Manufacturing facility for High Value Garments. Textiles Government of Gujarat

Transcription

1 Manufacturing facility for High Value Garments Textiles Government of Gujarat

2 Contents Project Concept 3 Market Potential 5 Growth Drivers 6 Gujarat Competitive Advantage 8 Project Information 9 - Location/ Size - Infrastructure Availability/ Connectivity - Raw material/ Manpower - Key Players/ Machinery Suppliers - Potential Collaboration Opportunities - Key Considerations Project Financials 15 Approvals & Incentives 16 Page 2

3 Project Concept Project Overview The proposed project involves setting up of a facility to manufacture High Value Garments, namely, Ready Made Garments, Handlooms, etc. at Surat Apparel Park, Surat The proposed unit will use sophisticated machinery, raw materials and value added services such as finishing, printing, closure, embroidery and special processes to produce garments of high value. Total cost of setting up of the proposed unit is estimated to be INR 1.33 crore which includes the cost for land and building along with machinery and equipment for the facility What are High Value Garments? High-value Garments (HVG) are an important segment in the textile market. Through the process of higher value addition to garments, garment manufacturers are able to they are converted into finished products which has increased aesthetic look without compromising the quality of the product The key advantage of these garments is the high price, uniqueness, attractiveness and focusing a business more closely on its targeted market segments Additionally, the higher value addition increases market demand along with increased value and price for the garments Segmentation of High Value Garments Users of HVG Men s wear Women s wear Children s wear Unisex Segmentation of HVG by Use Active Formal Wear Casual Wear Traditional Wear Essentials Sportswear Uniforms Baby clothing Toddler clothing Imported and Indian Fabrics Used in HVG Chiffon Tulle Organza Lycra Silk Modals Other Stretch Knits Sources: g=eidlookjt2y2je2e8pynjdpvmdq&hl=en&sa=x&redir_esc=y#v=onepage&q=%22high%20value%20garments%22&f=false; Page 3

4 Project Concept Value Addition Processes Manufacturers of High Value Garments use several technique as part of the value addition process some of the techniques are: Fabric Value Additions Rope Wrinkle/Long Crush/Rope Crushing Rope Crush process is where the fabric is wrinkled in such a way that the effect is long term and the width of the fabric is lessened Crushing Fabric Methods such as trimming fibers, using patterned rolls, treating with hot fluids, using heated drums etc, are followed to create designs or sculpted effects on the fabric. Fabric Crinkling Fabric crinkling is a unique and attractive look to the fabric Crinkling can be done for ladies garment industries, kids garment industry, shawls & Scarfs industry, Textile Embossing Embossing is a technique in which images and patterns are created on the surface of a product through the application of heat and pressure Embossing is a natural and elegant process which changes the nature of the material on which it is done. Foil Printing Fabric Foil printing is the process of printing a pattern on fabric using foil in order to create a shiny effect on the fabric. There are two types of foil printing methods, first, pattern is printed by glue on the fabric and then pressed with foil paper by a hot steel roller. The second method is printing on the foil paper first and then press the foil on the fabric with hot steel roller or iron Finishing Mechanical Finishing Chemical Finishing Other Value Additions Printing All over Print Chest Print Special Processes Tie and Dye Batiks Quilting Closures Buttons Zippers Velcro Hooks Loops Embroidery Hand Embroidery Machine Embroidery Source: Page 4

