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KOHINOOR TEXTILES

“INTERNATIONAL BUSINESS AND WTO”

“INDUSTRY SELECTED”
KOHINOOR TEXTILE MILLS
Textiles
KTML was established in 1953 at Rawalpindi and is one of the oldest companies of Pakistan
with over 50 years experience in textile manufacturing. It was initially set up as a spinning and
weaving project with 25,000 spindles and 600 looms. However, after decades of aggressive
expansion and modernization KTML has emerged into a fully vertically integrated home textiles
company with state of the art capabilities for spinning, weaving, dyeing, printing and stitching.
The company has a diverse customer base with sales in both the local and export markets. The
main international markets include Asia, Europe, USA and Australia.

“MODE OF BUSINESS”
Export

“PRODUCT SELECTED”
Finished goods

Kohinoor Textile Mills Limited engages in the manufacture of yarn and cloth, processing and
stitching the cloth, and the trade of textile products. The company offers a range of coarse and
fine count yarn; various greige fabrics for home textile products; and dyed and printed fabrics for
stitching. It also provides various finished textile products, including bed linens, duvets and
pillows, fillings, curtains, decorative fabrics, shower curtains, woven table linens, and
napkins. In addition, Kohinoor Textile Mills Limited, through its subsidiary, All the products
are being exported in shape of Bleached, Dyed & Printed Piece Goods and Home Textile
Products including Bed Linen (Duvet Covers, Bed Sheets, Fitted Sheets, Valance Sheets, Bed
Skirts, Comforters, Bed Spreads, Pillow Covers, Pillow Shams), Furnishing Items (Ready Made
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KOHINOOR TEXTILES

Curtains, Pelmets, Drapery Sets, Tie Backs, Cushion Covers) and Table Linen (Table Covers,
Napkins, Seat Pads, Table Mats).
“REASONS”
To expand the business internationally

Want to grow because the nature of the competitive environment will not let you stay the same
size

To expand sales

To acquire resources

To diversify sources of sales

To diversify sources of supplies

 Minimizing competitive risk recognition that trade increases standard of living

Access to more products enhances lifestyles

 Trade increases technological opportunities

Trade increases chance more people in the society can make money

Increased Global Competition

Economies of scale

Smoothing effect on order book

Tax advantages

“CUSTOMERS”
Asia
Europe
USA
Australia.
Big stores that are wall mart, sears etc
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“MAJOR CUSTOMER OF KOHINOOR TEXTILES”

Wal-Mart
Wal-Mart has 8,500 stores in 15 countries, with 55 different names. The company operates under
its own name in the United States, including the 50 states. It also operates under its own name in
Puerto Rico. Wal-Mart operates in Mexico as Walmex, in the United Kingdom as Asda ("Asda
Wal-Mart" in some branches), in Japan as Seiyu, and in India as Best Price. It has wholly owned
operations in Argentina, Brazil, and Canada. Wal-Mart's investments outside North America have
had mixed results: its operations in the United Kingdom, South America and China are highly
successful, while it was forced to pull out of Germany and South Korea when ventures there
were unsuccessful.

 Wal-Mart is a powerful retail brand. It has a reputation for value for money, convenience
and a wide range of products all in one store.
 Wal-Mart has grown substantially over recent years, and has experienced global
expansion (for example its purchase of the United Kingdom based retailer ASDA).
 The company has a core competence involving its use of information technology to
support its international logistics system. For example, it can see how individual products
are performing country-wide, store-by-store at a glance. IT also supports Wal-Mart's
efficient procurement.
 A focused strategy is in place for human resource management and development. People
are key to Wal-Mart's business and it invests time and money in training people, and
retaining a developing them.

KOHENOOR supplies following products to WALMART

 Value added textiles

 Bed linens

 Sports wear

 All the products are being exported in shape of Bleached, Dyed & Printed Piece Goods
and Home Textile Products including Bed Linen (Duvet Covers, Bed Sheets, Fitted
Sheets, Valance Sheets, Bed Skirts, Comforters, Bed Spreads, Pillow Covers, Pillow
Shams), Furnishing Items (Ready Made Curtains, Pelmets, Drapery Sets, Tie Backs,
Cushion Covers) and Table Linen (Table Covers, Napkins, Seat Pads, Table Mats).
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“NEED OF THE PRODUCT”

 Due to insufficient growth and production
 High labor costs
 Textile companies began to migrate south where they were closer to raw materials, labor
was cheaper, and they were closer to coal supplies needed to operate the steam engines.
 Relatively poor climate for agriculture seemed a perfect fit

SWOT ANALYSIS

“Strengths”
Having own electricity plant:

KWML having own electricity power plant which is producing not only for the KWML but also
providing electricity to other companies and to govt. at subsidy rate.

