However, the industry has now risen to being the second biggest textile industry In the world, only trailing China. It accounts for 38% of total exports In the country, which makes It a major Industry In the country (Singleton, 2007: pop). The factors discussed in this paper affecting the Indian textile industry such as political factors are vital since lack of stability would adversely affect it. Since the economy of India is dependent largely on manufacture and export of textiles with 27% of Its foreign exchange coming from the sector, environmental and social factors re also of great Influence (Singleton, 2007: pop).

Therefore, these factors have been discussed, as have the issues that affect these factors in the textile industry. Analysis of Macro environment in India The textile industry emerged In the 18th century during the industrial revolution as clothing mass production turned Into a major Industry. The textile Industry In India began as an unrecognized industry until liberalizing of the economy in the ass 1 OFF affected by various factors such as environmental, legal, technical, social, economic, and political factors. Political Environment

Business enterprise management, as well as that of their policies, is influenced considerably political systems in existence. Since India is a democracy, stability of political policies is an issue. Production reservation imposed on small companies so as to aid smaller companies led to fragmentation, distorting the industry competitiveness (Roy, 2010: pappy). This sector, however, has now been De-reserved with big corporations now investing more capital in the establishment of bigger facilities and expansion of those in existence.

Foreign investment, initially, was excluded from production of clothing and apparel, which has, however, now been eliminated gradually. This has been done through decreased capital equipment import duties that have given foreign investors a chance and incentive to set up in India. Despite these motivating steps adopted by the government, problems like excise imbalances and taxes still persist because of diversification into Union territories and 35 states. VAT outlines, however, are under implementation to replace other diversification of tax that will clear out these imbalances on implementation (Roy, 2010: pappy).

The Indian government has also introduced measures like an upgrading fund for national technology and the removal of differential schemes of taxation that were discriminatory against big units. Economical Environment Economic factors include employment generation, capital formation, development of infrastructure, natural resource exploitation, infiltration of resources, national income, per capita income, and industrial development in relation to how they influence Indian’s textile industry. The industry provides a fundamental necessity to most people that has, at every processing stage, a huge addition of value.

It accounts for approximately 14% of Indian’s industrial input with Indian fabric being in demand due to its many textures, earth colors, and ethnic dimension (Roy, 2010: pappy). If one is ready to be innovative, it has potential since it accounts for 30% of Indian’s exports. It is the largest employer in the economy and generated 12 million new Jobs in 2011, on top of additional employment potential in the industrial and agricultural sectors, especially in the cotton sector. Exports from the industry topped $50 billion in 2011 with $25 billion exported to the US (Roy, 2010: pappy). Japan, Bangladesh, Canada,

Russia, Italy, France, Germany, the I-J, and I-JAW constitute additional important markets. Sociological Environment Policy makers and managers cannot afford to avoid social variables like knowledge, education, and beliefs and norms common in the rural areas in India. Textile industry in India is cotton based and is mainly to be found growing in rural areas. Therefore, the textile industry in India has to be mindful of its social responsibility in these areas (Swami, 2010: pappy). In the Indian sub continent, social stratification, for instance, has a vital role to play in every day life.

This will have a significant effect on how companies will enter the sector in the rural areas. In the ass, most foreign managers and those from urban areas did not think of these cultural differences between the rural and urban areas, which, however, they were forced to reconsider as farmers preferred to deal with those who they felt as one of them (Swami, 2010: pappy). Technological Environment government assigned increased importance to technology and its transfer, especially via its FEAR and MRS. regulations, industrial licensing policies, and industrial policy resolutions (Swami, 2010: pappy).

