent because rupee had
depreciated recently making the situation a little bearable.
It had been reported that Tirupur exporters lost around Rs14 billion worth of ex
port orders last year due to rupee appreciation. With the increase in cost of op
eration, export units had to go easy with their expansion plans.
They are also optimistic that, total exports from Tirupur, may reach around Rs11
5 billion in the current year, up from Rs100 billion of last year.
‘Power supply: Textile manufacturers over TNEB adjudication’
Textile manufacturers here by and large are expressing relief over the adjudicat
ion of TamilNadu Electricity Regulatory Commission in the matter of restriction
and control of power supply to High Tension (HT) and Low Tension (LT) consumers
and surcharge imposed by Tamil Nadu Electricity Board (TNEB) recently.
Official sources told The Hindu that the Commission in a sitting on October 24 h
ad pronounced an order nullifying TNEB’s directive to disconnect the service conne
ction of a consumer for violation of the restriction of consumption during peak
hours in the evening imposed as part of load shedding.
The regulatory body observed that the direction was a violation of Section 56 of
the Electricity Act 2003 (Central Act 36 of 2003), which authorizes the Board t
o disconnect power supply only in the event of default in payment of electricity
charges.
Sources said that the Commission also clarified that the fiat on levy of 50 per
cent additional charges on LT industrial and commercial consumers, who had excee
ded the ceiling of 80 per cent of their average bi-monthly consumption during th
e previous year subjected to a maximum ceiling of 2,000 units, should be impleme
nted only after obtaining public views.
Tirupur Exporters Association president A. Sakthivel termed the Regulatory Commi
ssion’s instructions as a “welcome move”. “Removal of ceiling on energy consumption for
LT
45
consumers is imperative for the growth of small and medium scale units functioni
ng in the Tirupur knitwear cluster considering the fiscal and monetary turmoil e
xperienced by the industry in the last few months following the sub-prime crisis
in the United States,” Mr. Sakthivel said.
Knit Cloth Manufacturers Association president Ahill Rathinasamy said: “It is inde
ed an injustice to levy additional charge from the textile units which were prom
ptly paying the dues at a time when the TNEB has been giving power either free o
r at concessional rates to some sections of society and multinational companies.”
‘Extensive use of firewood’
Extensive use of firewood in the garment cluster of Tirupur without any planned
afforestation programmes in place has been causing concern to environmentalists.
A pilot study on consumption of firewood in the garment cluster of Tirupur recen
tly carried out by Prakurthi, a Bangalore-based non-governmental organisation, s
tressed the need for finding ways to ensure that available supplies of firewood
were used to maximum efficiency in the textile manufacturing chain. This would a
void environmental and social problems arising out of uncontrolled deforestation
. The study revealed that the textile industry had been consuming an average of
5,250 tonnes of firewood every day. “The firewood is primarily used for steaming,
washing, compacting and printing processes in the sector,” P. Parthiban, programme
director (Tirupur region), Prakurthi, told The Hindu. Of the 1,100 boilers in T
irupur cluster including the standbys, 95 per cent use firewood as fuel to gener
ate steam.
‘US recession

hits apparel industry in Tamil Nadu’
Coimbatore s apparel industry is severely hit due to the ongoing recession in US
economy and is now receiving only few export orders.
Tirupur is a major source of foreign
exchange earnings for the country because o
f its exports. 56 per cent of India s total knitwear exports comes from Tirupur.
46
"Tirupur exports apparels worth 14,000 crores. Total knitwear export is 16,500 c
rores. But this year, we expect about five per cent minus growth rate because of
the recession in United States so we may do 10,500 crores, about five per cent
less," said Sakthivel, president, Tirupur Exporters Association.
Tirupur is famous for the export of all knitted garment wears such as t-shirts,
polo - shirts, sweat shirts, banyans, pajamas and night dresses on various fabri
cs like single jersey, interlock, fleece, polar fleece, pique jersey, pointelle
jersey, rib, pointelle rib and drop needle. The textile and clothing sector is t
he largest

employer after agriculture and accounts for nearly four per cent of I
ndia s gross domestic product.
The present economic crisis in the United States has affected the apparel indust
ry with the apparel exports going down by 15 per cent in Tirupur. In knitwear ex
ports, Tirupur has registered a fall of five per cent.
The Apparel Exports Promotion Council is taking various steps to meet the presen
t crisis.
"Well this crisis in US is affecting us a lot. We are definitely expecting a dro
p of 10-15 per cent in the immediate future. Stores are coming in. I have the re
ports. The buyers who are coming in are not buying in as large quantities as the
y were buying earlier. The orders are already down by 20-25 per cent in terms of
quantity," said Rakesh Vaid, Charirman, and Apparel Exports Promotion Council.
47
9. DISCUSSIONS