5 Market Potential Global Market 428 Global apparel market size (US$ billion) F 2023F Currently US-based athleisure- and lifestyle brand Nike is the largest fashion company worldwide with revenues amounting to USD 30.6 billion Spanish fast-fashion giant Inditex is the second largest fashion company worldwide with luxury brands such as Zara, Pull & Bear and Stradivarious in its portfolio Other luxury brand giants include LVMH (French), TJX (US), H&M (Swedish) Domestic Market Indian domestic apparel market size (US$ billion) F 2023F The Indian Designer wear Industry, according to a recent study by ASSOCHAM, is growing at a CAGR of about 40%. The report estimates that the Indian Designer wear industry is likely to cross the INR 11,000 crore mark by 2020 The Designer industry, currently pegged at INR 720 crores is seeing a growing popularity of boutiques selling designer, local wear showcasing finished and ready-to-stitch garments and trendy dresses Apparel segment s growth is supported by a robust growth in the organized apparel segment and entry of players such as H&M, Zara and Marks & Spencer According to the Secretary General (ASSOCHAM), Currently India s share in the global designer wear industry is a minimal 0.32%, but is likely to reach about 1.7% by 2020 The fashion industry in India is still budding and therefore, provides ample opportunity for artistic, hard-working and enthusiastic persons. Gujarat has developed opportunities towards higher value addition product by setting up modern process houses and knitwear/ready-made garments plants to fulfil the domestic and international market demand India s per capita spend on apparel was US$37 in 2013, which was lowest among the above mentioned countries. However, per capita spend on apparel is expected to reach US$129 in 2025, growing at a CAGR of 11% form Source: EMIS, UN Comtrade, Technopak FICCI, Knowledge Paper on Driving growth through innovation Textile Sector India, EMIS (December 2015), accessed via EMIS database Textiles And Apparel, IBEF (January 2016), accessed via Golden%20Period-%20March% pdf Page 5

6 Growth Drivers Rising fitness trend Rising fitness trend amongst urban women has lead to increased demand for HVG such as knitted swimwear, sportswear, sport-inspired footwear and yoga pants Manufacturers are expected to launch products focused on urban women with benefits such as flexibility, ease of washing, light weight and hygiene Entry of global apparel brands Growth in internet retailing 100% FDI in single brand retailing has led to an increase in the entry of top global apparel brands in India H&M and Gap entered India in 2015 and plan to expand their stores to 50 and 40, respectively by 2020 Aéropostale also entered India in 2015 and has tied up with Arvind Lifestyle Apparel and footwear retailing through internet registered a growth of 86% in 2015, driven by the rapid penetration of smartphones in India In 2015, smartphones volume grew by 24% in India and the total number of internet users reached 350 million Global brands such as Topshop, Topman and Dogo have taken online route for entry in India Increased role of organized retail Multi-brand apparel stores such as Lifestyle, Shoppers Stop and Westside have witnessed aggressive expansion over the past decade and this trend is likely to continue Indian and international brands have leveraged this channel to capture a larger customer base, sourcing fabrics/garments manufactured in India Favorable government initiatives Scheme for Integrated Textile Parks (SITP) implemented by GoI facilitates setting up of textile units Government of Gujarat has introduced Farm-Factory-Fabric- Fashion-Foreign Textile Policy to strengthen the entire textile value-chain Special incentive of 6% interest subsidy has been extended for promotion of technical textiles in Gujarat Source: APPAREL AND FOOTWEAR IN INDIA, Euromonitor International, March 2016 Page 6

7 Gujarat - Competitive Advantage High raw material (cotton) availability Gujarat Government initiatives Page 7 Cotton production in Gujarat (million bales) % interest subsidy on new plants and machinery for a period of 5 years for HVG and made-ups Two composite centers to be established by 2019 in Ahmedabad and Surat Three textile SEZs FY10 FY11 FY12 FY13 FY14 32% 30% 32% 25% 30% As a % of total production in India ~US$3.28 billion Investment in the textile industry by 2020, creating 1 million jobs Surat Apparel Park has been converted into a SEZ in Ahmedabad were approved in 2014 with investment of ~INR5 billion One CoE (Centre of Excellence) in Gujarat will be developed by NTC (National Textile Corporation) 33% of the cotton produced in India comes from Gujarat Surendranagar, Jamnagar, Rajkot, Bhavnagar and Amreli are the main cotton producing districts Cotton production is also supported by its climatic and geographical conditions as the state has black soil mixed with lime and potash and ~50 cm rainfall that are optimum for cotton cultivation Also, 57% of the cotton cultivations are irrigated in Gujarat, reducing dependence on monsoons Textile and Fashion Institutes Gujarat is home to several leading institutions in textile, fashion and design, such as, National Institute of Fashion Technology (Gadhinagar): the campus at Gandhinagar, inaugurated in 2004 is designed to meet the demands of imparting creative education. NIFT offers a variety of courses including B.Des. In Fashion Design, Accessory Design, Textile Design, and Fashion Communication. NIFT also offers a B.F.Tech in Apparel Production National Institute of Design: NID was established in 1961, and has been a centre for design education, practice and research since. NID offers professional education programmes at Bachelors and Masters level with five faculty streams and 20 diverse design domains Ahmedabad Textile Industry s Research Association: Established in 1947 and starting in 1949, ATIRA is an autonomous non-profit association which is involved in textile research. Source: Cotton Corporation of India International Journal of Research in Engineering, IT and Social Sciences Textile Sector India, EMIS (December 2015), accessed via EMIS database Textiles And Apparel, IBEF (January 2016), accessed via Vibrant Gujarat Manufacturing: Sector Profile, (October 2014), accessed via Sector-Profile.pdf