ERP software:

ERP (Enterprise Resource Planning) has been installed in KWML that’s why company is saving
all records in systems and having huge database.

Power Looms:

KWML has purchased latest power looms Toyota Air Jet Power Looms. That’s why they have
reduced the production cost and have increased the quality and efficiency of their textile
products.

Cross Cultural Communication:

In KWML there are near about 4500 employees who are from different environments and having
different cultures but fortunately there is no cross cultural communication.

Market Reputation:
KWML is one of the major Mills in Pakistan that’s why they have little bit reputation in local
market and having trust from investors.

“WEAKNESSES”
Employee’s motivational level:
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The one weakness of KWML is that their employees are not motivated that’s why they are
getting off and putting their resigns in front of managers and executives. This is the
responsibility of HR department to find out at to see at the time of hiring them that what the
thing is that their employees can be motivated.

Every booked order is delivered lately:

The delivery of each contract is always not done on time. The customer has to wait for 4 to 5
weeks to get his/her desired product. The main reason is that late purchasing of raw material.
Raw material just like Yarn and Sizing material is not available on time and some time it
happens that there is shortage of raw material during the running contract that’s why production
department has to wait for the raw material.

Administrative Expenses:

There are high overhead charges throughout the year particularly administrative expenditures.
Management whether it is lower management or upper management, the expenditures are same
but company is getting equally profit from them that’s why expenditures are increasing.

Reliability on Foreign Customers:

Always organization has to rely on foreign customers and it would become risk especially in
financial matters and possibility of fraud would be there. KWML is too much depending upon
their foreign customers. They have limited number of foreign customers but these are also losing
by lacking of quality and little bit high cost.
Commercial Department:
Commercial department of KWML is showing its little bit bad performance. Means always the
yarn is purchased late and on credit and payments are done by the department always very late.
There is no proper or pre-plan for the month or for couple of weeks so that amount should be
received to pay the suppliers. Each time purchasing of yarn is done belatedly so that looms not
run and hence per day cost increased and depreciation also.

Go down Position:

There is no proper placing for final products to place them safely and at the time of their dispatch
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there is possibility of mistake.

ERP Software:

It’s good that KWML has ERP software in their systems. But there are number of errors that are
occurred much time. For example, during the dispatch of product, you have to click all the rolls
manually. There is no option to select them all and other problem is to calculate the weight of
packed rolls. You have to do all these things manually.

Communication Gap:

There are a little bit gaps in communication between the departments. May be these confirm each
and every thing from each other but still they make mistakes and blame each others to safe them.

Team Building:

A major problem is team building. There is almost no concept of team. Each person is doing
individually and performing his/her activities.

Casual Attitude:

The attitude among the employees is very casual. No one following the rules and regulations of
the company. Some implementation is done among the executives but not at managerial level.

HR Department:
HR Department is almost useless and only performing two activities. These activities are making
salaries and attendance of the employees and workers. They are not working to train the
employees and making appraisals to evaluate them.

Marketing of textile products:

KWML has no proper planning for the Marketing. They advertise about their selves only from
newspapers. That’s why limited number of people knows about them.

“THREATS”

Political instability:
As we all know that the political situations of Pakistan are one of the worst situations of the
whole world. Each new government establishes its new rules and regulations which impact the
industries badly. Now a day there are many major issues which are affecting the textile industry
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as well as other countries just like Musharaf’s impeachment, PM Shaukat Aziz Fraud, New
elections for Provisional and national assemblies and the major issue was the murder of BB
Banizr Bhutto. Now the new government of Pakistan has implemented some new rules for the
textile industry which are almost of them are not in fever of the industrialists. These are

 31% increment in the prices of Gas

 Near about 10 rupees per liter increment in price of petroleum

 Bann to export the raw cotton

 No subsidy for the research and developments in the textile industry

Against these rules and implications, All Faisalabad Textile Mills boycott in July 2008 by
shutting down their Mills and factories. Now the government has provided them some subsidy in
Gas prices.

