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Modern Retailing : Bricks or Clicks ??
etail is the process of selling the consumer goods and/or services to customers through multiple channels of distribution to earn profit. Looking at its meaning, today’s consumer are informed and buy intelligently by analysing all the information gathered by them from their smart devices. Today consumer have many market choice whether they can buy from Brick stores, street shops, online stores or mobile apps.With the new market created to sell, now there is a competition between market to enthuse customer to look and buy. Retail is all about marketing your products with reference to positioning which company wants to give in mind of customer. Ambience, layout of store, placement of garments, kind sales representative, all this make the brand win over the others in clutter of retailing. Offline retail targets two types of consumer. Brand Conscious and Price sensitive consumer. Eg. Indian Organised retail, Brand Conscious consumer targeted by Lifestyle, Pantloon, Shoppers stop etc. Price sensitive consumer targeted by Big bazar, Reliance retail etc. Trading community, small shops are worried whether their existence will be there or not in coming years? The answer is uncertain. The way India’s population digital use is growing, increasing brand consciousness, everyone need to adapt new attitude.India with wide diversity in language, culture, region, religion etc. Market dynamics of each is different, one strategy can’t be implemented in every market. Many Internet companies providing free access of internet in tier 3 & 4 cities as awareness programme. WWW ( world wide web) is major discovery of this century. This discovery has lead great evolution in the world. Consumer wants to try new products from the world, internet is the best medium to search information, reviews and make in-
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formed purchase decision. Small time cities are most fastest growing community who are accessing internet. Brand : Where brand/ company can’t reach through their channel partner to small town/cities, now directly know their user community. In a long run, Channel partners’ dependency will be reduced. SME : e-tailing is an excellent marketing tool, cost effective with fastest/ wide reach. Apparel category, fastest growing category in e-tailing. E-tailing gives you wide range, without exclusivity.Regular wear garments with repeat purchase with same size/ fit, consumer don’t mind to try online option, with discounts in mind. Eg. Ladies tops, denims, etc. Garment wore not only to cover body but it also shows reflect status in the society. Wedding tradition wear, consumer still prefer their local designer/ tailors which keeps exclusivity. Retail is value chain last contributor, today’s buzz word, talk of the town, suddenly everyone wants start professional e-tailing company or work from home as e-tailing partner with the help of social media, web portals. Today when you open your eyes every morning, national newspaper flash with full page advertisement of any online retail store or offline mall discounts offers etc. In a way, its increasing awareness, consumer has more choices to buy from. Whether its offline stores or e-commerce, Retail is the only tool to increase the consumption of the industry, increase consumption is the only survival for manufacturing industry. In this issue, we have taken interviews from established brand, offline retail stores, Statistics of e – commerce. Hope you like our cover story. Your feedback is appreciated. Wish you happy reading..!!!
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COVER STORY : Modern Retailing : Bricks –Clicks- Tap ..!!! 13- New face of Indian Retail by Mr. Avinash Mayekar 14 – E-commerce Brief report 16- Not Just another brick in the wall by Mr. Vishnu Govind 18- Interview : Mr. Mohit Dhanjal- Raymond Ltd. 19- Interview :Mr.Govind Shrikhande - Shoppers Stop 19- Interview : Mr. B.S. Nagesh – TRRAIN ARTICLES 21- New Business Opportunity in Iran by Mr. Arvind Sinha 23- Spinning Geometry by Mr. Akash Bansode COMPANY/ BRAND FOCUS 22- LAXNESS 25- NANDAN EXIM 29- TRIDENT 35 - BIRLA SHOW/ EVENT REPORT 26- TEXTILE FRIENDS MEET 28- ITTA- MEDICAL TEXTILE 29- YFA SHOW 34- Show Calendar REPORT 29- Fabric & Market Review 28- Cotton ADVERTISER INDEX Back Page: Raymond Back Inside :BSL Front Inside :TECHTEXIL Page 3: NarainSysnthetics Page 5: Bajaj Fab Page 7 : SGS Innovation Page 8 :ITMACH Page 9 :Rabatex
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GOVERNMENT NEWS PM attends first National Handloom Day celebrations
The Prime Minister, Shri Narendra Modi, today said handlooms can be a tool to fight poverty, just as swadeshi was a tool in the struggle for freedom. He said Khadi and handloom products provide the same warmth that mother’s love provides. He was speaking at the celebrations of the first National Handloom Day in Chennai. The Prime Minister emphasized that India, whose handicrafts were once in demand across all continents, had not been able to market its handloom products well in recent times. He said that with the world becoming progressively more aware about the environment and holistic healthcare, there is a need to highlight the eco-friendly aspects of handloom products.
He said that the presence of the Prime Minister would help boost the pride and selfconfidence of the weavers. The Textiles Minister said that the Government of India is fully committed to the social and economic development of handloom weavers. Welcoming the awardees of Sant Kabir and National Handloom Awards, he expressed the hope that they would take forward the rich handloom tradition of the country. Shri Gangwar recalled that under the visionary leadership and able guidance of the Prime Minister, various initiatives have been taken by the Ministry of Textiles for development of handlooms.
The Minister said that these initiatives are based on the principles of zero defect (in fabrics) and zero effect (on environment). He concluded by expressing the hope that the handloom sector of India acquires a distinct reputation at the global stage and that the industry would play a distinctive role in national development. The Governor of Tamil Nadu Dr. K. Rosaiah, Union MoS (Road Transport & Highways and Shipping) Shri Pon Radhakrishnan and the Minister of Finance and PWD for Tamil Nadu Shri O Paneerselvam were also present on the occasion. q
The Prime Minister recalled his appeal on the radio programme “Mann KiBaat” in October last year, for all households to keep at least one Khadi product at home. He said that he had been informed that Khadi sales have risen by 60 percent since then. He said a similar effort now has to be made for handloom products. On an emotional note, the Prime Minister said that the entire family of a weaver is involved in the creation of a product such as a saree. He said the family makes the saree just as a mother brings up a daughter - and once it is ready, the family bids it farewell, the way a bride is bid farewell after the wedding. The Prime Minister launched the India Handloom Brand for better market positioning of quality handloom products. The PM also presented the Sant Kabir Awards and National Awards for the years 2012, 2013 and 2014 to distinguished handloom personalities. Union Minister of State for Textiles (I/C), Shri Santosh Kumar Gangwar recalled that it is in memory of the Swadeshi movement that the National Handloom Day is being observed. He expressed his gratefulness to the Hon’ble PM for accepting the Ministry’s request to launch National Handloom Day. Shri Gangwar extended his wishes to the weavers and to all who are working for the development of the handloom sector.
TEXPROCIL welcomes inclusion of exports of cotton fabrics to Bangladesh and Sri Lanka under MEIS TheCotton Textiles Exports Promotion Council ( TEXPROCIL) has welcomed the inclusion of exports of cotton fabrics –both woven and knitted - to Bangladesh and Sri Lanka under the Merchandise Exports from India Scheme ( MEIS) vide Public Notice No. 27 dated July 14, 2015 issued by the Director General of Foreign Trade (DGFT). This is a very positive step taken by the Government as it will increase exports to these two countries , said Shri R.K.Dalmia , Chairman of The Cotton Textiles Export Promotion Council ( TEXPROCIL) . “India can play a big role by supplying fabrics to Bangladeshi and Sri Lankan Garment manu-
SIMA convenes member mills meet to discuss textile industry issues The predominantly cotton based textile industry has been facing several challenges during the recent period owing to higher tariff rates imposed on Indian textile products in all the major international markets when compared to the compet-
CEO of ATDC & IAM Wins Global Award for Outstanding Contribution to Education World Education Congress (WEC) a major congregation and platform of Vice Chancellors and Leading Educationists from all over the World has conferred the “Outstanding Contribution to Education Award” for the year 2015 to Dr.Darlie Koshy, DG&CEO, ATDC & IAM at the World Education Congress & Awards at Taj Lands’ End, Mumbai.This is an international recognition given to Dr. Darlie Koshy for his exemplary role in Leadership, Innovation, Academic and Industry Interface in the education. The award was conferred by Mr. Debashish Biswas CEO, (CIMA). in the presence of Dr. C. M. Dwivedi, Dr. R. L Bhatia, Dr. Aditya Shastri Vice-Chancellor Banasthali University, Brig (Dr.) Surjit Pabla Vice-Chancellor Mangalayatan University, Prof. R. M.
facturers as India is stronger in fabrics and Bangladesh & Sri Lanka are stronger in garment manufacturing” , according to shri Dalmia . However, although certain categories of knitted fabrics have also been included under the scheme , HS Code 6006 which covers most of the knitted fabrics including knitted fabrics with lycra have been left out inadvertently . Further , knitted fabrics with lycra are value added products which are being widely used in garments . According to the chairman ,TEXPROCIL , if any benefit is granted to fabrics the entire range of fabrics should be covered under the benefit to avoid unintended exclusions . The MEIS has also not included exports of value added and labour intensive products like cotton dyed and printed fabrics and made-ups to different African Coun-
tries like Mauritania , Mali, Dar Es Salaam, Burkina Faso , Guinea Bissaou, Niger, Benin, Angola, Senegal ,Togo, Ghana , Kenya and Tanzania which is a major blow to the exporters to the African region ,said Shri Dalmia . The products which are being exported includes khangas , khatangasetc which are used as traditional dresses in Africa and are predominantly manufactured by units located in the Small & Medium Enterprises ( SME) sector , pointed out the Chairman, TEXPROCIL . Shri Dalmia urged the Government to include exports of knitted fabrics covered under HS code 6006 to Bangladesh and Sri Lanka and exports of value added products like cotton dyed and printed fabrics and made-ups to African countries under the MEIS. These measures will give the much needed impetus to exports in an otherwise adverse conditions in major markets . q
ing Nations, undue delay in disbursing the Technology Upgradation Fund scheme subsidies, volatility and uncertainty in cotton prices, sudden glut in the synthetic yarn market, closure of dyeing units in northern States resulting in accumulation of fabric stock in different powerloom clusters, etc. Currently, the spinning sector is having excess capacity to the tune of 10% due to poor demand for yarn exports though there are improvements in the recent months resulting in accumulation of yarn stock and liquid-
Zinyemba, Vice-Chancellor Catholic University in Zimbabwe, Prof. Anglelica M. Baylon External Relations Director, Martime Academy of Asia and the Pacific –Philippines and other dignitaries.
India Skill Forum Award 2011”, and “ASSOCHAM Award” for Best Vocational Institute 2014 for ATDC & National “Education Leadership Award” from Dainik Bhaskar (2013) for Institute of Apparel Management (IAM).
This award was given to Dr. Darlie Koshy DG & CEO ATDC and IAM for his outstanding contribution for Knowledge,skill development and leadership for the upliftment of the society. Dr. Darlie Koshy’s pioneering contributions to Fashion & Design Education over the last quarter of a century has been well acknowledged by the academia, industry and policy makers alike. A Doctorate from IIT Delhi in Management and an MBA from CUSAT, Dr. Koshy has been also trained at FIT New York in Fashion Marketing & Merchandising during 1987-88.Dr. Darlie Koshy as the DG & CEO over the last 5 years (since Nov. 2008) are spearheading the advancement of an education and training Eco-system for Fashion – Apparel & allied sectors having won “UK-
Under this scenario, Mr.T.Rajkumar, Chairman, The Southern India Mills’ Association in a press release issued here today has stated that SIMA will convene a meeting of the Managing Directors of its member mills at 3.30 pm on Saturday, 8th August 2015 at SIMA premises to discuss different problems faced by the industry and decide the future course of action to mitigate the crisis being faced by the industry. q
“I am pleased to know about this significant recognition of “Outstanding Contribution to Education 2015” conferred on me by WEC and accept the award with all humility and dedicate the same to not only the teams of different Education Institutions, I’ve had the opportunity to work with over the last 2 decades which include NIFT Delhi, NID Ahmedabad and the teams of ATDC & IAM Gurgaon but also to the stake holders who have extended support and cooperation over the years” said Dr. Darlie Koshy, DG & CEO, ATDC & IAM. The WORLD EDUCATION CONGRESS 2015 is governed by Global Advisory Council which guides the strategic intent of the congress to its logical success. q
COVER STORY New Face of Indian Retail: Bricks Vs Clicks!
