The Textile and Apparel Industry.....

By , GAURAV GOYAL

The Indian Textile and Apparel Industry

The Indian Textile and Apparel Industry is one of the largest and oldest sectors in the country and among the most important in the economy in terms of output, investment and employment. The sector employs nearly 35 million people and after agriculture, is the second-highest employer in the country. Its importance is underlined by the fact that it accounts for around 4% of Gross Domestic Product, 14% of industrial production, 9% of excise collections, 18% of employment in the industrial sector, and 16% of the countrys total exports earnings. With direct linkages to the rural economy and the agriculture sector, it has been estimated that one of every six households in the country depends on this sector, either directly or indirectly, for its livelihood.

The Indian textile industry is valued at US$ 36 bn with exports totalling US$ 17 bn in 2009-2010. At the global level, Indias textile exports account for just 4.72% of global textile and clothing exports. The export basket includes a wide range of items including cotton yarn and fabrics, man-made yarn and fabrics, wool and silk fabrics, made-ups and a variety of garments. Indias presence in the international market is significant in the areas of fabrics and yarn.

1.....India is the largest exporter of yarn in the international market and has a share of 25% in world cotton yarn exports. 2.....India accounts for 12% of the worlds production of textile fibres and yarn. 3.....In terms of spindle age, the Indian textile industry is ranked second, after China, and accounts for 23% of the worlds spindle capacity. 4.....The country has the highest loom capacity, including handlooms, with a share of 61% in world loom age.

Leading Manufacturers and Exporters......

Arvind Mills Ltd.....Arvind Mills Limited is the flagship company of the US$550 million Lalbhai Group. It is engaged in the production of the widest range of textiles. It is the worlds largest exporter of denim and Asias largest denim producer. The company is also in the garment and men's shirting business under the brand names of Newport, Flying Machines, Lee, Arrow.

Raymond Ltd....Incorporated in 1925, the Raymond Group is a US$ 300 million plus conglomerate having businesses in textiles, readymade garments, engineering files & tools, prophylactics and toiletries. The group is the leader in textiles, apparel, files and tools in India. Raymond Textile produces pure wool, wool blended and polyester viscose fabrics and blankets along with furnishing fabrics. The denim division produces high quality ring denims.

Alok Industries....Established in 1986 as a private limited company, Alok Textiles began as fabric traders and suppliers to the garment industry. Beginning with texturising of yarn, the company steadily expanded into weaving, knitting, processing, home textiles and readymade garments. In less than two decades, it has grown to become a diversified manufacturer of world-class apparel fabrics selling directly to garment manufacturers and exporters. Madura Garments.... is Aditya Birla groups most diversified conglomerate. Earlier it was known as Indian Rayon Ltd. (IRIL), it was rechristened as Aditya Birla Nuvo in 2005. It is also the largest branded apparel company in India. Its focus areas are viscose filament yarn, carbon black, branded apparels, textiles and insulators. They own brands like Louis Phillipe, VanHeusen, Allen Solly, Peter England, Trouser town.

Century Textiles ....Century Textiles & Industries was incorporated in 1897. Till 1951, it had only one industrial unitCotton Textile Mills. It has Asias largest composite 100 per cent cotton textile mill. At present, Century is not only the trend setter in cotton textiles, but also a presence in yarn, denim, viscose filament rayon yarn, tyre cords, caustic soda, sulphuric acid, salt, cement and pulp & paper.

Welspun India ....Beginning with a small texturising unit in 1985, the group has significantly expanded and diversified its business. It now has interests in terry towels, LSAW pipes, pipe coating, cotton yarns, bathrobes and buttons. The group has ties with 12 out of top 20 retailers in the world namely Wal-Mart, K-Mart, JC Penny and Target to name a few.