8 Gujarat - Competitive Advantage Large number of textile hubs in Gujarat Textile hubs in Gujarat Kutch Textile Handicrafts Surendranagar, Manavadar and Gondal Cotton ginning Ankaleshwar Technical Textiles Saurashtra Hand printing and processing Ahmedabad Denims Surat Silk city Gujarat has an established textile sector with more than 1,500 medium and large textile units, and 18 textile-related product clusters Large number of textile units are attributable to high availability of raw materials, with Gujarat being the largest producer of cotton in the country (production of ~12 million bales in FY14) Going forward, the state plans to significantly increase its textile production capacity from the current level of ~50,000 weaving looms ~50% of India's art silk fabric is produced in Surat alone Gujarat is the largest producer of denim in India (65%) and the third largest in the world High availability of skilled manpower for the textile sector Gandhinagar Ahmedabad Vadodara Rajkot Bhavnagar Surat Location of major educational institutions Gujarat has 28 Industrial Training Institutes (ITIs) that offer industrial training courses on Textile and Garment industry with an intake of ~6,000 students per year These institutes offers specialized courses in computer-aided dress making and dress design, pattern making and needle work The government also provides assistance and training to apparel training institutions and the power loom sector The margins of productivity of the garments is lower due to which it becomes a natural choice of the industry to target HVG market in Gujarat. Source: Baseline survey of the Technical Textile industry in India, Office of the Textile Commissioner, 29 March 2016 Manufacturing Sector Profile, Vibrant Gujarat website, 7 October 2014 Gujarat Growth and Prosperity for All, Vibrant Gujarat website, 25 August 2014 Page 8

9 Project Information High Value Garment Processes The High Value Garment process begins after the processing stage in the garment/apparel production where the design and prototype of the designs are prepared and with the use of highly sophisticated machinery and skilled manpower the final garments are produced At this stage of garment/ apparel production various types of value additions are done to give the garments the high quality and aesthetic value along with branding Raw Material Cotton Jute Silk Wool Cashmere Chiffon Modal Lycra Tulle Organza Stretch Knits Processing Ginning Fiber Spinning Yarn Weaving/Knitting Fabric Processing Processed Fabric Garment/Apparel Production Final Garment / apparel Value Addition Fabric Finishing Printing Special Processes Closure Embroidery Quality Check Value addition for HVG At the stages of processing and garment production, value addition is done to finally make textiles High Value Garments. Value addition of various types are done to provide the finished product with greater aesthetic value and brand identity. The value additions will also ensure increase the demand for high value product with superior quality. The types of value additions are: Finishing Mechanical and Chemical finishing Printing All over print, chest print Special processes Tie and Dye, Batiks, Quilting Closures Button, Zippers, Velcro, hooks and loops Embroidery Hand and Machine Embroidery Source: Textiles and Apparel, IBEF, Janurary 2016 ( Value Addition in Garment Industry, Nishok TSR, PSG Polytechnic College Page 9