Shri Avinash Mayekar
MD, Suvin Advisor Pvt. Ltd.
ecent war between brick & mortar stores & online retail has changed the face of Indian retail. Retailers are coming up with promotional offers & heavy discounts on merchandise to lure customers for shopping. “Sale” word is used every other day. Indian customer is evolved dramatically from buying books & electronics to buying clothes & other fashion accessories online. In fact fashion is major category having maximum number of transaction in year 2013. India is expected to generate $100 billion online retail revenue out of which $35 billion will come from fashion e-commerce by 2020. According to study conducted by Accel Partners, online shopping of fashion category is expected to grow at the whooping rate of 400%. Online retail has created a great shopping experience for shoppers. Customer can now shop sitting at home enjoying his coffee or his favourite serial episode.Some of benefits like thousands of brands under one roof, heavy discounts, no long queues, no traffics, easy price comparison, user friendly shopping websites or apps & easy return policy make online shopping attractive option over the Brick & Mortar store. One of the best features of online shopping is you can filter goods on the basis of price range, colors, brands & categories. You can compare prices on number of shopping portals & avail the best price. With the growth of online retail, some of the brick & mortal retail stores have also joined the band wagon to grow their sales. Madura Fashion & Lifestyle of A V Birla group sells their brands like Louis Philippe, Allen Solly, Pantaloons, Van Heusen, Peter England & People through Trendin.com. Raymond has launched online platform RaymondNext.com to sell their brands like Park Avenue, Parx and ColorPlus. Arvind, one of the country’s oldest textile and apparel brand houses, has launched Creyate, a custom clothing brand for men and womenthat allows customers to do everything from the comfort of their homes through online platform. They can design their own garments and book home visits by Arvind’s style stewards, who will take measurements and provide consultancy. -Online shopping portals have offered great platform to small time manufacturers & start-up brands. They can sell their products online & have easy access to entire Indian market which was almost impossible without online retail platform. With the online shopping portals, it is possible for them to reach maximum target audience with minimum investment cost & risk factors. The huge cost of infrastructure, marketing expenses & manpower has been substantially reduced. With remarkable growth in purchase made by mobile phones in past 2 years, next face of the online retail will be “App only” shopping. According to MasterCard Online Shopping Survey 2014, purchases made through mobile phones in India have grown by more than 100 percent over the past two years. Currently, most of e-tailers have nominated “Websites” as well as “Apps”. But some of country’s top e-commerce jargons like Flipkart&Myntra have taken bold step to switch to “App only” shopping portals looking at the
strong potential of mobile phones & tablet based purchase in India. Many of the other players are soon planning to join the league. The success of online shopping portals is backed by dedicated supply chain & technology. The warehouses are the backbones of the e-commerce industry. Warehouses are virtually mapped out by software to manage inventories & payments. These companies are constantly smarting up their hardware, software and storage. Highly automated warehouses & efficient supply chain management help them to meet timely deliveries & create great shopping experience for customers. Online shopping portals need to be extra cautious during “Mega Sale Event” announced by them. Millions of users visit the shopping website & Apps during such events leading to huge traffic generation sometimes resulting in overload. The shopper faces technical glitches like down website, problems in connecting with payment getaway during such times which creates a bad shopping experience to users. It is necessary to forecast the kind of response, such events would receive & accordingly planning the infrastructure to avoid such unpleasant experiences to users.
Growth drivers for online shopping •Increase in disposable income Increase in disposable income has definitely increased the number of times shopper shop now. Online shopping offers convenient option for shopping.
•Rise in Internet users IAMAI-KPMG estimates that there will be a total of 500 million Internet users in India by 2017, up from a current number of about 350 million. Growing Internet users is one the major reasons of growth of online shopping.
•Growth in Smartphone Users Increase in number of Smartphone users has further catalyzed the growth of the online retail in India. In 2014, India had 140 million smartphone & 2 million tablet users which are expected to reach to 651 million & 18.7 million respectively by 2019 which marks tremendous potential for online retail in India in coming year.
•Increase in number of working women Working women population has grown in past few years. Busy life schedule leaves working woman with very less time for household work & shopping. Online shopping has given great option to working woman to save her time. In addition to that financial independency is an added factor for increase in number of woman shoppers.
•Youth Population India has world’s largest youth population which is quite open to try new things & new technologies. Online shopping gives smart tech-savvy option to this youth population
low ups. This results in customer dissatisfaction.
The online shopping portal offers thousands of brands under one roof so enticing shoppers with huge variety. This is simply impossible in case of brick & mortar retail stores.
•Missing the fun element of offline shopping
•Heavy discounts & offers Whooping discounts & offers make online shopping attractive to shoppers.
•Extensive Marketing Tools Digital marketing has given an edge to online shopping portals. Now it is possible to track the activities of shoppers & their consumer behavior. Innovative marketing campaigns are launched by online shopping portals to lure customers to shop. They often send personalized campaigns through SMS, mails or App notifications giving customers a sense of accountability.
SETBACKS IN ONLINE SHOPPING •Can’t touch & feel The major setback in online shopping that merchandise can’t be felt & touched. Some of the shopping portals try best to display their product in such a way that it should look almost same in the product image. In spite of the best efforts, sometimes product has been found different in finish, quality or color than customer expectations resulting in customer dissatisfaction.
•Fitting problem Fitting are the most common problem faced by online shoppers. Unlike Brick & mortar shops, customer doesn’t have trying option here, so customers face issues with size & overall fitting of garments.
•Poor Return Policies Some online portals do not offer flexible return policies to the customers. Sometimes the money is not refunded after several fol-
Some shoppers, especially ladies think offline shopping as an experience. For them, online shopping might feel like missing the fun element.
Summary In India, Tier-1 cities are currently occupying big market share of online shoppers because of convenience of shopping in busy life schedule. A day is no longer when this boom will spread across the Tier-2 & Tier- 3 cities. But online shopping boom is themajor concernto many of the country’s retailers & mall operators. Already retailers are noticing the reduction in footfalls in brick & mortar shops during festive seasons. Shoppers prefer to shop sitting at home rather than offline shopping. Shopping sites offering consumers heavy discounts are cutting down the profitability & giving preference to market share. Almost a million of retailers selling online are concerned about cutthroat margins. This is making them difficult to survive. Some of the fashion retailers have already noticed the practice of trying the merchandise in showrooms & buying it online by shoppers because of heavy discounts. Some fashion brands are showing concern because their offline business is getting hit and to the extent there is fear among brands that their image can get hurt if the prices are too low. On the contrary, online shopping portals are also considered as a great platform to retailers to cut down their huge infrastructure cost substantially which can be used more effectively in marketing of the goods. Also it offers easy reach across the country by virtual presence. For long term perspective, though E-tail is here to grow but traditional brick & mortal model will simultaneously exist as brands can’t afford to discount the products too heavily for long term because they need to make profit at some point of time! q
Few Statistics of India:
• 1/6 : Internet users
•Indian Population : 1.2 billion +
• 73.9 miilion Indians surfed the web via home • USD 20 Billion Size of Indian E-commerce inor work computer dustry expected by end of 2015.
• 52% population below 25 years of age • 22 languages • 1700 plus dialects • Biggest Mid Income in the world. • Over 150 million mid income households • Growing consumption from tier 2 & 3 cities • Over 900 million mobile phone connection • Over 130 miilion smart phones • Over 200 miilion internet user • 1 /120 : Tablet Users • 1/10 : Mobile internet user • 1/13 : Social media users
parel , 85 % YOY growth
• 205 million Indian internet user by 2014, expected 350 million by 2015 • 39% Female , 61% Male • 137 million from Urban area, 68 million from Rural area, 58% YOY growth
• E-commerce growing @ 37% • Online travel constituted 71% of the e-commerce market in India, followed by e-tailing (16%). Travel has grown at a CAGR of 32% over 2009-13.
• In 5 years , Indian Rural market 2X bigger • e-tailing will be the biggest growth driver, with expected CAGR of over 60% to $7 billion than urban today in 2016 from $1.7 billion in 2013. Within e-tail• India’s online population : 75% are under 35 ing, fashion is likely to be the driving segment. years • Fashion was $559 million in 2013, and esti• 57 million search for brand related informamates peg the growth in fashion e-tailing to tion anywhere between $3 billion and $6 billion by • 40 million for online review 2016. • Fastest growing web category in India: Ap-
Things should be known about industry Source : business – standard newspaper
Here are five interesting insights from the report.
In a report on e-commerce, however, broking firm Motilal Oswal says that this is just the start of a multi-year growth for the e-commerce sector in India. Indian retailers, therefore, do not have to be too concerned as despite strong growth in USA and China, e-tailing is still only 5-6% of total retail sales there.
1. India is almost 10 years behind China in the e-commerce space. China’s inflection point was reached in 2005 when its size was similar to India’s current market size. Thankfully for India the dynamics currently are similar to what existed in China then – growing broadband penetration, acceptance of online marketplaces,
and lack of physical retail infrastructure in many places. 2. Forget the Flipkarts, Snapdeals and Amazons. Travel is where the real money in India’s e-commerce is. Online travel accounts for nearly 71% of e-commerce business in India. This business has grown at a compounded annual growth rate (CAGR) of 32% over 2009-13. E-tailing, on the other hand, accounts for only 8.7% of organised retail and a minuscule 0.3% of total retail sales. Even within sales of physical goods, books are a mere 7% of total book sales, mobile phones are 2% of all handsets sold, and fashion goods sold online are just 1%. Online jewellery sales account for only 0.2 per cent of all jewellery sold. Motilal Oswal, however, expects e-tailing to pick up with a focus on fashion. 3. Alibaba is an outlier when it comes to margins and making money in the e-commerce ecosystem. The Chinese company makes an operating profit of 40% compared to industry standard (US and China) of 8-10%. Travel sites typically make 2.3%. Amazon, the industry pioneer, is yet to achieve healthy profitability even after two decades of dominance. Indian players, the report points out, are not even thinking of profitability yet. It’s a game of market share and market penetration, causing all serious players to have a war chest ready for when the industry scales multiple times. 4. For every Rs 100 spent on e-tailing, Rs 35 is spent on supporting services like warehousing, payment gateways, and logistics, among others. Delivery costs a platform owner 8-10% implying significant burn. Though 50-60% of delivery logistics today are handled by large e-tailers themselves, this proportion may reduce going forward as the participation of lower tier cities picks up. Presently, aggressive pricing in India is leading to e-tailers making losses on every segment. For a Rs 100 sale of a book, the e-tailer incurs a loss of Rs 24, a loss of Rs 13 in mobiles, and Rs 8 in apparel. 5. Demand in India exists across 4,000-5,000 towns and cities, but there is no significant presence of physical retail in almost 95% of these. High real estate cost is one of the main reasons why organised retail is unable to expand at speeds expected earlier. Real estate as a percentage of sales is 14 times higher than in the US. For large retailers in India, it is 7% of sales as compared to 0.5% for Walmart. Source : Crisil Report on e-tailing Online retailing shadow over physical retailer financials The rapid growth of online retail is, in a sense, reflected in the deteriorating financials of physical retailers over the past 3 years.
