ADVANCED INDUSTRIAL MARKETING

FINAL PROJECT
Marketing Plan Cotton Ginning

Presented to:
Prof. Basharatullah Malik

Presented By:
Ahmed Haral 1199
Sarmad Nauman 1146
Hamza Iftikhar 1145
Sohaib Saeed 1181
Abbas hussain
Cotton Ginning

Introduction:

Our Mission
Our purpose is to serve the textile operations in Pakistan, by providing the excellent
services and high commitment level.
We are a ginning organization operating integrated ginning facilities in textile industry
and our end products are sold to national textile units.

Our Vision
We are committed to becoming the premier ginning organization in the textile industry
maintaining market leadership in the present business and diversifying into value added
projects with the object of maximizing returns.

Company Profile
The Company is operating its business since 2008, We are ginners selling fine cotton to
textile units of Pakistan, we buy cotton from Bupari the agents and after the processing
sell them in shape of bales to spinning mills the purpose is to serve the textile industry
and generate revenues. Our ginning plant is in District Multan, we usually buy cotton
from Rahim yar khan and sindh. we have choosen multan becuase it is the middle of
Rahimyarkhan/sindh and Faisalabad/Lahore. we only process specific type of cotton.
The business is seasonal based. We usually need around Rs.30 Million as running
finance for one season, this cash in hand is necessary for buying raw cotton. The cash
is arranged from previous profits and sometime we buy on credit basis.
Cotton, produces a natural vegetable fiber that is used in the manufacture of cloth.
Cotton produces sweet nectar which attracts a variety of destructive insect pests,
including the boll, bollworm, armyworm,
and the red spiders. In addition to insect pests, there is also a very destructive fungus,
that is called the wilt which attacks the root system
of the cotton plant. Inside the boll, which is shaped like a tiny football, moist fibers grow
and push out from the very newly formed seeds beginning when the blossom opens. As
the boll ripens, it turns brown and the fibers continue to expand. Finally, they split the
boll apart and the fluffy cotton bursts forth.

Cotton Ginning is the process of separating the raw fibers from the seed bolls and dust
particles
so the cotton could be easily processed into yarn. This is done by machines now a
days. These machines after
processing the fibers made them in shape of bales at the final stage, a bale press
compresses the ginned lint
into bales that are normally weigh between 450 and 500 pounds. The bales are then
wrapped with a protective cover,
ready for delivery to the warehouse there they are sold to various textile mills.

History of Cotton ginning, The cotton gin, invented in 1793 by Eli Whitney, it was
designed to separate
raw cotton fibers from seed bolls and other foreign materials prior to baling and
marketing.
The design was so efficient that it remains virtually unchanged till today.

Cotton in Pakistan, Cotton is among the major world fiber crop. It is grown under a
very broad range of climates, soils
and diffrent cultural practices. Prior to the introduction of man-made artificial fibers, it
was only
the raw material from which human clothing and other necessary textiles were
manufactured. Cotton is the main cash crop and Pakistan is the fourth largest cotton
producer in the entire world. The largest cotton producer country is China followed by
USA,
India and Pakistan.

Economy, Pakistan is the fourth largest producer of cotton in the world, the third
largest exporter of raw cotton, the fourth largest consumer of cotton, and
the largest exporter of cotton yarn. 1.3 million Farmers (out of a total of 5
million) cultivate cotton over 3 million hectares, covering 15 per cent of
the cultivable area in the country. Cotton and cotton products contribute
about 10 per cent to GDP and 55 per cent to the foreign exchange
earnings of the country. Taken as a whole, between 30 and 40 per cent of
the cotton ends up as domestic consumption of final products. The
remaining is exported as raw cotton, yarn, cloth, and garments.