Major problems afflicting the textile industry under these factors include inadequate training facilities, fragmented garment industry, a processing sector that is technologically backward and fragmented, weaving and processing structural weaknesses, and an inadequate capacity of the manufacturing industry domestic textile industry. The Indian government has taken various progressive measures such as the introduction of TM, technology upgrade funds, the National Institute of Fashion Technology, 100% foreign direct investment, Apparel Design and Training Centers and others for strengthening and upgrading of

Indian’s textile sector (Swami, 2010: pappy). The textile industry in India, presently, is going through a re-orientation towards other areas apart from the textile sector’s clothing segment, commonly referred to as technical textiles. This vertical movement has a mean growing rate of approximately two times that of textiles for application in clothing, which accounts for over half of output of textiles (Swami, 2010: pappy). These processes of technical textiles need skilled workers and costly machinery.

Legal Environment Various laws relating to foreign exchange regulation, monopoly control, industrial spites, factory administration, and industrial licensing are part of the legal environment affecting the Indian textile industry. The industry has suffered under labor laws that are unfavorable that do not favor the trades as companies do not have an ideal policy to “hire and fire” (Swami, 2010: pappy). There is no trade membership, which is restrictive on tapping of potential markets. There is also lack of economies of scale generation as the government has charged higher interest rates, power rates, and indirect taxes.

Barriers to attaining supply chain links have also en cause by an uneven supply base, creating inconsistent, unreliable, and uncontrollable performance. The ass era brought with it liberalizing that led to many previous constraints on the sector being relaxed. This included removal of the Statement of Industrial Policy, as well as the Textile Regulation and Development Order in the early ass via licensing removal (Swami, 2010: pappy). The Indian government was also a signatory of the General Agreement of Trade and Tariffs in 1995, bringing it to par with international standards.

The end of the regime of textile autos for quantitative import restrictions in the MFC in 2005 under Wet’s Textiles and Clothing Agreement has also greatly affected the sector. Sis’s, Pep’s and specialized textile parks are other regulatory policies that enhance the sector (Swami, 2010: pappy). Environmental Factors The textile industry in India is responsible for the preservation and protection of the environment, as well as maintenance of ecological balance. The Indian government is committed to ensuring that the industry takes their responsibility seriously.

Industrial waste recycling and technology free of pollution is now a reporter concern. For this purpose, the government has adopted legislative measures such as sass’s Water Act that provides for control and prevention of water pollution, sass’s Air Act that seeks to reduce, control, and prevent air pollution, as well as sass’s Environment Act that seeks to ensure improvement and protection of India textile industries can be classified broadly into unrecognized and organized. Prior to the ass, the industry was relatively small and unrecognized with real potential for growth.

The opening of the economy in the ass led to stunning improvements in he industry. The Indian economy is, today, dependent largely on textiles. The industry contributes approximately 14% of Indian’s total industrial production. In addition, the industry contributes around 3% of Indian’s GAP with the numbers increasing steadily (Mazda, 2011 : Pl 200). It also involves approximately 35 million workers in direct employment, accounting for generation of 21% of Indian’s employment figures. The textile industry also accounted for approximately 38% of total exports with the exports forecasted to reach $45 billion by 201 5 (Mazda, 2011: pappy).

In 2007, which was the last year data was available in completion; textile machinery was at an estimated $900 million. At that point, the market was projected to increase at a mean nominal rate of 6% in the following five years (Mazurka, 2011 : pappy). India has approximately 20 domestic companies that offer texturing, spinning, weaving, and finishing. Alkalis group is the most successful, which can be attributed to its longevity and ability to give a range of machinery via sister companies or directly (Mazda, 2011 : Pl 201).

Consequently, the company can meet end user requirements. The market, in the last four years, has been through a recession, which has made players become price sensitive and cost conscious. The future, however, seems bright for used machinery. Major factors that are expected to lead to growth in this sector are reduced used equipment costs that make operations in textile manufacturing more viable, reduced restrictions by government on used capital goods imports, and custom duty lowering on textile machinery that is imported (Mazda, 2011: Pl 202).

RILL is a private company involved in textiles headquartered in Iambi, employing over 12,500 people. It has recorded revenues of approximately $25. 537 million during the 2010 fiscal year, which was an increase of approximately 24. 4% from 2009 (Mazda, 2011: pappy). The market share of the US in imported machinery is at 3% with European countries such as the I-J, Switzerland, and Germany have taken the lead in equipment for winding, carding, weaving, spinning, and finishing of cotton.