At an aggregate level, operating and net margins of companies such as Shoppers Stop, Cantabil, Kewal Kiran, Provogue, and Trent have all shown a declining trend. Even operating parameters such as same-store sales growth, conversion ratio and sales per square feet have been on a decline. For example, in the case of Shoppers Stop, sales per square feet have declined from Rs 8,518 in 2010-11 to Rs 7,837 in 2012-13, while the conversion ratio has come down from 24 per cent to 22 per cent over the same period. Traditional retailers being forced to move online To stay in the game, traditional retailers have been working on their internet strategy. For instance, Shoppers Stop, which started its online store in 2008, has boosted presence and improved features and user interface to bring its online visage on a par with leading e-commerce websites. The company is also trying to leverage its physical network by giving customers the option to return products at its stores. Apart from Shoppers Stop, Croma has an online store with options such as store pickup and cash on delivery. Even manufacturers of retail products such as Titan Industries (watches, jewellery, eyewear, etc) and Aditya Birla Nuvo (apparel - Allen Solly, Louis Philippe, Peter England, etc) have set up beachheads in cyberspace. Going ahead, we believe more and more traditional retailers will board the online bandwagon. Ample proof traditional retailers can compete well online What we are witnessing in India today played out in the US about a decade-and-a-half back. That was when today’s big daddies such as eBay and Amazon debuted. In the next 4-5 years, by the turn of the century, they had become big enough to pose a threat to traditional retailers such as Wal-Mart, forcing them to come up with online strategies of their own. Today, after nearly a decade since the seismic shift began, some traditional retailers boast of a large online presence. Similarly, physical retailers in India will have to establish their presence online quickly. And, with the rightstrategies, they can even compete effectively. For instance, to tackle the queue problem at its stores, Wal- Mart allows customers to shop online and opt for either home delivery or store pick-up. Today, Wal-Mart is among the top 5 online retailers in the US with estimated revenues of USD 10 billion in 2013 from the online segment alone. There are other examples as well, such as BestBuy and Toys“R”Us, which have developed a significant online presence over the past decade and are now among the top online retailers in the US. q
Financial performance of traditional retailers Financial performance of traditional retailers UNITS OPERATING INCOME Rs. Million GROWTH % OPERATING PROFIT Rs. Million OPERATING MARGIN % NET PROFITS Rs. Million NET MARGINS % ROCE % GEARING times NET CASH ACCRUALS TO DEBT times INTREST COVERAGE times CURRENT RATIO times
THE COMPARATIVE PICTURE (2012-13) Mar-11 49325 3027 6.1 92.7 0.2 7.1 0.7 0.05 2.3 1.7
Mar-12 59767 21.2 1603 2.7 290.4 0.5 4.7 0.5 0.04 2.6 1.4
Mar-13 66036 10.5 2001 3 523.8 0.8 4.8 0.6 0.02 2.3 1.4
Over all retail mareket in india Rs.25,286 billion in 2012-13 Organised retail Rs. 1.767 billion 7.0% of overall retail Online retail Rs 139 billion 7.9% of organised retail 0.5% of overall retail
Note: Companies included in aggregate are Cantabil, Provogue, Kewal Kiran, Trent, and Shoppers Stop Source: Company reports, CRISIL Research
COVER STORY NOT JUST ANOTHER BRICK IN THE WALL
Shri Vishnu Govind
Independent Brand Consultant Business Director - Thinkkloud
nline retailing has changed the way brands come closer to their consumers. While the advent of the ‘click’ is being felt in the fashion space as well, for brands built on conventional business models, the ‘brick’ continues to play a significant role in their growth stories.In the previous issue, the Fashion Focus article had covered how the human touch in fashion retailing has changed from an experience ofthe hand feel of the product to the use of the latest touch screen devices these days. We also happened to ‘touch’ upon the fact that exclusive branded stores (EBO) play a big part in taking the brand story forward. For fashion brands, each retail channel has its role to play, be it in business development or in enhancing saliency. In this article, we dwell on how the EBOs differ from other channels in terms of the way they serve the brand. EBOs are expensive, both in terms of operational as well as capital expenditure; yet many brands want to have them and take a huge amount of pride in their network of exclusive stores. Let us explore the reasons for this a little more here! EBOs are solid foundations on which retail brands are built. They enable the brand to showcase a wide range of products that is normally not possible through multi-branded stores. The width of merchandise display might vary from one EBO to theother depending on factors like size of the store, location and purchase patterns in the catchment market. However, in general, the inventory levelin an EBO will be significantly higher than that in an MBO, for that brand, which enables the consumers to experience the brand in the manner that it is intended to be. Unique services that the brand wants the customer to experience, like customized tailoring, or redemption of reward points, are more easily achieved in EBOs. At this stage, we must also take cognizance of the fact that there are different ways in which EBOs can be managed; depending on the kind of business engagement the brand gets into with its channel partner, the franchisee. The classic format of EBOs is the one in which there is no franchisee involvement, with the ownership and operation of the store being in the hands of the company that owns the brand. Quite naturally, this format, normally called COCO (Company owned Company operated)enables the brand owner to control all consumer experience related aspects. Needless to say, this great power comes with the great responsibility of keeping the store running in all aspects of operations- with accountability in terms of product inventory, capital expenditure, real estate rentals, people and other operational costs. In other formats that come with a franchisee involvement, like FOFO (Franchisee Owned Franchisee Operated) and other engagement models, the brand and the franchisee partner each other, in the highs as well as the lows. In stores where the business partner purchases the merchandise from the brand, he practically has the final say in deciding what products the consumer gets to see. In such cases the brand has limited control over the consumer experience and completeness of the brand story that is being told. It needs to be
considered that in many such cases, the business partner has great understanding of the local market and the brand could benefit immensely from that wisdom. In the eye of the consumer, there should ideally be not much difference from one model to the other, though in reality it may quite not be the case. For now, let us not digress much from the topic into related areas like types of EBO contracts. EBOs communicate the brand’s value proposition in a strong and effective manner; they also use window displays, product placement and other visual merchandising elements to tell a compelling story for the season. The experience a customer gets will normally be the same from store to store. Many brands have loyal customers in the sense that a sizeable proportion of business comes from repeat customers. Brands have loyalty programs that help them track how these customers have been shopping. With the advent of technology, the level of data analysis in loyalty programs is much higher than earlier and this enables brands to send focused promotional communications to customers. For instance, a menswear brand could communicate about the arrival of European linen shirts, to a customer who had shown a propensity in the past to buy linen products. This is just an example to show the level of data availability, which is easier to leverage in an EBO network. Multi-Branded outlets too play a major role in generating sales. The business partner, called the dealer, purchases the merchandise from the brand and retails them in a store he runs, along with products from competing brands too. The tendency in this case is for the store to have a certain level of equity in the consumer’s mind which is leveraged to provide a good spread of fashion products across different brands, thereby catering to the requirements of the target consumers who walk in to the store. Well, in this case the store kind of becomes the brand, from the point of view of a purchase decision from the consumer. We would have come across situations where we, or someone we know, wouldhave bought a garment and given credit to the store rather than the name of the product-maker that appears on the garment! The question here is, did the shirt or trouser sell because it is from brand X? Chances are that it is not the case. The MBO channel is more profitable for brands because the store operations and necessary investments are the responsibility of the dealer, who in turn gets his margin for the sale of the product. The brand, on the other hand, taps into the goodwill of a shop in a particular market. Here, we must also understand the fact that there are consumers who like buying products from a particular brand from an MBO. Hence it would be wrong to assume that all the sales from EBOs come from loyal consumers and all the MBO sales come from consumers who do not relate to the brand. The skew, however, is in that direction. The third channel, called Large Format Stores (LFS) are big department stores where the consumer gets to see a very high number of brands on display. They offer sophisticated and modern shopping environments in comparison with MBOs and an opportunity to shop from a wider spectrum of brands.The format also
sees the presence of a large number of private labels that do not retail outside the network of the chain. These private labels enable the LFS chains to get higher profitability and therefore earn better returns on space too. The brands normally do not get to showcase a wide range of merchandise as they do in EBOs, and often the decision of which products of a specific brand is made available to the consumers, is taken by the buyers from these LFS chains. This channel also enables a brand to see how they measure up against competition, before embarking on a capital-intensive EBO-driven approach. From the point of view of a brand, it could possibly fulfill different needs of a consumer, in terms of offering clothing for different occasions, projecting a certain personality, a certain mood as well asother lifestyle aspects. It could, therefore, draw a line in terms of what all customer groups it wants to serve and what all needs of each group it intends to cater to. The EBO channel becomes the perfect route to showcase this; in fact not all EBOs will cater to all customer groups. Brands can have different retail formats, each having its own role within the brand architecture. So we have now seen that EBOs have an important role to play in the marketing mix of a brand. Brands go to a large extent to sustain them; often accommodating loss-making stores for the sheer image value they bring to the brand. Retail rentals pose serious challenges to brands and often we see that even stores with reasonable footfall levels will struggle to break even. Retail locations like Khan Market in Delhi and Linking Road in Mumbai are very expensive for brands, yet many of them retain stores there for the prestige associated with them. Retail profitability is therefore an important item on the annual agenda of fashion brands.
understanding of his needs. On the other hand, getting more consumers involves casting out a wider net; this could bring into play a combination of push and pull strategies. Advertising campaigns on media create aspiration and tend to cater to the needs of the brand across wider geographies and not necessarily to specific stores. This could be backed up by localized customer acquisition initiatives that may or may not involve discounts and other deals for the customer. Brands need to continuously add new customers to sustain growths year after year; for there will always be lapsed customers for various reasons. There is a significant role that impulse plays in purchase decisions in this category and the retail landscape is in a state of continuous metamorphosis. Fashion brands with a mature EBO network constantly track parameters that give an idea of how the stores are performing. While the terminologies and indices used by different companies could vary from the simple to the complex, here are a few that, for obvious reasons, are important to track.
Number of customers who walk in
Conversion rate that shows what percentage of customers who walk in, actually make a purchase
Sales per square feet (per day/year etc.)
Ratio of rent to revenue
Sales to inventory ratio
Average transaction value
At a slightly more evolved level, there are parameters that track Gross Margin return on footage, investment etc.
I like keeping things simple. So while talking about retail profitability, let’s try to reduce jargons as much as possible. How do we make a retail network more profitable? We can achieve it by selling more or by incurring less expenses- or better still, a combination of both. Given a certain cost structure involved in showing the aura of a brand in a store, one that would have become optimized over time, the benefits of a sales upside is always an area of prime focus for brands. How can you sell more in an EBO? While pages can be written as we attempt to answer this seemingly innocuous question, in keeping with the plan to not complicate things, we can say that we could increase sales by two means
We have explored, in this article, the dynamics of the interplay among the brick and mortar channels with a bit of added focus on EBOs. While a few years back, brands typically looked at breaking up the sales goals into three significant channels- EBO, MBO and LFS, the change now is that e-commerce is not just a tick mark in the sheet. Brands have begun to see it as a channel that holds potential for sales. There was a point of time when having a website with a payment gateway was seen as a ‘nice to do’ thing. With the online retailing space evolving fast, brands are now looking to find presence there and get additional business, including having their own store on the web.
i) Sell more to existing consumers
EBOs play a big role in building stature for a brand, which triggers sales in different channels, including e-commerce. Don’t we feel better about buying a reputed brand online, than an unknown entity? Brands need to be flexible in adapting to the changing environment around us. There is a growing market out there with a huge opportunity,the brands that adapt fast will do well, and those who do not, will not. In fact, an online presence that is not up to speed with the changes around, exposes a brand. On the other hand, an innovation gets applauded too.
ii) Sell to more consumers Sometimes simplicity is incontrovertible, right? Let us take these two challenges separately and see how they can be tackled. First, on selling more to existing consumers- the big tool here is the customer database which brands have, irrespective of whether there is an organized loyalty program or not. For existing customers, brands could track parameters like total purchase value in a time period, average purchase in a visit, specific products purchased, or not purchased etc. Store Managers and selling staff are trained on cross selling so as to increase the ticket size, like suggesting a pair of matching trousers to a customer who has just bought a shirt. Once a customer has established a preference for a brand, be it because of its designs, fits or just the brand value, it becomes easier for the salesperson on the floor to suggest other products that he might like, this comes from good customer service standards and
While the discussions on the impact of online retailing often take the shape of a Brick vs. Click debate, we should acknowledge the fact that both have their respective roles to play in driving a brand. The clicks are growing at a fast pace, even as the brick continues to click with the customer. Fair to say, the click is, in fact, a very important brick in the wall of the edifice, built on the strong bedrock called the EBO network. q
Whatever the cost of our libraries, the price is cheap compared to that of an ignorant nation.―
Mr. Mohit Dhanjal
Retail Director, Raymond LTD.