The Crop, Pakistan's consumption of cotton for the year 2003-04 was 9.6 million bales
(of 480 lbs),
whereas the production was 8.2 million bales (of 480 lbs), this indicates that we are still
getting low yield. The average yield of our country is about 562 kg per hectare, whereas
our local varieties have a potential to produce about 910 kg per hectare. So to achieve
this target potential yield, the cotton growers should have to come up with modern
agricultural practices, especially crop protection and secure storage techniques for
maintaining the quantity and quality of yield as well. No doubt the grower's aims to
ensure the maximum yield with minimal adverse impacts, but there are several factors
which cause their economically unacceptable damage. Unfortunately in our farming
systems, uncontrolled insect pests, diseases and weeds reduce yields at harvest by 30-
50 per cent and around 20-25 per cent during storage.
.

Technology, The Saw Gin machines that are being used in the
Ginning factories in Pakistan are locally made and it is the copy of American brands like
Lummus,
Centinial and Continental technology that was used in 1950-60 in United State of
America (U.S.A). The productivity rate of local made single machine is 2 bales/ hour
while the new American branded continental Eagle machine is producing 7-9 bales/
hour. So we are far behind from the developed countries.

The Process, Most ginning factories purchased seed cotton from Bupari the agent and
wholesale market
Arthi. On avg, the ginners purchased 70% of their required seed cotton which in local
language is called Phutti through middle men i.e. through Buparis and arthi (commission
agent) where as 25% is being purchased directly through farmers and only 5% was their
own
supply. The ginning factory owners pay to the Bupari or Arthi after the rate for Phutti
agreed upon. The ginning factories also process the seed cotton the Phutti for big
farmers on contract bases.
Seed cotton Phutti is mostly transported to ginning factories through jute bags or on
tractor trolleys fitted with frames wrapped in polypropylene bags sown together with jute
yarn to form a big cotton holder. In this specific way more volume can be carried to the
factory from the farmer or wholesale market. The frame of polypropylene and the jute
thread are among the major source of contamination problems in the process of
spinning and weaving.
The phutti is not stored under cover shed or in proper storage facilities in our ginning
factories. It is left open in the wholesale market yard and ginning factories. In this way
dust, toffee wrapper, polyvinyl bag pieces and trash gathers into it. Also overnight dew
and rain increase the moisture content level and causes the deterioration of the color
quality of cotton fiber.
This deterioration of color quality of cotton affects the dying and finishing characteristics.

Our Market, Our market is Textile industry of Pakistan, the Spinning mills. the major
areas we are targeting are Faisalabad, Lahore, Multan and Karachi. We will provide fine
cotton to them in shape of bales. although our market is very diversified and dense we
have to supply our product in diffrent territories of Pakistan. this will cost us huge
transportation charges.
 SUPPLY AND DISTRIBUTION OF COTTON
000 Bales of 375 lbs or 170 kgs
Carry Mills & End
Fire
Years over

1999-
Stock
Production Imports Total Non-Mill
Consumption
Loss
Export Season Total
Stock SWOT
1,565 11,240 421 13,226 9,943 586 0 2,697 13,226
00
2000-
2,595 10,732 670 13,997 8943 709 0 2,907 13,459
01
2001-
1,934 10,612 1,080 13,626 11,358 268 0 2,000 13,626
02
2002-
2,694 10,211 1,103 14,008 11,952 296 0 1,760 14,008
03
2003-
1,760 10,048 2,312 14,120 11,905 218 0 1997 14,120
04
2004-
1,997 14,265 2,249 18,511 12,986 704 - 4120 18,511
05
2005-
4,120 13,019 1,728 18,867 14,896 352 - 3619 18,867
06

Source PCCC
Mill & Non Mill Consumption and End Season Stock figures are
Provisional

analysis
Strengths
Raw material locally available. We have set our plant at the nearest point from where our
suppliers can easily access us.

Infrastructure available We have considerably new and advance equipment than our
competitors. We are one of among those ginners who are using advance ginning equipment.
Excess install capacity We have excess install capacity on which we can install more
machinery which would increase our production capacity.

testing laboratory for staple and fiber testing We have a such a advance laboratory which
is well equipped with latest machines on which we conduct quality measure test on
cotton so we can produce best quality cotton bales .
skilled labor We have well trained and experienced labor who helps us in making
high quality cotton bales .