If Bangalore can be India s Silicon Valley, Tirupur can be
our Textile Valley,"
points out K Palaniraman, a garment

manufacturer in India s textiles hot-spot in
Tamil Nadu. Facts on Tirupur s garment industry:

Tirupur is one of the largest foreign exchange earning towns in India. Last year
, the export turnover from the town was more than Rs 5,000 crore (Rs 50 billion)
. There are some 7,000 garment units in the town that provides employment opport
unity to close to one million people.

The first spot of any international buyer for Indian garments is Tirupur. Buyers
from 35 countries frequently visit Tirupur. Tirupur can deliver customised samp
les in less than 12 hours; half a million pieces in a matter of days.

Fifty-six per cent of India s total knitwear exports come from Tirupur. The Expo
rt Import Policy of 2002-2007 makes laudable

tribute to Tirupur for its

contribu
tion to the export efforts and calls it a Town of Export Excellence.
According to, A Sakthivel, President, Tirupur Exporters Association, the first h
osiery factory with hand-operated machines was set up in Tirupur in 1935. "For m
ore than 30 years, garment manufacturers in the town were producing mainly grey
and bleached banians (vests)," he says. It was in the late 1960s that the indust
ry slowly diversified into manufacturing other inner garments, including

banians
and underwears, consumed largely by the domestic market. "But Tirupur s fortune
s took a dramatic turn in the late 1970s when we began exporting our items," say
s Sakthivel. He recalls it all began when some exporters in Mumbai introduced an
Italian, Antony Verona, to Tirupur. "Verona began importing woven garments from
Tirupur and he introduced more Italian businessmen into trade with Tirupur," he
says. Sakthivel says these days there is no competitor to Tirupur in the garmen
ts industry in India.
48
But there is a darker side to Tirupur. Amidst the prosperity that has befallen t
his textile town, many ills afflict it. These include potholed roads, acute shor
tage of water, environmental pollution and virtually non-existent sewage systems
. The discharge of salts in effluent from the dyeing factories in Tirupur has le
d to large-scale environmental degradation. Environmentalist P K Sundaran says t
he huge textiles manufacturing is concentrated in a small geographical area in T
irupur that it has exerted extreme pressure on natural resources. "The groundwat
er and soil fertility levels in Tirupur are very low. The textiles industry has
progressed here at the cost of the environment," Sundaran points out. The Save W
ater Forum Sundaram heads has conducted a study that says the level of Total Dis
solved Solids in the groundwater has gone up to 5,000 to 6,000 milligrams per li
ters. The water scarcity is so acute in the town that water for dyeing units is
fetched in tankers from as far as 20 kilometres by the garment units. But Sakthi
vel says the water problem is one serious issue that the industry needs to get s
olved quickly. A water supply project to make good quality water available for w
et processing has already has taken shape in public-private partnership. The New
Tirupur Area Development Corporation Ltd is implementing this project. Some of
them say although quota restrictions have been dismantled, domestic textile play
ers continue to

be caught in archaic Indian

government regulations. Consider thi
s: Under the Handloom Reservation Order, that the government has issued, produ
ction of 11 items including non-terry towels and varieties of bed sheets has bee
n reserved exclusively for the handloom sector. A regular garment maker cannot p
roduce and
sell these items, which they

say has huge export potential. There is
also the Hank Yarn Obligation Order from the government which stipulates that
40 per cent of the cotton yarn produced by every garment unit in the country has
to be in hank form for use by the handloom sector.
49
"But the real problem that the government does not understand is that there is n
o market for the hank yarn," says an exporter. According to textile industry est
imates, the unsold hank yarn stock currently stands at about 18 million kg. Alth
ough
Tirupur is a small city compared to Coimbatore, it is the centre of Tamil N
adu s cotton knitwear industry and successfully markets its products in India an
d overseas. It is one of the most fastest growing city in India in terms of Indu
stry.[7] It is called the Knits Capital of India as it caters to famous brands a
nd retailers from all over the world. Nearly every international knitwear brand
in the world has a strong production share from Tirupur. It has a wide range of
factories which