10 Project Information Raw Materials for HVG In the High Value Garment segment, which includes fashion and designer clothing, silk, satin and cashmere are the three most commonly used fabrics Raw materials used in High Value Garments are both sourced domestically and imported. Some of the imported and Indian fabrics used are cashmere, satin, Chiffon, Tulle, Organza, Lycra, Silk, and various other stretch knits Silk India is the second largest silk producer in the world, contributing to ~18% of the total global production. It has the distinction of all producing all 4 varieties of silk. In India some of the major silk centres include Kanchivaram, Varansi, and Bangalore In Gujarat, silk can be sourced from major silk centres of Surat and Cambay Satin List of Machinery in India Satin, although usually classified in the same category as silk has a few distinctive features. Satin is more shiny compared to silk and usually incorporates some kind of silk fabric into it but has a dull back Satin can be sourced from major silk centres of Surat as well Cashmere Cashmere is known for its long lasting comfort and unbelievably soft appearance. Designers around the world have used this material. Some of the designer to use cashmere in their fashion lines include Kenneth Cole, Micheal Kors and Christian Dior. India is a leading producer of this material and can be sourced locally. Supplier Name Key products Nearest Location Usha International Sewing machines Surat, Gujarat Meera Machine Tools Overlock machines Surat, Gujarat Super Sonic Impex Sewing machine motor Surat, Gujarat Juki India Private Ltd. Hi-tech Machines Industrial Sewing Machines, hitech sewing machines Fusing Machines, Collar Cutting Machines, Embossing Machines, Embroidery backup film Removing Machine, Lable or Heat Transfer Machines Ahmedabad, Gujarat New Delhi Key Manufacturers in India Arvind Limited Madura Fashion & Lifestyle Benetton India Pvt. Ltd Levi s Strauss India Pvt. Ltd Alok Industries Page 10

11 Project Information Potential collaboration opportunities HVG manufacturers can collaborate with: Machinery and raw material suppliers Domestic and international apparel retail brands Organization such as Gujarat Garment Manufacturers Association, Ahmedabad Textile Mill's Association, South Gujarat Textile Processors Association which work towards the development of textile and garment industry in Gujarat Institutions such as National Institute of Fashion Technology for the skill development of employees Key Considerations Since this is a niche segment in the textile value chain, high skill work force is essential Institutes that offer specialized courses in computer-aided dress making and dress design, pattern making and needle work are to be promoted Rising fashion trends amongst urban women increases the demand for knitted swimwear, sportswear, sport-inspired footwear and yoga pants Source: indextb Divisions, Arvind Limited website, About us, Madura Fashion & Lifestyle website, About us, Lifestyle International website, Industry profile: Apparel retail in India, Marketline, May 2015, via ThomsonOne. Overview, Future Retail website, Business Overview, Future Lifestyle website, Raymond Apparel Ltd., Raymond India website, Corporate, Shoppers Stop website, Quarterly Performance March 2015, Shoppers Stop website, About us, Westside website, About us, Pantaloons website, Page 11