Weaknesses
Four times less productivity by use of local made old technology
We have local machinery which produces four times less productivity than machines which are
being used internationally which has increased our cost of production than foreign ginners and
this factor is making us weak to compete at international level.

No technical training institute for Ginning Industry

There is no technical training institute for ginning industry which could train work force so they
can work more efficiently.
High rate of contamination
our farmer is unable to decrease contamination in their crop. Farmers dont have resources to
use advance equipments which could decrease contamination in the crop.
Lack of online market facility to access international buyers
We dont have online market technology on which we can market our product internationally.
No warehouses and cotton lint storage facilities

Opportunities
Introduction of latest modern ginning technology being used in developed
Countries
This is a great opportunity for us through which we can increase our production capacity and
decrease down our cost of production. Through latest technology we can also produce export
quality product which could help us to compete internationally.

Export of cotton to other countries

We are currently operating locally. Export of cotton to other countries is a great opportunity for
us.
Possibilities to achieve best quality award which government gives on the basis of
performance
We could win best quality award which government gives on the bases of performance by giving
best quality product which will increase our good will.

announced on the basis of grade

Access to international markets through online market
We can access international markets by going online which would help us in generation more
revenues.

Threats
Shifting trend from cotton fiber to polyester fiber
Increase in trend of polyester fiber is decreasing down scope of cotton fiber which is not a good
sign for us.
Government regulations i.e. lot of taxes on the industry
Taxes imposed by government is also a big threat for us which could reduce our profits.
Fluctuation in international market price
Very high rate of fluctuation in international market price is making this business somewhat
risky.
Global Competition
Technology we are using dont match up with the technology is being used at international level
so we are unable to compete internationally.
Pest diseases on cotton crop result in low production of cotton lint we are facing different pset
attacks on cotton crop so the phutti became damage and results in low productivity.
Import of cotton imported cotton is real threat we have seen last year that people exported
cotton from india and other countries this is a great threat for local ginners.
Differential advantage analysis
A successfull marketing strategy is always having a good diffrentiation sceanrio among
core product. Every firm strives hard to bring differentiation in the characteristics of their
products and services from other firms . Any factor in the marketing mix could create
differentiation in the product or services of the firm .

We are focusing on the following things very keenily for selling our product with a
competitive edge.

- Pure White ginned cotton

We buy White cotton from the farmers so we could produce very fine and pure cotton to
spinning mills. Pure white cotton is highly demanded by spinning mills because its
reduce their cost of spinning. The white cotton is used for making good yarn counts.
Pakistan is known for its good quality white cotton in other countries it is observed that
the normally color of cotton is yellowish white or piled . In Pakistan we are having very
few areas from where we can get pure white cotton we only buy cotton from these areas
and we have very good relations with the suppliers of cotton from that area . We are
among the few ginners who have color quality scale in their laboratory.

- Purity (the absence of foreign matter)

For fine yarn counts a spinning mill required pure cotton with absence of foreign
materials like dust, Jute particles and other impurities. We are among the few ginners of
Pakistan who are providing purified cotton. we got real good machinery and
infrastructure with having an excellent lab for sample testing .We run several tests
before sending out the bales after the ginning process. contamination is a very serious
issue which spinners are facing more contaminated cotton produce low quality yarn so
we are very much interested in to produce cotton which has minimum impurities through
which spinners could produce high quality yarn,

- Quality of the ginning process.

After the harvest, a producer wants the optimum yield possible and the spinner wants the
highest quality fiber available. The ginner is asked to make both happen. Intelligent ginning
through better technology means quality business for everyone involved.
Quality ginning involves:
Maximized turnout with more fiber per bale
Preserved fiber quality
Optimized turnout versus grade based on growers price schedules
Reduced ginning costs through process and warehouse efficiencies

- The length of fibers.