export all types of Knits fabrics and supply garments for Kids,
Ladies, Men s garments - both underwear and tops. The city is known for its hosi
ery exports and provides

employment for about 300,000 people.[citation needed] S
ome of the world s largest retailers including C&A, Walmart, Switcher, Diesel, A
RMY, Tommy Hilfiger, M&S, FILA, H&M, HTHP, Whale, Reebok, VALUE, PitStop, 100% i
mport many textiles items and clothing from Tirupur. There are many export House
s in Tirupur successful and fast growing like Eastman Exports , PGC Industries-P
rem Durai Exports (Prem Groups), Stallion Garments, Statesman Fashion, Regency G
arments, RBR , SCM , SP , Poppys, RF Garments ( Rite Fit garments),UNITED APPARR
EL. A large market for export reject pieces also exists centered in the khaderpe
t locality close to the railway station. Project Vikas, an initiative by Microso
ft and National Manufacturing Competitiveness Council (NMCC) in partnership with
the Tirupur Exporter’s Association (TEA), was rolled out recently. The initiative
, which has been ongoing for 18 months, aims to enable the units in the cluster
enhance their manufacturing competitiveness in the domestic and global market by
creating opportunities in market access, establishing knowledge networks and en
abling supply chain linkage in the cluster ecosystem.
50
This discussion is broadly based on qualitative findings of elements of regional
economies, based on interview questions. Here, we will consider on some points
which have been presented in research findings
The process of liberalization started by the Congress government in the year 199
1 has created wide opportunities for the development of small-scale industries.
The small enterprise has emerged as a focus area for forging and promoting trade
. These economic reform programs fostered the emergence of Indian industry as a
global competitor with increase in exports. To improve the competitive strength
of the small scale industries clusters will need to be implementing suitable pol
icy measures as a most important element of its development. The following polic
y measures can be discussed in this regard.
9.1.
Reverse effect of Globalization
Tirupur has been facing a acute problem in global market, its products are not v
ery competitive in compare to products from China either in terms of price or qu
ality. A number of small industries affected or closed or are facing closure bec
ause of the inflow of cheap and tax free items from China via Nepal. So, there s
hould be an appropriate bilateral agreement with Nepal to check it. The finished
goods should have higher import duties rather than the raw material. Also, inte
rnational market is packaged with big competitors. Globalization of the economy
left much impact on India in this cluster. Now-a-days majority of the units are
multiplying their production capacity and operation costs are mounting significa
ntly to compete in market. So, globalization is affecting negatively for this cl
uster.
9.2.
Tax issues
Sales tax and Excise duty is an important factor for SSIs because large no. of S
SIs clusters are involved in production of finished products and its marketing.
Exemption from excise duty and sales tax makes SSI products more competitive in
domestic market as well in global market. It has been seen that in respect of ce
rtain products, the duties of excise and other tax on intermediate goods are hig
her than on the finished goods. The structure can be improved to enhance the tax
relevance.
51
9.3.
Pollution problem
Tirupur textile cluster become larger than before in last few decades and its co
vered areas are still not well satisfactory in aspect of marinating clean and gr
een environment. The entire cluster use a lot of chemicals processes to finish i
ts final products. Use of chemicals in factory process also produce it’s waste pro
ducts that’s not well arranged to disposed off and it’s affecting the local quality
of water. Government should draw attention to act on this as it’s already suggeste
d by environment research centers of India and abroad.
9.4.
Technology factor
The age of globalization and booming information technology has made all industr
ies highly competitive. The technological change in the Tirupur cluster has been
quite slow. There are uncountable reasons responsible for this. The entrepreneu
rs have not made any efforts for modernization because of their domestic type of
setup and selling. Also, there is a lack of availability of appropriate informa
tion that induces latest technologies. One of the biggest factors responsible fo
r slow technology enhancement is inadequate flow of credit for investment in tec
hnological development. Testing facilities are also not easily available.
Technology Bureau for International Industrial Partnerships and Technology Burea
u for Small Enterprises, Delhi, has been providing useful services to the small
scale units from many clusters. But, the rate of progress in their performance h
as not been very impressive. They need sufficient backup, especially in promotio
n of their activities. In addition to change in their organizational systems, th
ere should be a focus on quality standard certification e.g. 1SO 9000, ISO 9001
and ISO 9002. Certification should be made compulsory to introduce quality-consc
iousness among entrepreneurs.
9.5.
Employment Law
As found in Tirupur cluster, lot of units are still going through phase of moder
nization although, employment law for employment is not for favorable to them. I
t’s quite old and need to revise,