One strategy that the US and other countries could use to improve its competitiveness in this industry would be a focus on using turn key basis for marketing used machinery, as well as coupling machinery transfer with buy back ointment, training, and technological transfers for Indian garments and textiles (Mazda, 2011: pappy). This strategy is supported at regional and national levels of the Indian government. Market profile of Textile Industry In order to sustain the growth, it is essential that the industries produce high quality goods at a reasonable price.

The industry needs to continuously modernize machinery, which means that the industry needs to play an integral role in the growth of textile exports in India. Textile prices have been analyzed to be increasingly competitive globally as developing countries continue to enter the textile trade Bandier & Mattie, 2009: pop). In order for India to maintain market share, they need to buy low cost and modern textile machinery that can produce garments and textiles low cost new technology.

In India, there are around 1,200 large and medium scale textile mills with 20% in Combaters. It also has 34 million cotton spindles that manufacture cotton yarn that accounts for 70% of its textile exports, on top of almost 80% of textile yarn coming from coarser yarns (Bandier & Mattie, 2009: pop). Finally, the domestic industry in knitting comprises of by small scale enterprises that do not eave adequate facilities for finishing, processing, and dyeing. These industries are concentrated in Lithuania and Trauma.

The latter produces approximately 60% of total knitwear exports. Almost 32% of exported garments are accounted for by knitted garments with major players including Jersey India, Run processing, and Near spinning (Bandier & Mattie, 2009: pop). Textile Machinery Industry Status Approximately 120 companies are involved in complete textile machinery manufacture. Receipts for this industry in 2007 were approximately $700 million with he industry employing 300,000 workers both indirectly and directly (Bandier & Mattie, 2009: pop).

Demand for this machinery comes from cotton textile end users, as well as those from wool units and manmade fibers textile factors. Major problems that afflict this industry are high quality of equipment that is imported, foreign country competition resulting from decreased import duties on machinery, demand constraints, high finance costs, high component and raw material costs, and inadequate engineering and design capabilities. This industry saw a nominal growth of between 7 and 8% in 2007 (Bandier & Mattie, 2009: pop).

Conclusion In conclusion, any organization and industry that wants to retain market share in the Indian textile industry needs to be socially responsible, adhere to regulations and rules, as well as maintain low environmental pollution. Growth rate in India is dependent on the textile industry, which is a self reliant and independent industry. However, the Indian government instituted strong labor laws that affected the industry significantly. In India, the market is shifting gradually towards garments that are ready made and branded with increased opportunities in the domestic and foreign market.

Report: The Textile Industry In India Arrived Mills Prepared for: Industrial Economics Prepared by: Thrived. Patella school: FUSE- 3 Application Number: 28380 Initiator: ARPA Corded Date: 21104/2013 1 . Executive summary Indian textile Industry has lately been developing in India has contributed a lot towards the economic growth in terms of generating employment, GAP, economic development etc. Also In the recent times the Indian Textile In Gujarat Is booming and there are new mills coming up.

This establishes the aim of my report to analysis the top player Arrived mill which is initiated in Gujarat, Metadata with the help of secondary data provide by the official sites of the company and other sources. To have a further focus and to narrow it down I have studied the denim sector of Arrived mills. An introduction provides with the overall scenario about the textile industry in India and how has it helped in the advancement of the Indian economy. This report further Investigates the role of textile industry In Gujarat and than further talks about Arrived Mills which is the top player in this Industry.

It further Investigates and gives a detailed outline about the denim sector in Arrived mills. And the out come of the analysis is given in the conclusion and recommendations 1 . Acknowledgements I would like to express my special thanks to the following persons who provided me with Information and assistance: * Mrs.. ARPA Corded- our Initiator of the course for her direction, valuable time and encouragement for the preparation of the report. * Shania. Shah who help me in the research bit of the report. Table of Contents 1

Textile Industry in India The textile Industry of India is one of the leading industries in the world. This industry went through a lot of changes after the economic liberalizing in the year 1991. Before this the industry was not that developed and was very unrecognized and unmanaged. This expansion of economic activity gave a push to the Indian textile industry, which has now turned up to become the leading the industry in the world. This industry is present in India since a lot of years and is also considered one of the oldest industry in India.