We buy cotton which is having good staple length and strength so that give us best
quality yarn.
STAPLE-WISE PRODUCTION OF COTTON
Fig. In '000' Bales

5 YEAR
160 3,183 8,939 1,961 14,242
AVERAGE

1997-98 113 1,288 6,608 1,175 9,184

1998-99 102 3,267 5,187 234 8,790

1999-00 - 3,704 7,081 455 11,240

2000-01 - 1,331 8,950 451 10,732

2001-02 53 3,020 7,201 338 10,612

5 YEAR
54 2,462 6,805 531 9,912
AVERAGE

2002-03 - - - - 10,211

2003-04 - - - - 10,048

2004-05 - - - - 14,265

2005-06 - - - - 13,019

4 YEAR
- - - - 11,886
AVERAGE

Source: PCCC/PCGA

Internal Environment
We are ginners and we are operating in Multan and we buy cotton from Rahim Yar Khan that is
the best cotton producing area in Pakistan. We have experienced commission agents (Buparis)
and we do not have to go through the hassle of interacting and negotiating directly with the
farmer. As I mentioned earlier there is lack of good machinery as machinery is copied from
foreign countries, therefore we have bought machinery from abroad
The main area to sell cotton to spinners is Faisalabad, Lahore etc and therefore Multan is
almost in the center of Faisalabad and Rahim Yar Khan which will further reduce our
transportation cost and in this way we can further give a tough time to the ginners of Rahim Yar
Khan. Then there is excess installing capacity and the infrastructure is also available.

We sell cotton that is low in contamination and is of good staple length and is not easily
breakable. We are ahead of other companies due to this strength as others mostly sell bad or
average quality of cotton due to different reasons mentioned above. We are dealing with one of
the best Bupari of Rahim Yar Khan. We have 3 crore cash in hand to pay the farmers.

We give on time delivery to our customers. We have proper warehouses wear we can store a
large chunk of cotton. There are different forms of cotton and we sell them as per requirement of
our customers. As Pakistan is known for textile industry therefore we have a lot of customers
especially in Lahore ,Karachi, Faisalabad and other parts of Punjab and Sindh. We will transport
cotton to them and charge the delivery charges as well.

At the other hand:

We are very new to the business and therefore we lack experience.

Currently we buy cotton from the Bupari and we dont buy it directly from Rahim Yar Khan , and
because of that the Bupari charges his commission and we get contaminated cotton from him.

We lack the finances to buy our own land where we can grow our own cotton and if that is done
then there is no need to have any intermediary. If that is done we will sell cotton to spinners
which have almost no contamination as it will be on our own.

Like all others we also have illiterate staff who create a lot of problems in handling the
machinery.

If the price falls then we have not experienced it that much that we can take a good decision.
External Environment
Pakistan is the biggest cotton producer where the demand for cotton has
actually exceeded the supply. So there is a need for new cotton ginning
firms. Foreign countries do business with our country in this sector. We can
access the foreign companies online and then we can start business with
them. The raw material is raw cotton that is locally available and we do not
have to buy it from any other country. Although electricity is a big problem in
Pakistan since last 2 years and but the electric power consumption per ton in
Pakistan is 141 kwh as compared to modern gins of similar capacity and
there it is 100 kwh. So there are fixed charges and seasonal rates on ginning
units because of which the cost is Rs.8/kwh for 10,000 bales. But it can be
cut down to Rs.6-6.5/kwh/bale of a 15,000 to 20,000 bales. In terms of power
conservation is can be 6.97 kwh/bale. This is possible if we make small
incremental improvements in the existing technology and improve the
settings of the machines.

There is a possibility of achieving premium for best quality that our

Government has announced on the basis of grade.

As far as ginners are concerned there is no financial constrain for getting

loans. The loans are easily available from private banks to meet the working
capital requirement. Normally ginning firms obtain there working capital by
borrowing from commercial banks in the form of seasonal short term loans to
make seed cotton(Phutti) purchase and these loans can be returned within a
period of 5 to 6 months
There is a lack of good ginning machinery in Pakistan as machinery is copied from foreign
countries. Some research has been done so hopefully in the future we ca use Eco Gins. Now
the Eco Gins can be called a modern and advanced replacement of Conventional Saw Gins
used for ginning purpose. Eco gins will be least costly in terms of installation, there parts are
available locally, they save manpower, there maintenance is very easy, they give high output
and they produce low sound as compared to the Saw Gins.