it has been found that the existing social secur
ity measures such as Employees Provident Fund, Insurance Act, Maternity Benefit
s Act and Compensation Act are not easy for entrepreneurs of small scale units t
o adopt and implement. This affects the SSI units’ average competitiveness.
52
Also, employees can go in for strike or challenge for judicial process where dat
es of hearing are fixed months after filing the application due to slow judicial
process in India.
9.6.
Co-ordination among various Government Agencies
It has been reported in many papers and noticed at small clusters and also in em
inent cluster like Tirupur textile cluster about complexity about function of Go
vernment agencies, that deal with small scale industries in India, for example,
Ministry of SSI, SSIs’ Development Commissioner office, Small Industries Developme
nt Organization, Small Industries Service Institutes, National Small Industries
Corporation, Small Industries development Bank of India, Regional Testing Center
s, District Industries Centers, State Financial Corporations, State Industrial D
evelopment Corporations, State Small Industries Development Corporations etc. Bu
t, in all of them there a lot of cases are due to lack of clearance by them as m
any units do not fulfill their criteria.
9.7.
Pending Payment Issues
Pending or dues payment by large companies negatively affects the SSIs unit in c
luster. It continues to be a major problem for the Tirupur cluster. To check it,
there could be adequate safeguards in the tax realization pattern by marinating
credit and transactions transparency and by maintaining their records. For exam
ple, whenever a creditor company goes to file its tax returns, the recoverable a
mount should be charged from them and paid to the concerned SSI.
9.8.
Protection policy
Tirupur’s entrepreneur reports that India’s central government policy does not seem
to be very protective towards them except of EXIM policy. In USA, there are spec
ial laws for the small scale sector23. But in India, there is not any proper pro
gram for small scale clusters. Moreover, 50 items have been de-reserved which we
re exclusively reserved for the small scale sector. In order to protect small sc
ale sector from multinational companies a certain percents of items should be pu
rchased by Central and State Government agencies especially when the items are r
eserved for the SSI sector. The USA Government policy for protection to indigeno
us industries can be replicated for Indian SSIs.
53
9.9.
Single window policy
Due to not being up dated of certain policy and traditional system of working ma
ke slow the all business environment of nearby. Tirupur and other similar cluste
rs now become an eminent cluster and exporting products contributor and source o
f foreign currency earner. But, in Tirupur there isn’t any single window policy24
implemented yet as well as it seen in EPZ (now named as SEZ) in Indian region. T
here are complex business legal processes that make slow business activity in th
is area and distract the foreign investor as well. As for example: inappropriate
partnership act; in which there are four ways to set up a company in India: Par
tnership, Proprietorship, Limited Company and Private Limited Company. Here, it
is seen that the partnership issues are most problematic. So, it can be suggeste
d to there should be options of Limited Partnership as it has in United Kingdom.
54
10. CONCLUSION
Overall, the survey concluded huge gaps in the deployment of Information & Commu
nication Technology (ICT) in the areas of supply chain management, designing, me
rchandising and customer relations. The cluster appeared more conscious of spend
ing on ICT in monitoring the quality standards, as the exporters’ source supplies
from multi-level production centers & varied production sources, which requires
quality synchronization for standardized exports. Study found limited ICT "visio
n" for an integrated business and there was limited knowledge on latest technolo