Raymond Group is one of India’s largest branded fabric and fashion retailers. The Group owns apparel brands like Raymond Ready to Wear, Park Avenue, Park Avenue Woman ColorPlus &Parx. All the brands are retailed through ‘The Raymond Shop’– One of the largest networks of over 720 retail shops spread across India and overseas, in over 35 cities, apart from Exclusive Brand Outlets as well as Large Format Stores such as Shoppers Stop, Lifestyle, Central, etc..The Raymond Shop is a premium retail store offering complete wardrobe solutions for men and has been a pioneer in organized retailing in the country starting around five decades ago. TVC INTERVIEWED MR.MOHIT DHANJAL WHO IS THE RETAIL DIRECTOR AT RAYMOND LTD. TVC : What has been the trend of consumption of fabrics and garments in the past 5 years? MD : As per market and industry data: • Total Indian apparel market in 2014 is approximately INR 2,48,700Crores (USD 41 billion) and the market is growing at 9% peryear. • Around 20% of the market is ready-to-stitch and rest 80% is readyto-wear market. • Total e-tailing market in India is USD 2.3 billion as of 2014 and apparel and lifestyle [includes category like apparel, footwear, accessories (bags, belts, wallets) watches, eyewear, personal care, jewellery, etc.] account for 30% of the total e-tailing market which is USD 0.69 billion. TVC : Do you think consumers postpone fabric and garment purchases in the years of high consumer prices and purchase more when prices have reduced? MD:Raymond is an aspirational brand and its products are generally sold at full price. Consumers purchase our products as they aspire to wear quality products. We offer discounts in particular seasons but never reduce price asa discounting strategy. On integrated platforms, discountsare given byplatform owners and not by our company. Price is nothing but a value proposition. At X price, X value will be given, that price then gives value to consumer whether to buy or not. With right price, right quality needs to be given. TVC : We learn that some leading mills and garment manufacturers are starting their own platform to sell their products. Do you think this trend will remain confined to top companies in the field? MD : For companies already having Brick and Mortar stores, it makes sense for them to develop an Omni-channel strategy thereby integrating Online and offline channels into a seamless retail solution. Consumers then have a choice of ordering Online and getting products delivered to their desired location directly or from one of the brand’s neighbourhood stores. Raymond has always had a presence in the Brick and Mortar model which provides ambience and impeccable service to itscon-
sumer. Conversation of sale is not easy in this competitive world and personal touch, custom tailoring and other value added services go a long way in creating a trustworthy brand with loyal customers. Raymond has 720 stores in 350+ cities. Physical presence makes a huge difference giving consumer confidence that their needs and wants are understood and taken care of by sales representatives/ company and also gives them home-like feeling. It also builds trust with the consumer where they know that the shop will not be closed overnight. Sooner or later, companies having physical presence will start their own online e-com website. Studies in USA also show that Brick model along with Online model works quite well. Companies who do not have physical presence, for them integrated platform is the best source to reach customers. But that also needs brand awareness, so they take time to sell. It is not viable for them to create their ownwebsite and sell as they need lot of marketing to drive traffic. Many sales aggregated sites(snapdeal, flipkart, myntraetc) are working better than company direct websites but they also create that platform by aggressive marketing, persistent advertising and relentlesspromotion for driving traffic to their websites. TVC : What is the ideal system of retailing from the point of view of manufacturers and from the angle of consumers? MD : There are no different angles; they are 2 sides of the same coin. Manufactures have to think as per consumer, as it is a consumer centric economy and not manufacturing centric economy. We need to think how we can give wider services and product portfolio to consumers. E-tailing increases consumption, as in discounting scenario consumer tends to buy more with bundle packages offered by e-tailing. Therefore consumption is growing with the onset of Online TVC : Do you think products like fabrics or garments or home textiles are sold on strength of their feel, drape and fibre composition whereas price and mortar model scores over the rest? MD : Fabricsand garments mostlyget sold on look, feel, drape, colour and design/fit. Raymond is the leader in woollen fabricsin India. Fashion conscious consumers aspire to try different fibresthat areavailableglobally. We commercially launched Linen with a distinctive Raymond style, with excellent & superior quality. Consumers don’t really care about fibre composition and its percentage. They mostly care about feel, colourand price. Fibrecomposition is nothing butatechnical quality of a fabric. Eg. Polywool % written on alabel of a garment; still they will prefer the look and its feel no matter what the percentage is. Description of fibre composition for online retailers makes a little difference as consumersimagine how it feels and try to understand the texture after reading the composition. As an industry it is our responsibility to teach consumers about different fibres; their blends and benefits. Manyfibre companies now talk about fibres as brands for retail purposes to create awareness. Eg. Cotton USA for cotton fibre, LIVA for viscose fibre, Woolmark for woollen fibre, Lycra for Spandex fibre, etc. q
Mr. Govind Shrikhande
MD, Shoppers Stop
Shoppers Stop offers retail and online shopping experiences of unparalleled assortment of the leading international and national brands in men’s clothing, women’s apparel and kids clothes; gifts and fashion accessories like ladies watches, men’s watches, artificial jewelry, fine jewelry, handbags, fragrances, cosmetics, men’s footwear, women’s footwear, home furnishing and decor products. Their customer centricity and relentless pursuit to set new benchmarks in retail has made them the leading chain of department stores in India. TVC recently interviewed MR. GOVIND SHRIKHANDE, MD, SHOPPERS STOP to discuss retail marketing trends. TVC : What has been the trend of consumption of fabrics and garments in India? GS : Apparel demand has been growing at 15 % + CAGR for the last five years. TVC : Do you think consumers postpone fabric and garment purchases in the years of high consumer prices and purchase more when prices have reduced? GS : As we do not sell fabrics, we cannot see the down grading. However, we have been launching higher end brands every year and the response has been excellent. So I feel it doesn’t matter much because if the consumer needs something they will buy no matter what. TVC : There is a fundamental shake up in retail marketing. Apart from brick and mortar stores, e-retailing has captured consumers because of competitive prices and heavy discounts. In eretailing also, there are various models, some are software companies, providing a platform to manufacturer/supplier to sell their products. Some hold stocks in their name. There is a problem of taxation in some cases. Will you kindly give your views on different models?
GS : E-com is currently categorized into 3 Models:Pure Play (A company that invests its resources in only one line of business),Market Place (Sellers do not directly interact nor ship goods directly to buyers) and Multichannel or Omnichannel.The models and players are evolving at a breakneck speed. But fundamentally, a large amount of disruption is happening in the last 12 months due to disproportionate discounting and advertising. This is being backed by large PE funding to key market places. TVC : We learn that some leading mills and garment manufacturers are starting their own platform to sell their products. Do you think this trend will remain confined to top companies in the field? GS : There will be a place for a lot of new players. Eventually the best will survive, similar to the best players and best malls. TVC : What is the ideal system of retailing from the point of view of manufacturers and from the angle of consumers? GS : Seamless Omni Channel Retailing is the trend for the future.It is basically the use of a variety of channels in a customer’s shopping experience including research before a purchase. Such channels include: retail stores, online stores, mobile stores, mobile app stores, telephone sales and any other method of transacting with a customer. TVC : Do you think product like fabrics or garments or home textiles are sold on strength of their feel, drape and fibre composition whereas price and mortar model scores over the rest? GS : Global retail is approximately 15 Trillion + USD. Today just about 7% of this business is coming out of On Line. Even 5 years down the line 85% plus business will be done by Physical Retail, so brick retailers do not need to worry about their death. They need to offer more excitement, competency and experience to continue winning. q
Mr. B. S. Nagesh Founder, TRRAIN
B.S.Nagesh is one of the pioneers of modern retail and has more than 32 years of experience in retail. He founded TRRAIN (Trust for Retailers and Retail Associates of India) with the vision of empowering people in retail and relentlessly works to achieve immediate and lasting change in the lives of retail associates in India.
INTERVIEW WITH MR. B. S. NAGESH TVC: : Do you think consumers postpone fabric and garment purchases in the years of high consumer prices and purchase more when prices have reduced? B.S.:Not necessarily. Price and value has become an important
part of any purchase decision, therefore certain kind of consumers buy only during EOSS (End of Season Sales) and discounted merchandise during online sale. On the other hand there are customers who are looking at convenience and experience and therefore their purchases will be based on their needs rather than the retailers’ price offering or inflation. TVC : The present cloth and garment production in the country is US $ 120 billion worth, of which exports are US $ 40 billion and domestic consumption is US $ 80 billion. What do you expect domestic consumption to be by 2015? B.S : The data for 2015 is not currently available. However I believe the apparel market will grow between 7-10% year on year,partly due to better penetration of retail in the tier 3 & 4 cities and up-gradation of wardrobe due to improving lifestyles and aspirations of the Indian consumers. TVC : There is a fundamental shake up in retail marketing. Apart from brick and mortar stores, e-retailing has captured consumers because of competitive prices and carrots like heavy discount. In e-retailing also, there are various models, some are software companies, providing a platform to manufacturer/supplier to sell their products. Some hold stocks in their name. There is a problem of taxation in some cases. Will you kindly give your views on different models? B.S. : Online business is aligned to what is happening in the life of the consumer, therefore it is here to stay and that too for ever. However each of the models existing can be questioned from different angles especially from compliance as far as the FDI laws are concerned as well as the operating models in terms of discounting
in the market place. If the GOI does not create a level playing field for offline and online retailers,we will see the small traders and the modern retail being hit over a period of time which is not healthy for the Indian businesses. TVC : We learn that some leading mills and garment manufacturers are starting their own platform to sell their products. Do you think this trend will remain confined to top companies in the field? B.S.: No,every brand owner will have to be connected to its consumers 24X7 and therefore you will find them connected through multi-channel including online/offline catalogue, etc. and also work on their own or through market places and different technology providers. TVC : What is the ideal system of retailing from the point of view of manufacturers and from the angle of consumers? B.S.: The ideal system from consumer end is to be able to shop whenever they want, from wherever they want at their fingertips. Manufacturers have no option but to align themselves with the consumer needs. However each brand/manufacturer should know their consumers and act accordingly. TVC : Do you think product like fabrics or garments or home textiles are sold on strength of their feel, drape and fibre composition whereas price and mortar model scores over the rest? B.S.: Fashion is sold on the basis of the look and how they can make the consumer feel good about one. Feel and drape are important and value is very critical,however I do not think consumer understands composition. q
Shoppers Stop to ‘FLAUNT’ Femina
Shoppers Stop & BCCL sign strategic partnership Shoppers Stop, India’s leading fashion retailer and Bennett, Coleman & Co. Ltd. (BCCL), one of India’s leading multimedia groups, today announced a strategic partnership to extend Femina, one of BCCL’s flagship brands, into the consumer products space. As part of this unique ‘co-create and co-own’ partnership, BCCL will license ‘Femina FLAUNT’ to Shoppers Stop, to design, develop, and retail the brand, exclusively across Shoppers Stop stores, in the core fashion categories – apparel, footwear, accessories and bags. FLAUNT is the retail identity developed by BCCL for Femina. Commenting on the partnership, Mr. Vineet Jain, Managing Director – BCCL, said, “This is in line with our brand extension strategy to partner with the best-in-class players to unlock immense hidden value in many of our marquee brands. As a group, we’ve always been ahead on the innovation curve, and this partnership is another such example.” Mr. Govind Shrikhande, Customer Care Associate & Managing Director, Shoppers Stop Ltd. added, “In line with our brand philosophy of ‘Start Something New’, we have embarked on a new partnership with the BCCL group to launch ‘Femina FLAUNT’ in our stores. The premium positioning of this brand fits seamlessly into our diverse portfolio of premium brands. We are positive that ‘Femina FLAUNT’ will be a huge success with our discerning customers.” Speaking on the development, Mr. Sandeep Dahiya, Director & business head – Brand Extension, BCCL, said, “It’s a unique partnership that brings together complementing strengths from two formidable industry leaders, in a format that’s a win-win for