As far as electricity is concerned the Eco Gin will save around Rs.14/- per bale. If

Some important results of Eco Gin are shown below:

Description Conventional Eco Gin

Sound Level 100 to 102 87 to 60
Prod. Lint Cotton (Avg. Kg/Saw/Hour 3.19 6.26
Ginning Out Turn(Avg.GOT%) 35.67 35.88
Avg.Power Load (Ampere) 27.5 37.5
Load to Prod. Ratio 8.62 5.99

At the other hand

These days there is a big short fall of electricity so it will cause a problem for
us as we have to refine cotton and sell it in bails.

We have a lot of competitors in the market as Pakistan is known for cotton

producing and textile industry.

Value Added Tax (VAT) is imposed now so it is a big problem for us. The
PCGA(Pakistan Cotton Ginners Association) was promised that they would be
excluded from VAT but our Government has not fulfilled its promises. Now
the price of cottonseed(phutti) will come to increase by Rs.400 per mound
which is a bad news.

Other than that sales tax, income tax, professional tax are also levied.
Then the financial activity tax is also imposed so therefore it will further discourage the foreign
investors, from doing business here.

Few proper institutes for ginners so therefore we have unskilled labor force who are totally
illiterate. They have learned their work by their experience or from their parents who also
worked like them. They dont even know about the material used and its composition. Instead of
improving the process they create more problems. They are unable to adjust the saws properly
and cannot do pipe adjustment, this leads to low productivity and more consumption of
electricity. No education criteria has been set till date and people are hired on the ad-hoc basis
or on the basis of their experience

Farmers who do early picking of cotton in the morning before dew dry up and addition of water
to increase the weight of cotton damages its quality. We dont have any good ginning
manufacturers in Pakistan. Actually here people who copied the technology were semi skilled
manufacturers and they have failed to make the exact copy. They have even missed many parts
during manufacturing of Saw Gin machines. So there productivity is 2 bales/hour where as that
of a foreign machine is 7.5 bales per hour. And other than that the present ginning machinery
used in our country is very old and the its parts and components vary in sizes.

The quality of ginned cotton worldwide has improved a lot, and our foreign customers require
trash free cotton.
The trends are shifting from cotton to polyester fiber because cotton consumption has reduced
because its prices have increased. Now if we sell expensive cotton then the textile mills will go
for cheap alternatives and therefore polyester fiber is benefiting from it.
There has been a lot of import of cotton and something should be done in order to reduce it.
The government should import taxes on foreign sellers of cotton and they should encourage the
local producers.
United States has tried to keep world cotton prices very low whereas it gave its own producers
an edge over less developed and less funded rivals
Cotton insects are the major reason for yield losses. Cotton insects such as white
flies affect lint quality and yield potential. They suck sap from leaves and pose a
serious threat.
Many times it happens that a ginning unit does not get raw cotton as expected because and the
other problem is that there are a lot of increasing number of cotton factories in the local area but
the required amount of raw cotton is not increasing. And because of this companies snatch
each others share by paying high price whereas the Government is silent on this although they
should fix this problem, Infact they should intervene as a second buyer and they should fix the
purchasing price of raw cotton

The main source of contamination in cotton is jute, plastic films, leaves, hair, polythene. Now the
problem is that when the middlemen(Bupari) brings the cotton to us it is in the form of jute and
polythene bags. So it is mixed with the Phutti

In this business we do not have any indicators of profit or loss. The only way is that we should
buy best quality of raw cotton so that it produces more cotton lint after ginning and it earns more
revenue. There have been a lot of cases that the companies realize there financial position at
the end of the season.

Local level of prices fluctuates regularly so it is difficult to predict the prices.

Therefore if I buy cotton at some price today and the next day the price falls
then I will incur a loss and if this happens for the whole season than I will
face more loss.

Establishment of company objectives

Company objectives are clear, we want to sell our fine cotton to good textile units and to
maintain healthy relation among well known Spinning mills, through this generating
Profit is our primary objective of all time.
After 5 years we want to adopt the forward integration strategy by planting our very own
spinning mill. this objective will hwlp us in achieving our vision.