gies such as data warehousing, e-commerce etc. While large firms in the cluster
are inline with the leading international manufacturing sectors in ICT usage, mo
st of MSMEs requires strong support. The most common handicap mentioned in ICT i
mplementation was delay in installing the systems due to limited availability of
the local software vendors which are mostly based at Coimbatore, Chennai or Ban
galore. It appears that there are huge gaps in the deployment of ICT technology
in the areas of supply chain management, designing, merchandising and customer r
elations. Huge amount of money is being spent only for monitoring the quality st
andards. Since most of the exporters have multilevel production centers and vari
ed production sources, such quality monitoring and control can only be expected.
In a nutshell Tirupur exporters do not require be educated about the benefits o
f ICT. They are trying addressing the issues internally with available sources w
ith them and the small service providers. So far no concrete platform to address
the issues relating to the industry and are affordable to the SMEs, have not be
en developed. Demonstration of the system, which is affordable and applicable, h
as to be made. Human resources in the industry are to be trained. Application an
d its benefits are to be demonstrated through model units and by extending handh
olding during the initial period of demonstration and application.
55
QUESTIONNAIRE
INTERVAL QUESTIONS:
Age o o o o 21 – 30 31 – 40 41 – 50 51 and above
NOMINAL QUESTIONS:
Company Established Year Educational Qualification of Person-in-charge : :
What do feel about the standard and cost of living in the cluster?
Marketing Details:
What are the modes of communication used with the customers? o o o Websites / e-
mail Telephone Only through Buying Offices
How do you identify and reach the target market? o o o o Through buying office D
irect contact with clients/customers As an allied work Others (Please specify) _
________________
Where did you get the Supply of raw materials? o o o Only from Tamil Nadu From o
ther states Imported from foreign countries
How do you perceive the other companies in the cluster as? o Competitive 56
o o o
Supportive Dependant (Income Sources) Others (Please specify) _________________
Mode of transport that you use for o o Local Supply Export : _________________ :
_________________
Financial Details:
Your Initial Investment Current Worth of your firm Your Sales Volume (No. of pie
ces/kgs) in Can you give us the turnover for the past 5 years? : : : :
Is there a dependency on other cluster (Tirupur) companies? o o For Core Operati
on For Allied Operation
What do you feel about the progress of your company? o o o o Booming Steady grow
th Declining Stagnant
Operational Details:
Total number of employees in your company - Initially Currently : :
No. of employee levels (Hierarchy/Different posts) in company :
What type of people you recruit (Recruitment preference)? o o o o Skilled Labor
Young /Unskilled Labor Contract Labor Graduates 57
:
How will you decide on the salary structure in your company? o o o o Skill Exper
ience Work/Output Others (Please specify) _________________
:
What are the measures that you undertake for Employee benefits and care? o o o o
ESI/PF Mediclaim/Insurance Food/Accommodation Others (Please specify) _________
________
What are the opportunities for Employee Growth (Individual Development)? o o o o
Promotions Internal Training Social Awareness/Development Programs Others (Plea
se specify) _________________
Recent Scenario:
What effects do you have with increase in $ price (From $38 to $48)? o o o o Hig
her profits Lower Export orders Stagnant Goods Other Effects
What are the effects of the current financial recession? o o o o Profit (Please
specify on scale of 1-5) Loss (Please specify on scale of 1-5) Break-Even Other
effects (Please Specify) : _________________
What are the effects of the recent power failures?