both. With Shoppers Stop as the partner, we’re confident of stability, sustainability and most importantly, scalability of our brand, in these categories.” The ‘Femina FLAUNT’ range will be retailed exclusively through 300-400 sq feet of dedicated shop-in-shop space, within Shoppers Stop stores. The range will be launched in the Fall-Winter season this year, and will be available across 20 Shoppers Stop stores to begin with, and going upto 50 stores by year-3. Mr. Salil Nair, Customer Care Associate & Chief Executive Officer, Shoppers Stop Ltd., commented, “We are happy to be the exclusive retailer partners for BCCL’s new venture ‘Femina FLAUNT’. Our partnership with BCCL bears testimony to our efforts to consistently offer fresh, exclusive and unique brands to our customers. With FLAUNT, our customers will have an additional choice in the aspirational women’s wear segment.” Highlighting the uniqueness of the partnership, Mr. Dahiya further added, “This partnership re-formats the existing licensing template in India, by creating a unique ‘co-create, co-own’ model that creates far more value at both ends. It not only gives Shoppers Stop a great opportunity to add one more strong franchise to its portfolio of premium labels, but also helps BCCL unlock significant value in its marquee brand, while still retaining the ownership of the brand.” ‘Femina FLAUNT’ range is being developed for the premium space, targeting today’s urban, independent, progressive and discerning woman, who is 25-35 yrs old, working and residing in the top 25 cities. q
GLOBAL FOCUS New Business Opportunity in Iran
Shri Arvind Sinha
CEO, Business Advisors Group
National President , TAI
he United States and international partners have signed a historic agreement with Iran on its nuclear program, but they still face important choices about just how far to go in allowing Iran back into the global economy. In the short term, U.S. companies will be limited in their ability to join the corporate march back to Iran when sanctions are lifted, and many in the West who have advocated for Iran’s isolation for decades do not want to see their nations’ companies and banks participate in Iran’s economic reintegration. Keeping Western companies on the sidelines, however, would be a strategic mistake. Allowing—or even encouraging—Western companies to invest in Iran provides Tehran with incentives to abide by the deal and gives Washington more advantage over Iran in the future. The new nuclear accord lays out a path for international companies to initiate broad new trading and investment activities once Iran meets key nuclear commitments. For the private sector, this relaxation presents significant opportunities as well as a minefield of commercial risks. The sanctions on Iran for state-sponsored terrorism, regional destabilization, and human rights violations will remain in place. Investors thus face tremendous uncertainty in balancing an emerging market opportunity with the potential for expensive, damaging business losses if they inadvertently violate remaining sanctions. Over the past few years, regulators in the United States have already imposed billions of dollars in fines against Western companies for violating sanctions, even when they have done so unintentionally. This precedent might lead many European and Asian businesses to conclude that Iran’s potential financial rewards are simply not worth the risks. U.S. corporations are even more cautious. For many global companies and banks, hanging back will be the easiest and safest course of action. U.S. policymakers should take a strategic approach to Iranian sanctions relief and encourage the international business community to pursue commerce in the nation. It is not the United States’ job to rehabilitate the Iranian economy, of course, but clarifying the legal pathways toward Western investment in Iran is an important and necessary task. Doing so will increase Washington’s credibility as a good-faith actor, strengthen the nuclear deal, and, most important, provide future economic advantage with Iran. Clarifying the new rules for would-be investors would also limit Iran’s ability to claim that the United States has violated the agreement by stymieing much-needed relief. Likewise, streamlining Iranian investment policy will also pressure Tehran into becoming a better financial hub. Iran’s financial system has been black listed for its lack of integrity, and it received a horrendous report card from the Financial Action Task Force, the preeminent global standard-setting body against money laundering and terrorism financing. Western companies can begin business activities in Iran once sanctions are lifted, and this can provide an effective form of commercial diplomacy. Iran will have to acceler-
ate its nascent efforts to reduce corruption and illicit financing if it is to make deals with the reputable international companies it is courting. Opening financial channels between the West and Tehran may mitigate—although not remove—concerns that Iran could use a revitalized economy to increase its support of terrorism and destabilization throughout the Middle East. If the country’s economic institutions have a financial interest in being responsible actors within the global economy and international financial system, they will be less likely to participate in illicit activities. There is also a strategic advantage for the West in having a broad array of international companies operating within the Iranian energy, infrastructure, and manufacturing markets. U.S. policymakers should ensure that Western companies receive equal footing with their Chinese and Middle Eastern counterparts, who will be quick to enter Iran once sanctions are relaxed. This will help ensure that Iran’s new commercial relationships do not pivot exclusively to Asia. Facilitating U.S. and European commercial investments in Iran should involve three key components. First, U.S. President Barack Obama has to instruct U.S. regulators to provide the private sector with detailed guidelines on how to do business in the country. The U.S. Treasury Department has offered little guidance for companies on how to navigate Iranian sanctions in the past—what it has offered was often vague, contradictory, and not legally binding. If the Treasury Department provides inadequate guidance, companies will be unable to navigate a broad rollback of the most complicated sanctions regime in history. Second, the U.S. government must establish a better, institutionalized system to engage with the business community. To do so, the Treasury Department should create a dedicated “Iran sanctions” hot line, host monthly public meetings with the business community, and release legal opinions and specific licenses for permitted activity with Iran. This will go a long way to make clear which types of activities Washington will and will not support, thereby allowing the business community to begin working within Tehran sooner. Third, the Treasury Department should allow U.S. companies to engage in targeted investment in Iran by expanding the issuance of general licenses. As demonstrated by the recent relaxation of certain Cuban sanctions, general licenses can allow U.S. banks and investors to fund development in Iran—thereby empowering the nation’s youth, entrepreneurs, and civil society through new projects and businesses. This approach could, in turn, help advance U.S. interests by promoting positive changes in Iran. Moreover, a connection between Iran and Western business sectors will provide essential economic leverage in the future. If the nuclear deal breaks down, U.S. policymakers will be best positioned to impose punishing new sanctions if large sums of foreign investment are at stake.
Implementing any deal would be fraught with challenges. However, if the United States is to uphold credible nuclear diplomacy with Iran, it will need to chart a clear course for the private sector to navigate the changing landscape of sanctions. Promoting the return of European and U.S. business in Iran is a smart new way to advance U.S. interests within the country.
will increase with time and it makes good sense to pitch in early.
Prime Minister Modi’s revival of the decades-old suggestion, while on a visit to Turkmenistan ahead of the Iran deal, is interesting. He pitched for an Iran-Oman-India undersea pipeline, which would also carry Turkmen gas. Parviz Aghili, founder of Middle East Bank was in India recently to meet industrialists for possible deals. This is the kind of line, we need to pursue urgently, as China and western corporate giants begin to line up for business in Iran. Even American companies would like to do business in Iran. Competition
The US Defence Secretary visited Israel and Saudi Arabia to reassure them of continues US support. It is not yet certain it this apparent turn about by the US on Iran after decades of hostility is going to be accepted easily by these two long- term allies of the US.
Chinese and Russians already have an effective presence in Iran. With China getting increasingly involved in Afghanistan, it would seem that China now has an additional route to Iran and the Persian Gulf apart from the Turkmenistan route. US would not want to leave the field open and uncontested to these two in this vital area.
For India, the evolving situation is a challenge and an opportunity to bypass Pakistan to gain access to Central Asia. We will have to be consistent, quick-footed and have the stamina for the long race. q
LANXESS water treatment solutions well-positioned to meet the effluent treatment demands of industries in Tiruppur LANXESS, the global specialty chemicals company, is addressing officials from textile industries, effluent treatment plants and others from the Tiruppur region on ‘textile effluents recycling using ion exchange resins and membranes’. The seminar, held at The Velan Hotels in Tiruppur, by the LANXESS business unit Liquid Purification Technologies, is aimed at offering potential solutions for effluent treatment and waste water recycling in the region. LANXESS water treatment solutions, consisting of ion exchange resins and reverse osmosis (RO) membranes, are specially suited for processing the effluents generated from the several textile industries and leather tanneries in the region. Such LANXESS solutions also help industries to meet the increasingly stringent regulations with regard to environmental compliance. Prakash Shanmugam, Head of Business Unit Liquid Purification Technologies, LANXESS India, said on the occasion, “We will be glad to help industries in Tiruppur meet their objectives with regard to waste water/ effluent treatment and offer them tailor-made solutions using our ion exchange resins and RO membranes.We are confident that Lewabrane® RO membrane elements, in combination with our Lewatit® ion exchange resins,can provide answers to all water and wastewater treatment needs.” At the seminar, LANXESS is also showcasing a few grades of ion exchange resins suitable for applications like high TDS (total dissolved solids) water softening and colour /organic removal. In addition, attendees (potential customers) will also have a chance to see the spiral-wound membrane elements used for sea water or
brackish water desalination. The family of membranes encompasses a wide range of reverse osmosis (RO), which were specially developed for sea water desalination. LANXESS is producing the reverse osmosis elements at its plant in Bitterfeld, Germany which has been operational since 2011. With regard to cleaning of industrial wastewater, the removal of toxic, ionic and non-ionic substances is of key importance. LANXESS has a range of special Lewatit® ion exchange and adsorber resins that are able to remove many types of heavy metal ions and organic pollutants. Due to the high selectivity of the resin, extremely low concentrations are economically achievable, thereby ensuring that only contaminant free water is released in the environment. Some of the specific applications that could be relevant to effluent treatment industries are – selective removal of fluorides, arsenic, iron and hexavalent chromefrom groundwater and industrial waste water. LANXESS is one of the few companies that offer both ion exchange resins and reverse osmosis membrane elements – two different yet complementary water treatment technologies, thus making it the right partner for a range of industries seeking water and wastewater treatment solutions. The company also has a manufacturing unit for ion exchange resins at its site in Jhagadia in Gujarat and along with its excellent technical support, it is wellplaced to meet the rapidly growing domestic demand as well as that of the overseas markets. q
International Textile Fair Dubai, U.A.E. Although at the epicenter of the Dubai textile scene, the ITF is sending ripples not only in the Middle East, but across the world too. The October edition might be 12 weeks away, yet the anticipation surrounding it is already discernible. With the ITF newsletter providing an in-depth reasoning behind their philosophy and the social media channels sparking off the razzmatazz, one would be forgiven to believe that the ITF has already begun. Not content with its diligent social media presence, the ITF has also incorporated newsletters and e-shots into its digital campaign. The newsletters, featuring interviews with prominent international exhibitors, seem like compact trade reports in themselves; leading company executives provide a valuable insight about local and foreign markets. Catching up with the exhibitors and tracking their achievements, the “ITF NEWS” tab presents detailed exhibitor profiles.
The e –shots have emerged as a viable pre-cursor to the fair itself; bridging the gap between the fair’s April edition and the upcoming edition. With the majority of exhibitors hailing from Europe and the Middle East, the ITF is slowly gaining foothold in Western Asia too; UrgandhBahmal (Uzbekistan) and Safir Textile (Turkey) recently confirmed their presence at the October edition of the ITF. Between hosting more exhibitors to increasing audience bandwidth, it is clearly evident that the ITF is a step closer to its aim of “achieving textile versatility.” The fair is poised for further growth, but for Dilip Nihalani (Managing Director, ITF) the focus invariably remains the same. He explains, “At ITF, we strive to provide a professional atmosphere conducive to business and networking; and acknowledging U.A.E’s rise as the leading industry for textile industry automation.” q
TECHNICAL ARTICAL Spinning Geometry of Ring Spinning Machine Mr. Akash S. Bansode Research Scholar, D. K. T. E. Society’s Textile & Engineering Institute, Ichalkaranji.