The Four P's

Product
Cotton is a natural fiber used primarily as a raw material for textiles. The current market
share of cotton is 56 percent in all fibers. Textile fibers are divided into three basic types
according to their sources such as Cotton Fiber, Man Made Fiber and Wool. We are
producing cotton fibers only from phutti like ginning the phutti and then selling to
spinning mills. We are focusing on quality so the suppliers can buy the quality cotton
fibers from us.

Pricing
Ginning is seasonal business so they set a higher ratio of profit.
Now a days we get raw cotton (phutti) at the rate of Rs.2300/mound after adding the
processing and operational costs we sell the cotton fibers at Rs.6500/mound. This rate
is decided by market, we just have to follow the current market rate.
In Pakistan average bale weight is 150-165kg. Each bale contains 13%-14% of
contaminationn. The following formula is used for costing of a single bale:
165/37.324 * current rate (6500)
in this case a single bale will cost a spinning mill: Rs.28734
The transpiration charges are paid by Spinning mills but in some cases ginner have to
pay the charges in this case they have to mention this in the contract.
At the other hand we sell out the canola which we get from phutti, this canola play a
good role in increasing the profits.

Cost
the establishment of a Ginning factory is not a major investment. Rather, it is the
working capital requirement that really matters for its successful operation.
The capital cost is Rs 8 million, but the working capital requirement is Rs 35 million per
100-day season. It is assumed that the gin will operate for ten hours a day and will gin 8
bales per hour (4 gin stand). Electricity consumption will be 24 KWH per bale priced at
Rs. 16 per KWH. Phutti required to produce one bale of lint is 165 Kg . Phutti rate has
been assumed to be Rs 2300/md, the base price announced by the government. The
working capital requirement has been calculated while assuming that gin has a level
production over the season and needs working capital for a 30-day credit cycle. The
ginners have a severe liquidity squeeze in the peak season that banks can assuage
through provision of liberal credit.
for purchasing phutti for a single bale we need Rs.10167
we are processing 10000 bales a season.

Placement
The Placement of our industrial product involves 3 parties:
1) Ginning Factory
2) Commission Agent
3) Spinning mills

The ginning factories involve agents for security of the contract secondly it reduces their
efforts and save time, these agents have already buyers in their hand so they arrange
interaction between ginners and spinning mills and they agree upon the contract.

Promotion
We are promoting ourselves through personal selling, magazines, conference and
seminars, sponsoring the seminars and events and broachers.
We are using different channels for promotion as for personal selling we have hired
skilled sales force who visit spinning mills situated in Faisalabad and Lahore and take
orders for us .
We also give adds in textile magazines which provide information about us and services
to our customers and potential customers. Sponsoring the seminars and events is also
a very effective tool which we are using to promote ourselves. We conduct conference
and seminars and invite our customers and potential customers to visit our conference
and seminars on which we give them complete information about us and our product
and ask to do questions and give suggestions which helps us in reading our customers
mind what he want from us.
We also spread brochures inscribed with information about us.

Value Chain
Step One
Seed Cotton Conditioning and Cleaning

Cottonseeds with fiber still attached, usually arrive at the gin in large trailers or modules
used for hauling it from the field and for storing it until ready for ginning. From the
storage area, conveyor pipes transfer to various stages of the ginning process, using
large volumes of air to make the flow of the cotton easier and faster.
Typically, seed cotton is first dried in large driers using heated air to reduce its moisture
content. A cylinder cleaner then removes the leaves and other small trash from the seed
cotton by shaking it with spiked cylinders, while conveying it across a screen with small
openings that sift the trash released from the seed cotton by the impact action of the
cylinders.
Next, a stick machine removes any large sticks or hulls (the dried bolls that form a shell
around cotton as it grows) with revolving channel saws. These saws grab the seed
cotton and whip it over metal bars to sling off its trash. If the seed cotton requires
additional drying and cleaning, gins will often run it through another drier and another
cylinder cleaner and stick machine.
Mechanical harvesters have made seed cotton drying and cleaning necessary. Although
mechanical harvesting is much faster than hand harvesting, but mechanical harvesters
also pick more trash with the cotton, which usually contains a high amount of moisture.
Trash, as well as moisture, can adversely affect the quality of the fiber and lead to costly
operating and processing expenses at the gin and at the textile mill.
Excessive moisture is common to cotton grown in the more humid regions of the Cotton
Belt, while cotton produced in the Southwest can be too dry because of the region's arid
climate. Lack of moisture at ginning can also lower the quality of the fiber and contribute
to ginning problems.
To prevent fiber damage and to facilitate ginning, gins try to balance the moisture
content in the seed cotton during drying, so that it is neither too wet nor too dry. With
unusually dry cotton, gins will skip the drying stage and will, at times, add moisture to it
with a special humidifier that blows warm, humid air through the gin's conveyor pipes.

