Chemicals Pharmaceutical Textiles PREFACE| FOREWORD|EXECUTIVE SUMMARY |METHODOLOGY| CLUSTER OVERVIEW | COMPANY LISTING | SPONSORS | LAUNCH EVENT| D&B EDITORIAL TEAM Alphabetical Listing Total Employees Turnover Revenue Range Sectors Region Exported Offerings

The textile industry is one of the most important industries of the Indian economy and it is the second largest provider of employment after agriculture. It has witnessed phenomenal growth in recent years and attracted fair amount of foreign direct investment (FDI). The textile and apparel industry in India is estimated to be about US$ 36 billion. It is the largest foreign exchange earner, contributing to approximately 15% of India’s exports and 14% of industrial output. India’s solid performance and growth in textile sector is fuelled by several key advantages that the country enjoys in terms of abundant availability of raw material a nd cheap labour, large domestic market, presence of supportive industries and supportive policy initiatives by the government.

The textile industry is India is highly fragmented. It is vertically integrated across the whole value chain and interconnected with various operations. The organised sector consists of spinning mills and composite mills. The unorganised sector consists of handlooms, power looms and handicrafts. The major sub segments of the textile industry are cotton, blended, silk, wool and manmade. The major products in which Indian textile industry deals is readymade garments, suiting and shirting, shirts and trousers, fabrics, bed linen and embroidery work.

Exports have been the major growth driver of the Indian textile industry in the recent years. The export market has grown enormously specially after the removal of quotas under Multi Fibre Agreement (MFA). India’s textile exports have registered a growth of 7.7% in 2006-07 compared to the previous year. Government of India has a vision to increase India’s share in the global textile trade to 10% by year 2015 from current 3%. To realize its vision, the Government has taken various steps to strengthen the textile sector that include-

• Technology Mission on Cotton (TMC)
• Setting up of Apparel Training and Design Centres (ATDCs)
• 100% Foreign Direct Investment (FDI) in the textile sector under automatic route.
• Revival plans of the mills run by National Textiles Corporation (NTC). Already, for the revival of 18 textile mills, US$ 2.21 million worth of machineries has been ordered for the up gradation and modernisation of these mills.

The cotton based products, especially in the readymade garments and home furnishings segment will be the key drivers of growth for the industry. Readymade garment exports were worth US$ 8 bn in FY06 and will cross US$ 16 bn by the end of 2010, assuming a conservative growth of 15% p.a. According to estimates, investments in textiles are expected to touch US$ 31 bn by 2010. As per the Textile Vision 2010, the industry is expected to grow by 12% p.a. and create an additional 12 million jobs.

Source: Ministry of Textiles

Textile Cluster Insights

Ownership pattern

• 50% of the sample companies are private limited, 10% are public limited, 26% are partnerships and 14% are proprietary firms
• 40% of the private limited companies are in the turnover bracket of Rs 40 mn – 100 mn. About 22% of the private limited companies are in the turnover bracket of Rs 100 mn – 250 mn

Nature of operations

• 43% of the sample companies are engaged in only manufacturing activity, and 57% are in manufacturing as well as trading
• Approximately 37% of the companies engaged only in manufacturing have invested more than Rs 10 mn but less than Rs 50 mn in plant and machineries, 12% have invested Rs 500 mn to Rs 1000 mn
• 23% of the companies engaged in manufacturing as well as trading activity have invested Rs 10 mn – 50 mn in plant and machinery

Sub-segment

73% of the sample textile companies are operating in the cotton sub segment. Approximately 8% companies deal in the manmade segment and 11% of the companies deal in blended segment. 6% of companies deal in the silk sub segment. 35% of the textile companies operating in cotton segment generate 100% revenue from exports.

• 40% of the sample textile companies are utilising 100% of their installed capacity. Another 46% of the companies are utilising more than 60% their installed capacity. 48% of companies are working in one shift only
• 22% of the companies have shown revenue growth up to 30% in the last two years. 9% of the companies have shown revenue growth of more than 30% but less than 100%
• 39% of the companies that have their plants located at Bhiwandi, Ambernath and Dombivli area normally operate in single or at most double shifts. 11% of the companies are situated in Tarapur area. 44% of the companies have their plants in the Mumbai area

Future plans

76% of the sample textile companies have envisaged strategies for future growth. The plans range from capacity expansion, modernisation to new market entry and diversification. Among the priority plans for future growth, around 40% of the companies have plans for capacity expansion. 23% of the companies intend for entry into new markets and marketing related plans. 14% of the companies are planning to diversify. 46% of the companies who have capacity expansion as future plans are private limited. 18% of the companies planning for new markets are exporting mainly to American countries.

Benefits and hindrances

Quality up gradation is the area where 44% companies have benefited through the cluster. 42% have benefited from technology availability and 35% have benefited from funding facilities. 42% companies have benefited from manpower training and 41% have benefited in marketing and related activity. The major hindrances faced by the textile industry are Infrastructure, taxes and duties and lack of government subsidies. Companies from areas like Kalyan, Ambernath, Dombivli and Bhiwandi face major problems due to load shedding. Over 40% of the respondent companies felt lack of government support as the major impediment. The upcoming issues are environmental restrictions, high cost of land, and higher cost of labour.

Note: The Cluster Insights aims to grasp the pulse of the small and medium enterprises operating in their respective industries. The attempt is to chart their operational structure, business practices, future plans etc. For this exercise, we have considered the companies profiled in this publication.