Abstract The ring spinning machine will continue to be the most widely used spinning process in short staple spinning .The spinning geometry is a critical aspect in the spinning process of staple yarn. The spinning geometry influences the distribution of fiber tension in the spinning triangle, twist insertion rate in the yarn, binding-in of fibers, the properties of spun yarns, tension in yarn and the performance of the machine. The spinning geometry represents the dimensions between the elements of the ring spinning machine which are comes in the path of yarn formation and also the inclinations of elements as well as inclination of the yarn with respect to the parts of the machine. Thus in this paper, different aspects of spinning geometry, influence of the parts of the ring spinning machine on the resultant yarn properties and performance of the ring spinning machine are discussed. Key words: Ring spinning, spinning geometry, spinning triangle, fiber tension distribution, balloon control ring, balloon height, deflection angle. 1. Introduction The invention of ring spinning machine was done by an American Mr. Thorp in 1828. In that ring spinning machine the modification and implementation of Ring & Traveller elements done by another American Mr. Jenk in 1830. At today’s scenario more than 170 years Ring Spinning has undergone considerable modifications. Evolution of the ring spinning machine is not yet completed. The ring spinning machine will continue to be the most widely used spinning process in short staple spinning because of it can be used universally, Produces yarn with optimum properties, uncomplicated and easy to control, flexible with regard to volume (blend and batch sizes). In the ring spinning machine the spinning geometry plays an important role regarding quality of yarn and performance of machine.  Definition Fiber strand passes through the drafting arrangement, thread guide, balloon control ring and traveller. These parts are arranged at various angles and distances relative to one another, which give varying deflections and paths of travel for the yarn. The set of dimensions, guiding and leading angles, of the machine elements with each other on ring frame machine which are together referred as the spinning geometry.  2. Spinning Geometry Spinning geometry is a geometrical representation of a ring frame machine elements with respect to formation of yarn. Spinning geometry has a significant influence on the spinning operation and the resulting yarn, primarily upon, tension conditions on fibers and yarn, binding-in of the fiber, number of end breaks, yarn hairiness, yarn irregularity and generation of fly etc. Spinning geometry is optimization decisive factor for machinery manufacturers. However, it has to be borne in mind here that changing a spinning ge-
ometry parameter inevitably entails a change in all other geometry parameters It is therefore an absolutely essential set of parameters to be the machine builder. Within the spinning geometry; the following aspects have to be considered.  •
The Spinning Triangle
The Balloon Height
Drafting arrangement inclination
Wrap of the yarn on the thread guide
3. Spinning Triangle The turns of twist in a yarn are generated at the traveller and travel against the direction of yarn movement to the drafting arrangement. Twist must run back as close as possible to the nip line of the rollers, but it never penetrates completely to the nip because, after leaving the rollers, the fibers first have to be diverted inward and wrapped around each other. Accordingly, at the exit from the rollers there is always a triangular bundle of fibers without twist, the so-called spinning triangle. By far the most end breaks originate at this weak point, because the yarn tension in the balloon cannot be transmitted almost without hindrance as far as the drafting arrangement, whereas twist in the spinning triangle is zero-nor does it attain its full value in the adjoining yarn section either, because of friction at the thread guide.
Figure.2 – Spinning Triangle
The length of the spinning triangle depends upon the spinning geometry and upon the twist level in the yarn. As can be appreciated from the immediately foregoing remarks, a short triangle represents a small weak point and hence fewer end breaks. As usual, however, advantages have to be weighed against disadvantages. If the spinning triangle is too short, then the fibers on the edge must be strongly deflected to bind them in. This is not possible with all fibers. Some edge fibers escape the twist effect and are lost as fly. Other may be bound-in, but at one end only; one fiber end them projects from the body of the yarn, which is therefore hairy. On the other hand, a long spinning triangle implies a long weak point and hence more ends breaks. However, a resultant advantage is that the edge fibers are better bound into the edge fibers are better bound into the yarn, which gives a smoother yarn and less fly. 
3.1 Spinning Triangle in Compact Ring Spinning: In the enlarged view of ring spun yarn is examined, it is easy to see that the integration of many fibres is poor, and they therefore make no contribution to yarn strength as shown in Figure 3. In other words, if all fibres could be completely integrated in the yarn, both strength and elongation could in turn be further enhanced. It is thus obvious that even ring-spun yarns are not yet ideal as regards yarn structure. 
Figure.6– Roller Overhang
Furthermore, the angle of wrap is reduced and the spinning triangle is made shorter. The overhang must not be made too large, however, as otherwise the distance from the exit opening of the roller nip line, becomes too long resulting in poorer fiber guidance and increased yarn irregularity. ,  6. Inclination of Stretch Yarn to Vertical:
Figure.3-Spinning triangles in ring and compact spinning
Figure.4 -Conventional (a) and compact (b) ring spun yarns
The development of the compact spinning process began with the desire to achieve a significant improvement in yarn quality by influencing the spinning triangle Figure 3. The process is focused on achieving higher yarn strength and a reduction of yarn hairiness, especially on eliminating the longer hairs, which have a particularly bad influence on the further process. The improvement achieved is shown in the Figure 3. The Fig. 4(a) displays the fibre triangle at the exit of a conventional ring frame drafting system. The twist imparted by the spindle cannot flow up to the clamping line. The outer fibres spread out and are thus more highly tensioned than those on the inside. The Fig. 4(b) does not show a spinning triangle. The yarn twist flows right up to the clamping line. The yarn is round and smooth. To achieve tenacity comparable with conventional ring-spun yarns, a lower number of turns per meter can be used, which enables higher productivity of the spinning machine, as well as better elasticity and softer hand of different flat textile products. , ,  4. The Inclination of Drafting Arrangement: The angle of inclination of drafting arrangement (fig. 5) is one factor which determines the height of the spinning triangle. The inclination of drafting arrangement is with respect to the horizontal line of the machine. If the drafting arrangement is mounted with a relatively low inclination, the angle of the wrap of the fiber strand over curvature of the front bottom drafting roller is large; this will give a long spinning angle, with its associated advantages and disadvantages
Figure.5 – Inclination of drafting arrangement to vertical
With a steeper inclination and large angle (α2), the deflection angle £2 is small and the spinning triangle is short. The inclination of the drafting arrangement in modern ring spinning machines now lies between 45° and 60°, very often 45°. , 
The yarn run through the thread guide with an inclination giving a deflection angle of about 15º to 30º and a wrap angle (on modern machines of 0º to 50º). This variability arises in part from the up and down movement of the lappets, balloon control rings and ring rail. In addition, there is a very large difference in angle of wrap depending upon whether the yarn in the balloon extends from the guide towards the machine or away from the machine (to the left). The angles therefore never have the same size at any two points around the guide. The thread guides also exert a braking effect on pulsation of the balloon, which seldom rotates smoothly. It is usually required to absorb impacts and vibration arising from the traveller and from air turbulence. A large deflection damps these impacts and vibrations at the thread guide, so that they no longer penetrate fully to the spinning triangle.
Figure.7 - Inclination of stretch yarn to vertical
A smaller angle of wrap, therefore, implies more turns of twist in the spinning triangle and fewer end breaks, but also higher yarn tension at that weak point. The latter effect can partly neutralize the favorable effect of the higher twist level. Also, impacts and vibrations are better able to pass through to the spinning triangle. If the twist density is raised at the nip line, them the spinning triangle will also clearly become smaller with all the resulting advantageous and disadvantageous effects. 7. The Balloon Height: On the ring spinning machine, yarn take up capacity depends on, among other factors, the height of the tube and air turbulence formed by the yarn rotating with traveller speed. However, this height can only be varied within certain a tall balloon implies considerable tension differences between winding of the cop base and winding at the top. Also, a balloon in this from is unstable; it can collapse. The latter problem can be solved by use of a balloon control ring. However, since the yarn rubs on this ring-and the higher the balloon, the greater the degree of rubbing-use of control rings can lead to roughening of the yarn to a high hairiness value, to increased generation of fly and to melt spots (with synthetic fibers).,, 
5. Roller Overhang: The top front roller almost never lies vertically above the associated bottom roller known as Roller Overhang (fig. 6). Usually, the top roller is shifted about 2 to 4 mm forward. This gives somewhat smoother running, because the weighting force exerts stabilizing component acting in the running direction so that swinging of the top roller is avoided.
Figure.8 – Balloon Height
8. Other Dimensions in Spinning Geometry, :
• The lift Ik is about 20 mm shorter than the tube height Ik. • The distance from the top edge of the tube to the thread guide should be at least 2 dh +5 mm. • The basic setting of the length Ir (between the ring and the balloon control ring) can be slightly less than half the length IB. •The ratio (ring diameter)/ (tube height) =0.2-0.225. •The ratio [tube diameter (top edge)]/[interior ring diameter] = 0.45-0.5
In Ring Spinning, the Spinning Geometry plays a vital role regarding to the quality of yarn and performance of machine. Spinning geometry has a significant influence on spinning operation and the resulting yarn primarily on: Tension conditions, Binding-in of the fibers, Number of End Breakages, Yarn Hairiness, Yarn Irregularity, and Generation of Fly. Turn the spinning width, should be as close as possible to spinning triangle width to minimize high loss of fiber, minimize hairiness in the yarn. In Compact Ring Spinning system, the width of spinning triangle get reduces the integration of edge fibers in yarn cross section increases. The inclination of the drafting arrangement in modern ring spinning machine now lies between 45° to 60°, very often 45° to get optimum spinning triangle. Roller overhang must not be too large References: 1. Lawrence C. A., “Advances in Spinning Technology”, The Textile Institute, Manchester 2. Klein W., “Short Staple Spinning Series Vol. 4” “A Practical Guide to Ring Spinning” 3. www.rikipedia.com 4. C.D. Kane, S.G. Kulkarni , , J. R. Nagla, “Effect of ring frame parameters on blended yarn hairiness and other properties”. 5. Carl A. Lawrence , “Fundamentals of Spun Yarn Technology”, CRC Publications, 2003. 6. Eric Oxtoby, “Spun Yarn Technology”, Butterworth’s, 1987.