12 Project Information Existing Textile Parks S No Name of the Industrial Park Location Taluka District 1 Makson SEZ Pvt LTd 2 Madhukar Infrastructure Developers Pvt Ltd. Olak, Chharad, Derwada, Malika Jansali Balol 1. M/S Dholi Integrated Spinning Park Ltd, Ahmedabad 2. M/s Karanj Textile Park Pvt Ltd. Surat 3. Palsana Textile Park Pvt Ltd, Surat 4. Dholka Textile Park Pvt Ltd, Surat 5. Arvind Garments Park Pvt Ltd, Ahmedabad 6. M/s Shalon Textile Park Pvt Ltd, Surat 7. M/S Jayraj Textile Park Pvt Ltd, Surat 8. M/S Shanti Integrated Textile Park Pvt Ltd 9. M/S Giriraj Developers, Surat Lakhtar Limbdi 10. Rajhans Infracon (India) Pvt Ltd., Surat 11. The Surat Vankar Sahakari Sangh Ltd, Surat 12. Sanika Industrial Techno Park, Surat 13. Ekta Enterprise Platinum Textile park, Surat 14. NSP Infrastructure Pvt Ltd, Surat 15. D D Spintex Park Pvt Ltd, Bharuch 16. Gaytri Cotspin Park PPL, Bharuch Surendranagar Surendranagar 3 Satyesh infrastructures LLP Janiyadra, narnavi Vagra Bharuch 4 Bhadresh Trading Corporation Ltd Varnora, Zinkadi Paiya Bhuj Kutch 5 B. T. C. Cashkot Ind. Ltd. Bhuvad Anjar Kutch 6 Eco Green Industrial Park Pvt LTd Kharchi- Bhilwada Jhagadia Bharuch 7 Adharbhut Industrial Park Pvt. Ltd. Kava Madafar Panchpipla, Vad Jambusar Bharuch 8 Ample Industrial Park Pvt. Ltd. Vad, Jantran Jambusar Bharuch 9 Damanganga Industrial Park Karvad, Dungara Pardi Valsad 10 Green Field Industrial Park Pvt Ltd. Kharchi- Bhilwada Jhagadia Bharuch 11 M/s Ratanakar Estate Developer Por Vadodara Vadodara 12 M/s. Welspun Anjar SEZ Limited Varsamedi Anjar Kutchh 13 M/s Ratanakar Estate Developer Por Vadodara Vadodara The Proposed Unit can be developed anywhere in Gujarat. The preferred location for the proposed unit would be in the existing / proposed parks or in the vicinity of these parks in order to have direct access to the eco system. Proposed/ Upcoming Textile Parks Page 12

13 Project Information Logistics & Connectivity Surat is connected with other districts of the state such as Rajkot, Vadodara and Ahmedabad by rail Hazira port in Surat is ~16 km away from the Surat railway station Proposed The Mumbai-Ahmedabad bullet train project will have Surat as one of the stations In 2016, the Gujarat government assigned Delhi Metro Rail Corporation as a consultant for the proposed metro connectivity in Surat Rail connectivity was proposed for Hazira and Nargol ports in the 2016 rail budget Rail Road The city is connected to Delhi Mumbai Industrial Corridor (DMIC) which links Ahmedabad, Vadodara and Surat Proximity to NH-8 and NH-6 further enhances connectivity in the city Surat also has very good connectivity with other cities of the state such as Vadodara (154 km) and Ahmedabad (265 km) Proposed Proposed four-lane highways which are expected to improve connectivity in Surat include Dakor-Savli, Vadodara-Dabhoi & Surat-Olpad-Bardoli Air Port Surat domestic airport is well connected to various parts of the country. The city is located ~275 kms from the international airport at Ahmedabad Proposed In January 2015, Airports Authority of India gave an in-principle approval for cargo terminal at Surat airport worth INR70 million. The terminal is expected to be operational in 2017 In February 2016, Surat Airport Action Committee filed an online petition for an international airport at Surat Utility The nearest port is Hazira which is 25 km from Surat Additionally, Hazira port is well connected to Mundra port and Jawaharlal Nehru Port Trust (JNPT) India s largest container port Thus, it provides a convenient textilesrelated trade gateway to International (Europe, Africa, America and the Middle East) and domestic markets Water Power Page 13 Water for industrial purposes can be obtained from four sources viz. Gujarat Water Supply and Sewerage Board (GWSSB), an irrigation canal, dams, and surface reservoirs The main source for the power supply is Torrent Power Limited in Surat Source:

14 Project Financials Cost of setting up unit producing High Value Gents Shirts and Trousers at Surat Apparel Park The proposed unit will have a production capacity of 90,000 Gents Shirts and Gents Trousers per month. The quality of the garments mainly depends on quality of fabric used. Standards such as IS:12675, IS:4039, and IS:10194 will be complied with at the plant Project cost Project components & specifications Cost (INR lakh) Land (800 sq. mtr.) Rate: (INR 1,500 per sq. mtr. as of May 2016) 1 Building Area (375 sq m) (built up) (@ 3000 per sft) Factory Shed 250 sq. mt Store (Raw Material) 100 sq. mt. Store (Finished Goods) 75 sq. mt. Land & Building Component Machinery & Equipment Other Fixed Assets Machinery Total Capital Cost Working Capital (Per Month) Staff and Labor 2 Raw Material and Utilities 33 Total Recurring cost 35 Total Capital Investment Machinery & Equipment 28 Working capital for 3 months 105 Total Capital Investment 133 Source: Project Profile on Gents Shirts and Trousers, MSME Development Institute, Ministry of MSME, GoI Page 14