It contributes around 15 percent of manufacturing value addition that accounts to around one- third earning from gross export and this industry also employs millions of people. Also this industry comes next after the agriculture sector. Textile industry provides the people which satisfy their basic needs which maintains economic growth and also improves the quality of life for the common man. This industry is self- sufficient they have their own production starting from raw materials to the delivering the finished goods. This industry contributes a lot to the Indian economy.

Manufacturing and exports plays an important role in the Indian Textile Industry. India gains around 27 percent of its total foreign exchange by textile exports. The Textile Industry in India is divided into various sectors few of them includes: * O Silk Textiles 0 Woolen Textiles 0 Redeemed Garments 0 Cotton Textiles 0 Jute and Coir In the Textile industry there are about 11228 textile mills which has a strong spinning capacity of 29 millions spindles which accounts to be very high. Yarn is usually produced in the mills, whereas fabrics are usually produced in both mandolin and powerful.

When we talk about the textile industry in India, cotton has always been dominant in this market where around 65 percent of raw materials is consumed to make cotton. The yearly output of cotton production is very high which comes downs to around 12. 8 billion meters. The Textile Industry has highly proving employment to millions, which includes the growers of Jute and cotton, weavers which includes weavers who are involved in both organizing and household sectors which are widely spread across the country. The Indian Textile Industry is very accountable in the global context.

It ranks second in the world after China in the production of basics and cotton yarn. India also ranks fifth in producing synthetic fabrics. 3. 1 Major players In India in the textile industry 1) Wellness India Ltd : their business area is in that of home textiles, terry towels and bath robes 2) Verandah Group: their business operates in Yarn making , sewing of fabric threads and making of acrylic fabric. 3) Look Industries Ltd: business area is in home textiles, woven and knitted apparel fabric, making of garments and polyester yarn 4) Raymond Ltd: this company’s business operates in

Worsted suiting, tailored clothing, denim making, shirting, woolen outer wear 5) Arrived Mills Ltd: expertise in the Spinning sector, weaving, processing and garment production that includes production of khakis, denims, knitwear and shirts. 6) Bombay Dyeing ; Manufacturing Company Ltd: has production of variety of items which includes towels, Bed linen, fabric for suits, shirts, dresses, furnishings and saris in cotton and polyester blends 7) Garden Silk Mills Ltd : operates in Dying sector and printing of fabrics 8) Nonfatal Industries Ltd: their company operates in

Shirting, poplin’s, making of bottom wear fabrics and voile’s 9) TIC Lifestyle : TIC operates in the Lifestyle market 10) Reliance Industry Ltd. : operates in making of Fabric and formal menswear 3. 2 About the textile firms The Indian Textile Industry is major comprised of small-scale firms, these firms performs non- integrated spinning, weaving, finishing. It is the government who has promoted small scale operating firms, labor intensive work these operations discriminates the large-scale firms.

One of the major examples will be that of composite mills these are large-scale mills that does spinning, finishing, weaving and re major role in textile production in many countries. Whereas in India there is only 3 percent generation of output from these mills. Majority of the mills, which are operating in India, are usually owned by public sector. 3. 3 Potter’s five force analysis Bargaining power of customers * There are many countries that are into the textile industry. Lately the textile supplier, which will be followed by other neighboring countries. The customers will not only invest in one country but will invest in several low cost producing countries because they don’t wont to risk their money by investing in Just one entry. The customer has the power to shift that consumption from one country to other. Bargaining power of suppliers India has high bargaining power when it comes to the production of cotton. India is rated as the third largest cotton producer in India. India has a cost advantage as the cotton is locally grown and the cost of production becomes cheaper.