Figure.9– Spinning Geometry
7. NCUTE publications on Yarn Manufacturing, Indian Institute of Technology, Delhi. q
Nandan Denim reports PAT of Rs 15.50 crore, up 35% in Q1 of FY 2015-16
Nandan Denim Limited (NDL), India’s second largest integrated denim fabric manufacturer has reported a net profit of Rs. 15.50 crore for the first quarter of 2015-16 as against Rs 11.47 crore in the corresponding period in 2014-15, a rise of 35%. Net sales for Q1 of FY 2015-16 at Rs. 280.50 crore were higher by 6% over previous fiscal’s same quarter net sales of Rs. 263.68 crore. NDL reported healthy EBITDA and PAT margin in Q1 FY16 at 16.5% and 5.5% respectively. Company reported EBITDA of Rs. 46.23 crore during Q1 FY 201516 as compared to Rs. 41.13 crore in the corresponding period last year, rise of 12%. EPS for Q1 FY 16 stood at Rs.3.40 (Face value of Rs. 10 per share) Deepak Chiripal, CEO, Nandan Denim Limited said, “The Com-
pany is following its well defined charter of growth and we are pleased with the performance so far. A disciplined approach in line with the long term strategy would enable us to further cement our position in the industry. We are investing towards creation of machining and manpower competence to build a brand that would be synonymous with the consistent quality and timeliness of delivery.” During the quarter, the Company has reported 14% of revenues from export markets. As of now, it exports to 28 countries. The total expenditure on the proposed capacity expansion of Rs. 612 crore is progressing as per plan. The major CAPEX orders have already been finalised and civil activities are in full swing albeit slow due to monsoon. The company expects to commission complete facilities in the first quarter of 2017. q
Financial Highlights (Rs Crore) Par culars
Q1 FY 16
Net Proﬁt EBITDA Net Sales EPS (Rs)
15.50 46.23 280.50 3.40
Q1 FY 15 11.47 41.13 263.68 2.52
Growth (%) 35 12 6 35
POST MEET REPORT
Synergising Activities by TEXTILE FRIENDS Group
EXTILE VALUE CHAIN media had taken new initiative for channelizing positivity in the industry. Media had arranged a Meet with industry stalwarts on 31st July, 2015 for 2 hours at Kotak& Co Ltd. Office. Selected invitee got together for issue discussion. Whole concept and idea was given by Mr. Manish Daga from COTTON GURUTM along with Mr. Suresh Kotak whole meeting was executed and implemented to a fruitful business meet. We name of this group as “TEXTILE FRIENDS”, synergising Activities with activist mindset who wants to act, walk the talk, do something meaningful and fruitful for textile community. This is the informal group, without any backing from government or any company with the sole intension is to finding probable solutions for the textile industry. Vision for Group : Promote Micro and Macro level changes in industry. Mission for Group : Work on Micro/ Ground level let Macro ( Government/ Ministry ) level know what industry needed. Macro Level are Strategist, Micro Level are Activist. Invitees who made their presence are as follows: • Mr. Suresh Kotak , Chairman- Kotak& Co. Ltd. • Mr. Manish Daga, MD – COTTON GURU • Mr.ArvindSinha – President, TAI • Mr.Jhunjunwala- President, RSWM • Mr. Shiv Kanodia- Secretary – Bharat Merchant Chamber • Mr. Anil kumar – ED- SRTEPC • Mr.AvinashMaykekar – MD- Suvin Advisors • Mr.SharadTandon- MD- Stadon Consulting • Mr. Janak Soma- TAI Mr. Suresh Kotak acted as moderator of the meeting, as his knowledge and vision gave direction to work towards our goal. Discussion was healthy. Following points we derived during meeting :
China buying, if no china? Then nocontingency plan , no disaster management, no plan B. Many big corporate in spinning side, not doing good. How we sustain as industry ? What should we do? Everyone can’t get out of the industry, everyone can’t stop manufacturing, can’t stop growing, we need to find a way out… Solution: • Plan strategic cotton growing. • Check production in each segment of value chain and consumption pattern, understandWhat is surplus? What should we do with surplus? Export, domestic consumption? How we balance our textile economy. •China have similar model. Even if we adopt the same, we will win half race. • WEAVING INDUSTRY / POWER LOOM SECTOR : Weaving sector weakest link in textile chain, not due to lack of technologypurely due toscatter/ fragmented nature of industry, ownership is small, very fragmented, typical run by family own entrepreneurs, no proper working culture, no professional outlook, lack of good weaving capacity, everyone works on isolation, lack of vision/ unskilled owners, herd mentality, owner untrained, lack of technical expertise, lack of trust among them, big order cant execute. Entrepreneurs are Positive people. They keep trying, very dynamic, multiplying with importing looms. What is preventing Indian entrepreneurs in setting up huge weaving capacities like 3000 looms in one shade as is the trend in China and Indonesia. Perhaps thus is only list set. Large qty of yarn is being exported which means there is a market for fabrics. If this group can identify the reasons for large weaving capacities being put up than thus group can motivate large corporates for putting up Large weaving capacity which will reduce export of yarn and increase export of fabrics and made ups. Thus will be in line with Govt of India’s ‘Make in India’ initiative. Take ichalkaranji as incubation lab, as it is mushrooming in weav-
• SUSTAINABILITY IN INDUSTRY : Manish Daga stated that everyone talks sustainability, but there is no implementation. Good for others will do good for us, Either all of us will survive or none of us will. Textile has the longest supply chain. But in textile, no interest, knowledge, least concern what is happening in other value chain segment. Eg. Farmer are least concerned about ginner, Weavers are least concern with processor, brands/ garments are least concerned with raw material. Everyone wants sell but price oriented affects the quality to a large extent. Mills are in very bad shape, doing trial and error in supply sources. No testing in ginning, testing only in yarn & fabric segment. how you compete with world if your raw material is not of good quality? Spinning mill first make yarn then decide whom to sell.
ing capacity, making 40s count fabric, moving to airjet. Powerloom clusters like Malegaon, bhiwandi, ichalkarnji etc have difficult time with bankers, as they lack documents for guarantee, assurance. Some finance company can do finance, so as of now finance is not problem for SME. They are suffering from mental block. Eg. Airjet speed loom will not work in bhiwandi, as till now nobody using airjet, if more loom, can’t handle it. Big mills not ready to invest in looms but they invest in spindles. Strengthen weaving , we will strengthen india 30-40% . immediately start competing with many countries of the world, If want to compete with world or china, scale up your own thinking, Solution: Engaging with entrepreneurs in an informal level, tie up with association for implementing, bring synergy with association, discuss first one to one, remove their fear, mental block, understand genuine reason.
• BRAND : INDIA INCORPORATION Look at textile industry as one with holistic view not as miniscule view. Everyone has separated the segment with their own benefits. TUFS : 3 trillion money given. From which spinning of India has strengthen, but weaving, processing still under growth stage. Make Brand India, which we can sell internationally. brand cluster fabric.eg. Ichalkaranji cluster, bhiwandi cluster, makes same quality fabric etc. Brand is bonding, brand cotton, brand yarn, brand fabric, which have huge potential. Bonding to brand gives sustainability promise, it’s an instrument.
Solution : The Khattau mill is best example we can follow. They never relied on government strategy, to survive, they personally supervised powerloom sector and they became self-reliant, not dependent on anyone. If we take positive adoption similar to khatau, will do much more in refined form. Association, if handle the cluster with brand, long term bigger group can adopt the cluster. Last strategy on textiles was published by Government in 1995. Since last 20 years, no revision.
• INTERNATIONAL BUYER/ MARKET Defence camaflouge fabric have great indian fabric demand from Bangkok, Indonesia, Japan, middle east, Iran, many others. But there is no single dedicated unit who are making and capacity to produce bulk fabrics.Investment of 200 to 300 crore is required for project. Indian company not ready, need order confirmation
and then they invest. Buyers like US defence ready to pay machinery cost in advance, as buyers need quality standard. • If we open trade with Pakistan, india trade will increase 100 billion opportunity • Bangkok weavers have come, 1500/2000 looms, buy yarns Indonesia, japan, , price predecided terms of payment. More or less 3 to 5 % we will adjust. • Missing liable trading community, prices goes up, we always have excuses to get off, prices goes down, same option •Japanes,Korean, chinese, they are ready to large invest in india, Vietnam, Maynmar, • Chinese currency, yuan is a second strongest currency in world, china biggest business issue. • Netherland company tencart want to invest in india, but due to buracracy, no FDI coming to india. • Commerce minister has given NOC letter to Pakistan government, to export in Europe, Pakistan has 0% duty, whereas India has 9.6% duty. • Textile Policy made without consulting industry people. Policy maker do not know ground reality. Eg, TUFS policy, Excise duty,Inconsistency
• THE SOLUTION SUGGESTED WITH OVERALL DISCUSSION : •
Work collectively on sharing basis, share and grow.
Make Micro and Macro level initiative.
• Micro : Make a group and study tour all over india, understand pain points, give solution as a industry. Need to explore clusters of india and understand. Association need to take responsibility of implementation of plan suggested by industry. Show the Vision to cluster and implement it. •
Make Brand for Cluster. Cluster have own brand identity.
Over a long run, big corporate can adopt this clusters.
• As a macro level, we suggest government officials what is required by Indian textile indstury. • Sector consolidation and Strategy consolidation goes hand in hand.
• THE FIRST INITIATIVE OF GROUP ALREADY PLANNED , INITIATIVE IS :
Planned visit to Ichalkaranji on 5th September, 2015 to understand their problems and show the Vision for brand cluster/ brand india. q
The man of knowledge must be able not only to love his enemies but also to hate his friends. -Friedrich Nietzsche
POST EVENT REPORT MEDICAL TEXTILE : Applications & Opportunities
ne day symposium held on Medical textile by ITTA ON 14th July, 2015 at MCA Banquets, Mumbai CricketAssociation (MCA),Bandra-Kurla Complex (BKC),Mumbai. The symposium was inaugurated by Chief Guest – Smt. Kiran Soni Gupta, Textile Commissioner and by Guest of Honour - Dr. Snehalata Deshmukh, Former Vice Chancellor, Mumbai University. the Textile Commissioner spoke in details the various schemes initiated by the Ministry of Textiles, Govt. of India for promotion of the technical textiles, appreciated the efforts taken by ITTA in organizing the symposium jointly with SITRA-COE on Medical Textiles and suggested that such seminars should be organize in other major cities in India as well. 1st Session : Users’ Perspective, Needs and Standards The first technical session was chaired by Dr. Narendra Mehta, Senior Surgeon, Lilavati Hospital, Mumbai. Four papers were presented• Recent Trends In Medical Textiles by Dr J. T. Vyas, General Surgery, Nanavati Hospital • Market Overview Of Medical Textile In India, S. Sundara Moorthy, Head – Healthcare Consulting Division, BDB India • Medical Textile Standards Developed By SITRA, Sakthivel Perumalsamy, Head-COE,SITRA, Coimbatore 2nd session : Artificial Implants Dr. Hemant Bhansali, Mumbai chaired the second technical session and three papers were presented• Recent Developments In Hernia Mesh, by Dr. A. Ramamoorthy, A. R. Surgery, Coimbatore • Development Of An Indigenous Gel Sealed Large Diameter Vascular Graft From Pet Textiles, Dr. Roy Joseph, Scientist E, SCTIMST, Trivandrum • SITRA’s Research In Medical Textiles, Sakthivel Perumalsamy, Head-COE,SITRA, Coimbatore 3rd session - Advanced Wound Care The third technical session was chaired by Dr. Sharad Seth, Mumbai and FOUR papers were presented•
Why Single-Use Medical Nonwovens?, by Sudisha Bhola,
Ahlstrom Group, Delhi • Polyester Fibers For Medical Applications, Tarun Jagga & R. K. Ragha, Reliance Inds. Ltd., Mumbai • Ultra-Fresh -An Extra Level Of Protection, Barrie Clemo, Thomson Research Associates, Canada • Efficacy Of Non Woven In Infection Control, Cdr. Manoj Kumar, Hitex Healthcare, Mumbai Session 4 : Infection Control using specialty barrier fabrics The fourth technical session was chaired by Dr. J T Vyas, General Surgery, Nanavati Hospital, Mumbai. and three papers were presented• Functionality In Textiles: A Perspective On Healthcare Protection, Raj Varghese, Archroma, Mumbai • Innovative Bandages And Antimicrobial Woven Fabrics, Paresh Patel, CEO, Surgicotfab Textiles, Ahmedabad • Wearable Physiological Monitoring System, Dr. K. Mohanvelu, Defence Research & Development Organization, Bangalore PANNEL DISCUSSION The Panel discussion was moderated by Mr. Mahesh Kudav, Board Member of ITTA and the panelists were Mr. Ajay Sahani from Fibretex Personal care, New Delhi and Mr. Pranay Shahu from Advance Technical Textiles, Welspun, Mumbai. They took number of questions from the audience and the discussion was very lively. The panel deliberated mainly on the opportunities and challenges on the Medical Textile industry. It was concluded that this industry is rising very rapidly, more and more hospitality industry should make use of these materials in one hand and on the other hand, medical textile manufacturers should focus on development of new products, import substitution, etc. Dr. K. S. Sundaraman, Vice Chairman ITTA is summing up the Symposium proceedings. The Medical Textile Symposium received overwhelming response from the health care and technical textile industry and more than 120 delegates attended the symposium. q
POST EVENT REPORT Trident bed linen launched at HGH India 2015
he fourth edition of HGH India 2015, the trade show exhibiting wide variety of home products like home textiles, home décor, gifts and houseware for the Indian market, had a active first day that saw two major launches – one by the Trident Group and another by celebrity Chef Sanjeev Kapoor. The show had a great start with trade buyers queuing up at the visitor registration desk as early as 8.30 am, at the Bombay Exhibition Centre, Goregoan, Mumbai. Hundreds of new designs and products with innovative features were unveiled by over 400 brands, manufacturers, importers, distributors& suppliers from 28 countries. Trade buyers got to witness several high-powered product launches, trade schemes and new campaigns.Participation of international brands like Zwiesel glassware from Germany, Spanish brand Juypal storage and cleaning range has further increased, more than 25 exhibotors from China have their debut in HGH, and so on. Jagdish Khandelwal, president of the recently formed Home Textiles Association put it in a nutshell: „Superb show. Even better than last year.“ Trident - The Affair to Remember Trident Limited, a leading player in home products and world market leader in terry towels, has just introduced a new collection of bed and bath linen with contemporary designs, innovative constructions and luxurious fibres, all exhibited for the first time in a trade show at HGH India. At the first show day Trident launched the new Bath & Home Linen Collection campaign “The affair to remember”. Unveiling the fresh and dynamic visuals of the campaign was the new face of the Trident group, beautiful actress Kriti Sanon along with Trident Group Chairman Rajinder Gupta and CEO Marketing Rajneesh Bhatia.
hygiene is increasing. With our new campaign and new products we are trying to address this need of the customer and HGH India was the best platform for this.”