Counter Measures that you applied against during recession period? o o o o Layof
f Downsizing Salary reduction Other measures 58
Are there any pollution caused to the environment by your company? o If Yes (Ple
ase Specify the countermeasures applied) i. _________________ ii. ______________
___
What are the aids that you get from the Govt? o o o Aids being received so far A
ids expected during recession Aids provided during recession : : :
What are the actions that you have taken for the betterment of society (CSR)?
59
BIBLIOGRAPHY/REFERENCES
1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 2
3. 24. 25. 26. 27.
http://www.tea-india.org/ http://www.tirupur.com/ http://www.tirupur.mobi/ http:
//www.tirupurchamber.com/ http://www.theknitwear.com/ http://www.apparelworld.or
g/ http://www.tirupurjobs.net/ http://www.teonline.com/ www.thehindubusinessline
.com/bline/2005/01/11/stories/2005011101711700.htm http://www.tn.gov.in/spc/annu
alplan/ http://www.eda.gov/Research/ClusterBased.xml http://www.isc.hbs.edu/econ
-clusters.htm http://www.worldbank.org/urban/led/cluster2.html http://europa.eu.
int/comm/enterprise/entrepreneurship/support_measures/cluster/ http://www.hindu.
com/2008/10/06/stories/2008100654990600.htm http://www.fibre2fashion.com/news/ap
parel-news/newsdetails.aspx?news_id=64437 http://www.hindu.com/2008/10/16/storie
s/2008101652830500.htm http://economictimes.indiatimes.com/News/News_By_Industry
/Cons_Products/US_recessi on_hits_apparel_industry_in_Tamil_Nadu/articleshow/361
1536.cms http://news.chennaionline.com/newsitem.aspx?NEWSID=d0268539-fb04-4778-a
ec1549f78569056&CATEGORYNAME=CHN http://www.hindu.com/2008/10/26/stories/2008102
659600700.htm http://www.hindu.com/2008/11/04/stories/2008110452870100.htm http:
//www.thehindubusinessline.com/2008/11/05/stories/2008110550842100.htm http://ww
w.hindu.com/2008/11/06/stories/2008110658740500.htm http://www.hindu.com/2008/11
/14/stories/2008111460780300.htm http://www.hindu.com/2008/11/15/stories/2008111
556281500.htm http://www.hindu.com/2008/11/17/stories/2008111757200300.htm http:
//ssi.nic.in/ssischeme.htm
60
APPENDIX
Abrasion Resistance - The degree by which a fabric is able to withstand loss of
appearance through surface wear, rubbing, chafing, and other frictional actions.
Absorbency - The ability of a fabric to take in moisture. Absorbency is a very
important property, which affects many other characteristics such as skin comfor
t, static build-up, shrinkage, stain removal, water repellency, and wrinkle reco
very. Air Permeability - The porosity of a fabric as estimated by the ease with
which air passes through it. Air permeability measures the warmth of blankets, t
he air resistance of parachute cloth, the wind resistance of sailcloth, etc. as
measured on standard testing equipment. Anti-Bacterial (Anti-Microbial) - A fabr
ic that has been chemically treated or a fiber that is created by incorporating
the anti-bacterial chemical agent into the fiber formula, making the finished fi
ber or fabric resistant to, or inhibiting the growth of micro-organisms. Bleachi
ng - A process of whitening fibers, yarns, or fabrics by removing the natural an
d artificial impurities to obtain clear whites for finished fabric, or in prepar
ation for dyeing and finishing. The materials may be treated with chemicals or e
xposed to sun, air, and moisture. Blend - A term applied to a yarn or a fabric t
hat is made up of more than one fiber. In blended yarns, two or more different t
ypes of staple fibers are twisted or spun together to form the yarn. An example
of a typical blended yarn or fabric is polyester/cotton. Bonding - The technique
of permanently joining together two fabrics or layers of fabrics together by a
bonding agent into one package. The bonding of fibers in a single layer of mater
ial is called a web. Special adhesives, binders, or thin slices of foam may be u
sed as the marrying agent. Buttons - Specified by design, size, color, and type-
--such as brass, melamine, or pearl,