Other countries like Pakistan and china have lower supply of locally grown market. India also has an advantage in terms of labor cost. It is low than compared to the other developed countries like U. S. And China. Threat of New Entrants The threat is that of the smaller players who are penetrating the domestic markets as they cannot enter the global markets. They supply in excess by making the pricing scenario weak in the industry. Small players have successfully done so in denim which includes Arrived mills , * Home textiles, which includes Wellness and Look and branded apparels like that of Raymond.

This is a to the large players in the industry in order to remain in the market they need to gain a significant part in the global market. Threat of substitutes Indian’s export sector is facing threat of substitution from neighboring countries like Bangladesh and Pakistan where their cost of production is cheaper than that of India. This has already started showing the effect; players like Arrived mills has beginning to feel the change as many global buyers have start to shift for other substitutes.

Competitive rivalry * The geographical location of India can cause hindering in the global trading business. Due to the location problems India is detached and lacks behind from major markets than compared to few international competitors like China, Turkey and Mexico. * These are closely located to the global market, which includes Japan, United States and Europe. Due to the distance problem India has high cost of transporting I. E. Shipping and is more time consuming. 4. Textile industry in Gujarat The textile industry of Gujarat has contributed in a great way to the industrialization of the state.

Gujarat has a high scale cotton production when it comes to the textile industry. It contributes around 33% of cotton production in the country. Gujarat has such high scale of cotton production due to the high levels of availability of black soil which is needed for cultivation of cotton. The state also contributes around 35 percent woven fabrics, which again comes from the organized sector of the Indian excite industry. Metadata and Sugar are the two major cities when it comes to manufacturing. These two cities together produce 50 percent of textiles in Gujarat.

Sugar is the largest production house for man – made fabrics and contributes around 45 percent of silk production in India. The textile industry of Gujarat contributes around 25 % to the states gross domestic product. Gujarat also plays a major role in exporting and it contributes around 20 percent of exports in India. In the early sass Gujarat textile Industry went through drastic change as few manufacturing manufacturing of denims which bought a revolution in Gujarat by making it Indian’s ‘land of denim’.

Guajarati textile industry has been so successfully due to several reasons and one of the most important is that it has successfully stored its cold unique culture and tradition. There was a fall in the textile industry in Gujarat where the cotton production has gone were low. After Mood took over he changed certain polices and than there was an increase in the cotton production in the state. In 2001 there was production of 23 lakes bales and after few years the production increased drastically to 1 core 23 lash bales. Gujarat is also a leading producer in Denim.

In the past few years the production capacity in Gujarat has grown specially after Arrived mills came in the picture. The total number of denim mills in Gujarat has drastically increased. Initially Arrived Mills was the only denim producer in Gujarat but now there are quite a few producers that has a share in the denim market that includes Arrive Denim Mill, Blue Blends Denim, Sandal Denim, Sashimi Denim Mill, Modern Denim, Soma Denim, Andean Denim and Keg’s denim. As per now we have around 20 mills operating in India and from which 7 mills are in Gujarat.

Combining these mills they have a capacity of producing 600 million meters of denim in a time span of a year. And from all of these Arrived mills has the highest denim production that accounts to approximately 110 meters production per annum. 5. Arrived mills In 1931, Arrived Mills Ltd was the leading company of the Labial Group, which was valued at IIS$ 500 million. It met its objective with the help of imported state-of-the- art machinery that manufactured luxurious, fine, delicate fabrics.

The company was one of Indian’s earliest during Indian’s industrialization phase to not only have several lull- fledged facilities like spinning, weaving, dyeing, bleaching, finishing and memorizing but also 52,560 ring spindles, 2552 doubling spindles and 1122 looms. In the mid sass’s there was a crisis faced by the Indian textile industry as the power loom sector was whipping out enormous quantities of low-cost fabrics, which resulted in many large, complex mills losing their markets.