15 Project Financials Manpower requirement in the proposed HVG manufacturing unit Manager 1 Sales Representative 1 Accounts Officer 1 Production Manager 1 Cutting Master 1 Skilled Workers 55 Pressman 4 Unskilled workers 6 Machinery and Equipment Equipment Qty Single Needle Lock Stitch Machine with motor 50 6 Power driven cloth cutting machine 1 2 needle overlock safety stitching machine with trimmer 1 Double Needle Lock Stitch Machine 2 Button Hole Making Machine 1 Button Stitching Machine 1 Hot Fusing Press 1 Garment Washing Machine 1 Hydro extractor 25 kg capacity 1 Tumbler Dryer 25 kg capacity 1 Flat Bed Steam Iron Press with Vacuum Table 4 Zig Zag Embroidery Machine 1 Generator Set 30 KVA 1 Wash Room Trolleys 4 Page 15 Source: Project Profile on Gents Shirts and Trousers, MSME Development Institute, Ministry of MSME, GoI

16 Approvals & Incentives Approvals For approvals, the project report should be submitted to respective District Industries Centres (DICs). DIC will forward the proposal to Industries Commissioner who will submit the report to State Level Approver Committee (SLAC) for final approval Incentives from Government of Gujarat Incentives to Textile and Apparel Sector from the Government of Gujarat (INR million) CAGR: 125% 400 1,340 3,900 FY11 FY12 FY13 FY14 FY15 FY16 During FY16, incentives provided increased ~3 times y-o-y and are expected to rise further 5% interest subsidy on bank loans for five years for those who establish new plants for value addition chain like ginning, processing, weaving, knitting and machine carpeting 7% interest subsidy on new plant and machinery for five years for cotton spinning, garment manufacturing and technology up gradation Refund of value added tax (VAT) on expansion of new units in spinning and power tariff concession to cotton spinning and weaving units Financial assistance for skill development centres, for technology acquisition and also for supporting energy and water conservation as well as for environmental compliance Incentives from Government of India (GoI) Under the Technology Upgradation Fund Scheme (TUFS), the GoI is offering 5% credit linked interest subsidy on purchase of textile machinery In 2016, the government also approved an amended technology upgradation funds scheme (ATUFS), where the GoI has made a fresh allocation of INR51.5 billion as one time capital subsidy for new investment apart from allocated budget of INR33.8 billion for limited liability Through the ATUFS, the GoI aims to attract an investment of INR1,000 billion by 2018 Scheme for Integrated Textile Parks (SITP): 40% capital subsidy to a maximum of INR40 crore on total project cost on projects approved by government. Also, 100% FDI allowed for textile sector The basic custom duty on imported technical textile machinery has been reduced from 10% to 5% and support to start-ups is also provided GoI has increased the duty drawback of 3.2% to 4.7% (depending on the category) for exports of non-fabric inputs made from imported fabrics to incentivize high value garment (HVG) exports Source: Gujarat Textile Policy, Industries and Mines Department, Government of Gujarat, 5 September 2012 Manufacturing Sector Profile, Vibrant Gujarat website, 7 October 2014 Industries Commissionerate website, accessed on 1 June 2016 Textile industry welcomes amended TUFS, Business Standard, 2 January Page 16

17 Ministry of Textiles, Government of India Industries & Mines Department Gujarat Industrial Development Corporation Office of Industries Commissioner Industrial Extension Bureau Controllerate of Quality Assurance (Textiles and Clothing) This project profile is based on preliminary study to facilitate prospective entrepreneurs to assess a prima facie scope. It is, however, advisable to get a detailed feasibility study prepared before taking a final investment decision. Office of The Industries Commissionerate Block No. 1, 2nd Floor, Udyog Bhavan, Gandhinagar Gujarat Ph.: / ID: iccord@gujarat.gov.in