Himatsingka Seide Ltd....The company commenced its operations on 15 February 1985. It manufactures natural silk fabrics under a 100 per cent export oriented unit scheme. It produces a wide range of regular and fancy 100 per cent silk and silk blended yarns. Its weaving division - Himatsingka Seide, offers yarn dyed decorative, bridal and fashion fabrics. The entire operation of winding, doubling, twisting, dyeing, weaving and finishing is integrated under one roof. Bombay Dyeing....Bombay Dyeing is one of Indias largest producers of textiles. The company is one of the largest and oldest textile companies in the country. It manufactures cotton and blended textiles. Product mix comprises suiting's, shirting's, sarees, towels and bed linen. The company was formed on 23 August 1879 by Nowrosjee Wadia, a dye works near Mahim. This was the mill, which first started dyeing of yarn in India. Bombay Dyeing Mfg. Co. Ltd. was set up in 1895.

Leading Retailers....
Pantaloon Retail....It is headquartered in Mumbai with 450 stores across the country employing more than 18,000 people. It can boast of launching the first hypermarket Big Bazaar in India in 2001. It is not only the largest retailer in India with a turnover of over Rs. 20 billion but is present across most retail segments.

Shoppers Stop....They forayed into retail with K Raheja Group, Indias first departmental store in 2001. It is the only retailer from India to become a member of the prestigious Intercontinental Group of Departmental Stores (IGDS). Shoppers Stop has 7, 52, 00 sq ft of retail space with a turnover of Rs 6.75 billion.

Westside....Established in 1998, Trent - one of the subsidiaries of Tata Group operates Westside, a lifestyle retail chain and Star India Bazaar - a hypermarket with a large assortment of products at the lowest prices. Westside registered a turnover of Rs 3.58 mn in 2006.

Lifestyle....were launched in 1998 in India. Landmark group is spread across six cities, covering 4.6 lakh sq. ft. with a turnover of Rs 3.5 billion in 2005. A new division named Lifestyle International has emerged for their international brands business comprising Bossino, Kappa and Springfield in their portfolio.

A Birla Group....They have a strong presence in apparel retailing through Madura garments which is subsidiary of Aditya Birla Nuvo Ltd. They own brands like Louis Phillipe, Van Heusen, Allen Solly, Peter England, Trouser town.

Scope....
The rising market opportunity for Developing Countries will lead to the decline of Most Developed countries in their Textile and Apparel Industry and create fresh opportunity of up to US$ 140 Billion for exports for developing countries but China will remain the biggest exporter but with rising costs and rising domestic demand, it may cede some export opportunity wherein Chinas Exports May Be Constrained In FutureCreating Opportunities For Others ..Hence Opportunity For India To Reach US$ 80 Billion Exports By 2020....Further, Going Forward.Indian Economy Has A Very Positive Outlook In the last 10 years India has added $ 930 billion to its economy and will add almost double of that (about $ 1700 Billion) in the next 10 years.The Indian economy in 2020 is poised to become bigger than the current size of countries like France, or Italy.

The Global Textile and Apparel Industry.....

The global fashion apparel industry is one of the most important sectors of the economy in terms of investment, revenue, trade and employment generation all over the world. Apparel industry has short product life cycles, tremendous product variety, volatile and unpredictable demand, long and inflexible supply processes. The industry has been in a transition over the last 20 years. Some of the its major contributors are: 1....Significant consolidation in retail, 2....Increasing use of electronic commerce in retail, and 3....Wholesale trade The global textile and clothing industry is estimated to be worth about US$ 4,395 bn and currently global trade in textiles and clothing stands at around US$ 360 bn. The US market is the largest, estimated to be growing at 5% per year, and in combination with the EU nations, accounts for 64% of clothing consumption.

Leading Manufacturers and Exporters....

In 2010, the largest apparel manufacturers and exporters were countries from the Asia-Pacific region which included countries like China, Hong Kong, Phillipines, Malaysia, Indonesia, Bangladesh, Srilanka, Pakistan, Thailand and India. The other major apparel manufacturing nations were USA, Italy, Germany and Mexico. China had captured 65% of the global market share towards the end of 2009 in total apparel exports.