buttons are either shanked (attached by pas
sing threads through

the shank s eye) or holed (attached by passing threads thro
ugh the button s holes). Calendering - A process for finishing fabrics in which
such special effects as high luster, glazing, embossing, and moiré are produced.
61
Cleaning - Hand operation in which the basting threads are removed from the garm
ent; usually done prior to the final pressing. Collar - Two or more thicknesses
of fabric attached to the neckhole opening to provide a firm and neat-appearing
finish. Comfort Stretch - The term given to the freedom of movement experienced
in the wearing of a garment that contains spandex, or has stretch engineered int
o a yarn through mechanical stretch construction. Cotton - A unicellular, natura
l fiber that grows in the seed pod of the cotton plant. Fibers are typically 1/2
inch to 2 inches long. The longest staple fibers, longer than 1 1/2 inch, inclu
ding the Pima and Egyptian varieties, produce the highest quality cotton fabrics
. Crease Resistant Finish - Also referred to as CRF. Finishes used on fabrics th
at make them resistant to wrinkling and creasing, such as synthetic resin type f
inishes like durable press. Today some fabrics are made highly resistant to wrin
kling through fiber blending and construction. Crease Retention - The ability of
a cloth to hold or pleat or a crease, which has been intentionally created, thr
ough the use of a heat treatment. Heat setting of thermoplastic fibers causes cr
eases to be permanently set. Curing - A baking process with the use of resin fin
ishes, applying heat under carefully controlled conditions to a fabric or the ga
rment, which cause a reaction in the finishing agents and make them work. Crease
-retention, water repellency, wrinkle resistance, and durable press are examples
of finishes that are cured. Denim - True denim is twill weave cotton-like fabri
c made with different colored yarns in the warp and the weft. Due to the twill c
onstruction, one color predominates on the fabric surface. Double Knit - A fabri
c knitted on a circular knitting machine using interlocking loops and a double s
titch on a double needle frame to form a fabric with double thickness. It is the
same on both sides.
62
Double Weave - A woven fabric construction made by interlacing two or more sets
of warp yarns with two or more sets of filling yarns. The most common double wea
ve fabrics are made using a total of either four or five sets of yarns. Durabili
ty - The ability of a fabric to resist wear through continual use. Dye (Piece) -
Dyeing of the fabric into solid colors after weaving or knitting. Elasticity -
The ability of a fiber or fabric to return to its original length, shape, or siz
e immediately after the removal of stress. Embroidery - An embellishment of a fa
bric or garment in which colored threads are sewn on to the fabric to create a d
esign. Embroidery may be done either by hand or machine. Encapsulation - A proce
ss in which the fibers of a fabric are coated with a filmy substance to create c
ertain high performance qualities, such as breathability.

Ergonomics - The study
of improving a garment design by enhancing the wearers comfort, performance, o
r health. Finished Fabric - A fabric that has gone through all the necessary fin
ishing processes, and is ready to be used in the manufacturing of garments. Thes
e processes include bleaching, dyeing, printing, heat setting, etc. Interlining
- An insulation, padding, or stiffening fabric, either sewn to the wrong side of
the lining or the inner side of the outer shell fabric. The interlining is used
primarily to provide warmth in coats, jackets, and outerwear. Knit Fabric - Fab
rics made from only one set of yarns, all running in the same direction. Some kn
its have their yarns running along the length of the fabric, while others have t
heir yarns running across the width of the fabric. Knit fabrics are held togethe
r by looping the yarns around each other. Knitting creates ridges in the resulti
ng fabric. Wales are the ridges that run lengthwise in the fabric; courses run c
rosswise. Lining - A fabric that is used to cover the inside of a garment to pro
vide a finished look. Generally, the lining is made of a smooth lustrous fabric.
63
Micro-encapsulation - A method of enclosing polymer additive materials in micros
copic capsules, which can then be released under certain conditions to enhance p
erformance properties. Pill - A tangled ball of fibers that appears on the surfa
ce of a fabric, as a result of wear or continued friction or rubbing on the surf
ace of the fabric. Sizing - The application of a size mixture to warp yarn. The
purpose of this is to make the yarn smoother and stronger to withstand the strai
n of weaving, to provide an acceptable hand in the woven gray goods, and to incr
ease fabric weight. Spinning - This final operation in the production of natural
yarn consists of the drawing, twisting, and the winding of the newly spun yarn
onto a device such as a bobbin, spindle, cop, tube, cheese, etc. Texturizing - A
process performed on specialized machinery which create bulk, stretch to the ya
rn, and therefore creates new aesthetics to the finished fabric. Wash-and-Wear -
Ability of a garment to be washed by hand or in a washing machine and require l
ittle or no ironing. Also referred to as "Easy Care." Weaving - The process of f
orming a fabric on a loom by interlacing the warp (lengthwise yarns) and the fil
ling (crosswise yarns) perpendicular to each other. Yarn - A continuous strand o
f textile fibers created when a cluster of individual fibers are twisted togethe
r. These long yarns are used to create fabrics, either by knitting or weaving. Z
ipper - The physical parts of the zipper are: scoop teeth, chain, lock, pull tap
e, and slider. Zippers used in industrial clothing are metal or brass. Plastic z
ippers are used typical apparel garments. Zippers are used as a closure in pants
, skirts, and dresses.
64