Even though the company was at its pinnacle of profitability during this period, it took pre-emotive measures to counter the threat from the power loom sector by intensifying its concentration on the international markets. The company entered the export market for two segments, denim for ease ; fashion wear and best quality fabric for cotton shirting and trousers. The company had become the third largest producer of denim in the world by 1991. The company holds a host of portfolios of international and domestic brands like Lee, Wrangler, Arrow, Flying Machine, Newport, Ruff ; Tuff, etc. Hush focusing on becoming Indian’s largest branded apparel company. Apart from that the company has also whittled out an aggressive strategy to grow its current tasks by establishing a world class clothing manufacturing facilities and offering a one-stop shop, reposing complete garment package to its international and domestic customers. The below graph describes the Equity of Arrived mills. 5. 1 Timeline 1931- 1980 : Arrived Mills Limited is promoted backstairs, Normative and leadership in the Textile Industry. 980-1991 : this was the time span when they penetrated the denim market by being the first Indian company to enter Denim. They also changed the focus of the business by making it global. 1993-1997 : Arrived launch Arrow which is a U. S based brand in India. They set up their largest facility for shirting and knitting in Senate 2005- 2007: during the year 2005 Arrived ranked in he top 3 players in the Industry. They started offering packages of garment to different brands via one- stop shop service on an international level. 010 : Arrived store was labeled as the best fabric selling store in India and also provided customers with best tailoring solutions. 5. 2 Products and brands One of the topmost producers of textile in India, Arrived Mills Ltd. Is extant in both the fabrics and garments sectors of the textile industry value chain. Under fabrics they produce denim, shirting, khakis, knitwear and voile’s. More than 60 percent of the company’s turnover is contributed to denim. It is present in both the domestic and international markets for formal and casual clothing, in the garment section.

The company is dominating the domestic ready-to-wear garments segments. It has not only launched but has been successful in establishing its own brands as well international one, Arrow for formals and casuals, Lee for Jeans, Wrangler for Jeans and Tommy Hellfire for fashion (under license from the respective companies). Arrived Brands Ltd. Its subordinate, manages the company’s own brands which includes Newport and Ruff ; Tuff in Jeans, Flying Machine and Exclaimer in shirts) which are marketed in India and some neighboring countries. 5.

Distribution strengths Arrived mills has accounted to have one of the best distribution strengths in the apparel industry. I No. Of counters I No. Of retails stores in India | 730 | No. Of towns 1 1501 Retail space | 1. 3 Mn. Sq. Ft I No. Of retail store: I Dubbed 15 1 South Africa | 2 | Departmental stores: India | 656 | Middle East 150 1 South Africa | 63 | Multiplicand outlets : India 17001 Arrived is spread all over India with have 730 retails stores. And it is spread across 150 towns. It is also spread globally with have its 5 store in Dubbed and 2 in South Africa.

It has about 656 departmental stores in India. 0 in Middle East and 63 in South Africa. 6. Arrived mills and its denim sector A yearly capacity of 110 million meters is one of the many amusing features of stands 3rd in the production of denims in the world. Its main products consist of ring denim, indigo voile’s, organic denim, bi-stretch denim and fair trade certified denim. All this is besides the regular light, medium and heavy weight denims. The denims come in a variety of shades of indigo, sulfur, yarn-dyed made from 100% cotton and various blends.

Their client list includes GAP, Levi Strauss, Firebombed & Fitch, IF Corporation and Calvin Klein. Arrived denims has designers from Japan, Europe and USA creating a trend setting collection of the season, making it brings attention for the Arrived name. Their denims offer dependability, quality and value for money through their services like shrink-film wrapping, bar-coded labeling of rolls along with washed and unwashed shade blankets with every order a customer makes. It provides a runoff treatment facility that recycles dissipate water and makes denim paper from denim waste as a part of their CEO friendly production process.

It also serves to quality sectors of Europe, US, West Asia, the Far East and the Asia Pacific. Arrived mills has started using high technology which is guided by very well known designers and this has permitted Arrived to expand their delivery in the international markets, this has also been possible with the help of Development and New technology which is called the hub of innovation. All the denims that are produced by Arrived are designed by inputs of expert designers that are based in India, United Sates, Japan and Italy.