High consumption of petroleum:

The high consumption of the petroleum is also the major issues because in international market,
their prices are going up and touching sky, due to which the freight costs are increasing day by
day and hence the cost of production, is also increasing rapidly which is becoming the reason of
losing foreign customers of Pakistan.

Shortage of electricity:
The government of Pakistan still unable to provide the required quantity of electricity, the usage
of electricity has been increased. The companies who have their own electricity plants are save
but those who don’t have are facing a major problem of shortage of electricity.

Employees:
Kohinoor Weaving Mills limited is facing a major problem of their employees because they
getting off from KWML. They think that they are not getting reasonable and valuable salaries
and incentives from the company. The major reason is also that company is losing its value and
reputation in the local market as well as in international market, that’s why they are getting off
from the company to secure their future and present as well.

Poor Research & Developments:

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KWML has not been working for better Research and Development Department for some years.
They are not focusing to improve their technology and expand their market share. They just
keeping focus on their current systems which are producing not too much good quality products
that’s why some of foreign customers are dissatisfied from them and shifted towards other
suppliers.

Increment in freight charges:

The prices of petroleum have been increased and still increasing rapidly. That’s why the freight
charges have been increased and the cost of productions has also been increased by the huge
amount. Due to these increments, the sale price has also been increased but customers are not
ready to pay more for a good quality instead of better quality. And transport companies are
demanding more increments to use their transportation services.

International and local competitors:

One of the major threats at international level which KWML and textile industry of Pakistan has
to face, is international competition which is growing up and competitors are capturing the
market share rapidly that’s why Pakistan’s market share in foreign market is cutting down
gradually due to high cost but poor quality of their textile products.

In local market, there are many companies in Pakistan who are improving their quality of textile
products by acquiring new technologies. The big giants of Pakistan textile industry are

 NISHAT TEXTILE

 SAPHIRE TEXTILE

 KTM TEXTILE

 COLONY TEXTILE

 YUNIS TEXTILE

 CHENAB TEXTILE

 AL-KARAM TEXTILE
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 GULISTAN TEXTILE

 FAZAL TEXTILE

Lowest price of fabric in world for USA & UK countries:

This would surprise for all of us that Pakistan is offering lowest prices the UK and USA market.
But sorry to say that these prices are coming down gradually due to losing the quality in their
products and services as well. In USA the price per meter is $0.91 which is the lowest price in
compare with other international and especially Asian Suppliers.
KWML also facing the same problem same which is faced by the Pakistan textile industry. But
there are some customers who are still working with KWML which is good for the company for
its present situation and for future.

“OPPORTUNITIES”

New Technology:
The technology has been improved for the textile industry and these technologies are being
acquired by the international competitors as well as by local competitors so they are producing
good quality textile products and increasing the efficiency as well as decreasing the cost of
production. KWML has the opportunity to invest for the new technology. By acquiring the latest
technology, they can increase the production quality, efficiency and can decrease the cost of
production.

Motivating the employees:

HR department can prove and show them they are here for employees by motivating the
employees performing their best. They can find the motivation level of their employees and give
them incentives to motivate them.

Projects for the local market:

KWML has the opportunity to capture the market share locally by launching new projects just
like they are launching “Dhanak “in August 2008. They can start new projects in garments,
Apparels, and in home textile.
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Advertising
KWML has the opportunity to advertise about their selves to promote their textile products.

They can advertise in international magazines about their selves KWML can publish its own

local business magazine to promote their selves can be advertised over the internet (electronic

Marketing) .

KWML’s own Shops:

KWML can open its own shops in local market where they can display their garments products
and Apparels as well as curtains. The big advantage would be that advertising would be done
automatically and your textile products would also be sold to local market.

Online Shopping Store:

KWML can open its online store where they can show their garments variety and apparels. The
advantage of this step would be

 Online Marketing
 Capturing the market over internet internationally
 Capturing the market over internet locally
 The material which you put on your fair price shop can be sold out at online shop.

By availing these opportunities Kohinoor mills can overcome global threats
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“Sources”

 investing.businessweek.com/research/s...
 www.kmlg.com/ -
 CIA fact book
 www.cthistoryonline.org/cdm-cho/.../j_livehd_text_intro.html
 By Personal Visit