Step 2
Ginning the Seed Cotton
The seed cotton is now ready for ginning. Pima cotton is conveyed to the roller gin,
while upland cottons are conveyed to the saw gin for separation of seed and fiber. After
being ginned, the cotton fiber is often referred to as lint.

Step 3
Lint Cleaning
Lint cleaners remove the small trash from the ginned lint left behind by the cylinder
cleaner and stick machines. Saw-lint cleaners grab the lint with a cylinder saw and whip
it over metal bars to dislodge its trash. Lint cleaning of roller ginned cotton usually
involves a combination of three machines: a cylinder cleaner, an impact cleaner which
uses cylinders to agitate and release the trash from the lint, and an air-jet cleaner which
removes the trash from the lint using high velocity air.

Step 4
Packaging the Lint
In the final stage, a bale press compresses the ginned lint into bales that weigh between
150-165kg. The bales are then wrapped with a protective cover, ready for delivery to the
warehouse where they are sold to various textile mills.
Marketing Strategies:

With the current situation of market our focus is on

Market Penetration because we are seeking to increase our market share for our
product in present markets through greater marketing efforts. We selected this strategy
by keeping in view the following points:
Current markets not saturated
Usage rate of present customers can be increased significantly
We can increase our market share by improving our product quality.
Increased economies of scale provide major competitive advantages
Our target customers (spinning mills) prefer straight re-buy so we maintain close
relationship with buyers, and try our best to satisfy the buyers by fulfilling their
requirements.On the other hand for attracting our potential customers we
convince the firm to Re examine Alternatives.

Profit Impact of Marketing Strategies:

6 Gin Stands
Working Days/season 100
bales ginned/hour 13
working hours/day 11
Bales /season (no. of bales) 13,570
Electricity cost (Rs/KWH) 6.5
Electricity consumption
(KWH/bale) 24
Avg. Phutti Price (Rs/40 Kg) 925
 Standard bale weight (Kg) 170
GOT (%) 32%
51% of
Cottonseed (kg/bale) Phutti
Cottonseed Price (Rs/40kg) 370
Lint Selling Price (Rs/40kg) 2,300
Lint Revenue/bale 1,000

Therefore in 1 season in 1 year we generate a revenue up to Rs.13,570,000

Ginning Units Set Up Cost

 land 5 acres required by the
law
Rs. 0.75
Electric Connection million
Machinery 6 Gins & Bailing Rs. 2.5
Press million
Rs. 0.17
Machinery Errection million
Rs. 1.78
Buildings million
Working Capital Required Per Rs.7
Season million

There are 1,221 ginning factories in Pakistan out of which in Pakistan. Out of that
around 150 operate in Multan out of which most around 100 have a very good and
respected name in the market.

Industry Growth Rate has declined especially due to the short fall of electricity and
other problems which I have mentioned in the threats,

We plan to do vertical integration by buying lands in Rahim Yar khan where we can
grow our own cotton and by transporting it ourselves to our customers but right now
we are an infant firm so we are unable to do that.

Technology used is the same as others but at least it is better than others because it
is always repaired and we take care of its maintenance and that is why up till now we
have not received any complaints from our customers regarding the ginned cotton.