Despite these developments the apparel industry is estimated to grow at very high pace and will provide employment to a large number of people all across the world.

Major Manufacturers and Exporters.

Leading Retailers....
Tesco ..... is a global grocery and general merchandise retailer headquartered in United Kingdom. It is the third-largest retailer in the world measured by revenues the second-largest measured by profits .It has stores in 14 countries across Asia, Europe and North America and is the grocery market leader in the UK .

Wal-Mart....Wal-Mart is the undisputed retail leader in North America and tops the global list of retailers, but the company's international operations in 15 countries outside the United States generate just under 25 percent of annual sales.

Carrefour ....is a French international hypermarket chain. Carrefour is one of the largest hypermarket chains in the world (1395 hypermarkets at the end of 2009, the second largest retail group in the world in terms of revenue and third largest in profit after Wal-Mart and Tesco.

The Gap, Inc.... is an American clothing and accessories retailer based in San Francisco, California, and founded in 1969 by Donald G. Fisher and Doris F. Fisher. The company has five primary brands: the namesake Gap banner, Banana Republic, Old Navy, Piper lime and Athleta. Gap, Inc. remains the largest speciality apparel retailer in the U.S.

Reebok International Limited...., is a subsidiary of the German sportswear company Adidas, is a producer of Athletic shoes, apparel, and accessories. The name comes from the Afrikaans spelling of rhebok. Reebok sponsored kits for Indian Premier League teams.

Uniqlo.... is Japan's most popular apparel retailer and a worldwide leader in casual wear. The brand's mission is to empower all individuals through the clothing they choose to wear. Rather than become characterized by a brand, encourages its customers to integrate its pieces into their own unique style.

Scope....
The global textile and apparel manufacturing industry is expected to grow more than ever in times to come. According to an estimate, the global apparel industry will reach a value of US $ 1,981.7 billion by the end of 2011. The apparel manufacturers are now adopting new techniques to increase their trade. New business models and competitive strategies are used to enhance profits and growth. The consumer is more aware and more demanding with the development of media like television and Internet. They have more choices in quality, price and design. This is the reason why apparel chains all over the world are focussing more on improving the quality of the product and offering in varied range of fashion designs. Apparel manufacturers are developing methods to keep up with the pace of change like offering on wholesale prices to survive in the global competition.

SWOT Analysis.....
Strength 1....India has rich resources of raw materials of textile industry. It is one of the largest producers of cotton in the world and is also rich in resources of fibres like polyester, silk, viscose etc. 2....India is rich in highly trained manpower. The country has a huge advantage due to lower wage rates. Because of low labor rates the manufacturing cost in textile automatically comes down to very reasonable rates. 3....India is highly competitive in spinning sector and has presence in almost all processes of the value chain. 4....Indian garment industry is very diverse in size, manufacturing facility, type of apparel produced, quantity and quality of output, cost, and requirement for fabric etc. It comprises suppliers of ready-made garments for both, domestic or exports markets.

Weakness 1....Knitted garments manufacturing has remained as an extremely fragmented industry. Global players would prefer to source their entire requirement from two or three vendors and the Indian garment units find it difficult to meet the capacity requirements. 2....Labour force giving low productivity as compared to other competing countries. 3....Low bargaining power in a customer-ruled market.

Opportunity
1....Low per-capita domestic consumption of textile indicating significant potential growth. 2....Domestic market extremely sensitive to fashion fads and this has resulted in the development of a responsive garment industry. 3....Companies need to concentrate on new product developments. 4....Increased use of CAD to develop designing capabilities and for developing greater options.

Threats

1....Competition in post-2005 is not just in exports, but is also likely within the country due to cheaper imports of goods of higher quality at lower costs. 2.... China which remains as the biggest exporter capturing 65% of the global market share .

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