The show was inaugurated by the chief guest, Ms Kiran Soni Gupta, Textile Commissioner, Ministry of Textiles, Government of India. Dignitaries present on the occasion included Kuldeep Wattal, Chairman-CEPC, Rajinder Gupta, Chairman Trident, Gurvinder Singh, MD GM Fabrics, Rajnish Arora and Nimish Arora, MD Dicitex Furnishings. Kiran Soni Gupta said: “HGH India has developed tremendously. Compared to the last issues, which I have followed personally, the trade show has become a landmark event for the textile and home products industries. It will help our industries to grow not only in quantity, but also in quality.”
Speaking on the occasion, Rajinder Gupta said: “India is an emerging market for home textiles and awareness on health and
On 15 July 2015, the second day of the event, HGH India facilitates a networking diner at the fairground organised by the recently formed Home Textile Association, which is giving the home textile industry an own identity as social, political and business platform. q
YARN FABRIC AND ACCESSORIES TRADE SHOW 2015 Launches in December in India
their capabilities, expertise and achievements, and provide an avenue to forge strategic alliances with potential clients or partners in India and overseas.
The first ever `TRINITY SHOW` of international stature, Yarn Fabric and Accessories Trade Show 2015 (YFA Trade Show 2015), with a specific focus on the textile and apparel industry, has been planned by Vision Communications, the publishers of monthly magazine Attire World and annual directory of trims and embellishments Accessories Guide, and has been scheduled to take place from 14th Dec,2015 to 17th Dec,2015, at NSIC Exhibition Centre Okhla, New Delhi (India). YFA Trade Show 2015 is being organized with the objective of helping meet the needs of the fast- growing textile and apparel industry and a rapidly evolving and expanding yarn and fabric market, in asian sub continent and enabling stakeholders in the entire textile and apparel industry in converging on a single platform for networking, exchange of ideas, sharing of current experiences, showcase latest innovations, products and developing a vision for the future. YFA Trade Show proposes to enhance the visibility of players related to the fiber, yarn, fabric and accessories industry, highlight
The trade visitors to YFA Trade Show 2015 will comprise decision makers & merchandising personnel from apparel manufacturers, exporters, buying houses, retail chains, apparel brands, wholesalers, composite mills, powerloom weavers, knitters, garment exporters & manufacturers, buying Houses & buying Agents, local and international retail chains, apparel brands & fashion labels, senior management of large retailers, purchasing/procurement heads, brand owners of lingerie, apparel domestic manufacturers, importers, distributors & wholesalers, fashion designers & merchandisers, design studios & institutes, trade body representatives and trade media. YFA Show being restricted strictly for “Trade Only” provides a professional and conducive environment for networking and doing business. YFA Show 2015 will be the first ever event in south east asia for sourcing of Fiber, Yarn, Fabric and Accessories under one roof. The nature of the visiting parties to this prestigious event represents not only some of the biggest brands but local names too. It is a considerable mix of national and international visitors with many of the participants holding important positions and substantial decision-making power. q
by Mr. SHIV KANODIA Ex- Honorary General Secretary, Bharat Merchants’ Chamber Ex-member of International Business Committee, IMC Ex- DRUCC Member Western Railway, Mumbai Division Ex-Committee member Forum of Affiliated Association, IMC
TEXTILE POLICY Need to review six decades old SOP for formulating Textile Policy. The frantic efforts by China to arrest the steady decline in their exports is indicative of tough times ahead. Chinese foresight & their corrective steps in advance should inspire our policy makers to engage at ground levels and take serious notes, well in advance. The ambiguous & vague policies, without consultation with actual stakeholders have done more harm to Indian Textile trade & Industry. The present government too, is still following the primitive consultative & policy making systems, setup 6 decades ago. The stakeholders in each industry should be well defined, and due representation each segment of that industry should be given. Taking into confidence each segment will help in policies which leads India to inclusive & sustainable growth. India’s largest employment sector TEXTILES, comprises of farming, ginning, spinning, weaving, processing, garmenting, value additions etc. The inherent strength of this sector could withstand years of neglect and faulty policies. The Central Excise wide its Notification no. 34/2015 – Central Excise dt. 17.7.2015 got the entire Indian textile Industry to a standstill. The issue was resolved on 23rd July with another clarification notification by excise department. This is a classic example of inconsistent, vague & ambiguous policies, without consulting stake holders, which dwarfs the growth of Textile Industry in India. COMMODITY PRICES Downward pressure on prices of all commodities including crude, cotton, coal, metal, etc., has lead to nervousness across all levels of trade & Industry, both nationally and internationally. Sustaining in international market requires collective tackling of each sector of Textile industry. A common unbiased platform is the need of the hour and TEXTILE FRIENDS is a step in right direction. GST Non functioning of Parliament may lead to further delays in implementation of GST. The International and Indian Industry & Trade
Fabric Market view by Mr. Surendra Savai • Trend of Fabric has changed over last decade in MuljiJetha Market, which is considered to be largest market for wholesale fabrics. Wholesale market turned to retail market as 60-70% selling as retailer. Only 10-20% of good traders aredoing fairly well in wholesale business. • Men’s suiting / shirting material traders prefer imported fabrics from China, Malaysia rather than take from Indian manufacturer. Indian mill fabric not have good demand in market, imported fabric have more margin, mill fabric manufacturer directly dealing with consumer rather than depending on middle chain ( traders / wholesaler) • Ladies fabrics manufacturer from India doing well. Conversion fabric selling more than normal plain fabric. Conversion can be embroidery on the fabrics, print on the fabrics, pin tucks, etc. those who follow “Old school of thought” fabric manufacturer and distributors need to change their strategy to survive in the industry.
associations are eagerly awaiting GST, as this is a pre-requisite for ‘Make in India’. The various Tax windows opened over last several decades needs to be reduced in lines with developed countries of the world. Multi window taxation leads to corruption at various levels. MNC’s are afraid of this due to tough laws in their own countries for acts of corruption, done by their people in India. LBT The trade/industrial associations are disappointed with the partial withdrawal of LBT in Maharashtra, which is against the written poll promise dated 12th February 2014 by Hon’ble CM. With the notification no. 47/2015 dated 23.7.2015, the Maharashtra Government has kept this additional tax window open, which is prone to misuse, harassment & corruption. It is pertinent to note that the industry & trade is not against contributing to the tax kitty of our nation, but they want minimum inspector raj, least compliances and zero revenue leakages for the exchequers. FIBRE NEUTRALITY, DUTIES & INDIRECT TRADE BARRIERS have lead India to become uncompetitive world over in polyester and viscose industry. The Indian textile could not grow in all sectors due to these disparities, protectionism & license raj. The monopolies & cartels created are slow poison for the Indian textile Industry and will spell doom for those enjoying it too. The unprecedented growth of technical textiles & high value textiles by other countries at the cost of India is very alarming. We need to review our policies both in short term as well as long term and also at micro and macro level. MARKET REPORT Currently textile production at most major centers viz. Bhiwandi, Malegaon, Surat, Ahemdabad, Bhilwara, Coimbatore, Ichalkaranji etc. is on an average at 50%. The spinners & weavers are making losses on stocks due to continued reduction in prices of cotton and manmade fibers. Frantic efforts by local MLA’s, MP’s of these constituencies are leading to no respite. MP, Kapil Patil of Bhiwandi is addressing weavers of textile town of Bhiwandi this week too. q
• Retail of garment selling dynamics changed drastically, now retail or fabric selling not confined to malls, wholesale, retail market or online, but now many ladies selling garments, ready to stich fabrics at home and selling on social medias, online, local exhibition etc. • e- retailing : textiles % very low, other category are majorly dominated in e-tailing , day by day it will increase. Major reason for etailing growing on fast pace is costly transportation, time consuming, parking problem, hotel charges, etc. People are frustrated with all trauma they want to face while going shopping on mall or retail shop. Better they want to invest time for some fruitful activity. Etailing users are actual consumer who is using the products. • Middle man , distributors, agents for textile industry not using as of now, in future in b2balso will start soon. • Online retailing will be good for small traders & international client who can purchase mill fabrics from online mill store. • Fibres composition is not very important for final consumer, they don’t really blend %. q
Mr. Manish Daga Textile Technologiest
INDIA Weather and Sowing Indian Council of Agricultural Research (ICAR) has opined that the pattern of rainfall and sowing area coverage is almost similar to that of 2013-14, which was a bumper crop year. The threat of drought is currently confined mainly to the contiguous stretch cov-
ering parts of central Maharashtra, north Karnataka and Telangana. Cotton production in the Northern state of Haryana can fall by 30 % this year due to an attack by whiteflies. Whitefly is a pest that harms cotton crop in two ways – rendering plants weaker by sucking sap from its leaves and acting as carrier for Cotton Leaf Curl Virus (CLCuV), another organism that causes damages the crop. There are forecast of rain slow down after mid August. Last year total sowing was about 12.9 million hectares and as on 30.07.2015, cotton sowing has been completed in about 10.3 million hectares.
Sowing: (as on date 30.07.2015) State wise Sowing
2014-15 (Lac hectares)
2015-16 (Lac hectares)
China is importing less cotton. India’s cotton export to China was 6.1 million bales in the last season. It is 2.6 million bales in 201415 season, a fall of over 56%. The Textile Minister estimates exports at 7.1 million bales in the 12 months ending September from 11.79 million bales a year earlier. The trade circle feels that India’s exports will probably drop to 5.5 million bales which would be the lowest since 2008-2009. Over 5 million bales have been shipped so far this season. The shippers from India to U.S and Australia are battling for market share in countries such as Bangladesh and Vietnam. Prices in New York slumped to a 5-year low in January amid global oversupply. Cotton stockpiles in India are poised to jump to a record as exports plunge and a revival in monsoon rains boost crop prospects. The Cotton Association of India estimates that inventories will surge 25 % to 7.39 million bales by October from 5.89 million a year earlier. CCI and private trade are keen to dispose their stock. CCI has no options but to reduce price to make its stock attractive and lower its inventory as it foresees another year of MSP buying as monsoon revives. The silver lining for India is the rising demand from domestic textile mills. Consumption may increase 5 % in 2015-16 from about 32 million bales this year.
Domestic Market Summary: Domestic market at present is bearish. Unless there is export demand prices will not be able to increase. They will settle at the MSP level. No ginner/ trader/ Mill will want to stock cotton.CCI will be compelled to buy cotton if this price trend continues.
Yarn : Spun yarn imports from India have rebounded in the month of June in China. The sudden rise in yarn exports can be attributed to relatively higher domestic prices in China compared to imported cotton. China, Bangladesh and Egypt are the 3 top importers accounting for more than half of spun yarn exported from India in June. Domestic yarn market is not doing so well as a result of recurring problems in weaving and processing sectors. Mills focused on domestic trade are stuck up with a lot of inventory. Some of them have adopted the policy of closing down the production during the weekends.
Forthcoming Events 1. Asia Cotton Outlook, Vietnam, Aug 25-27, 2015 The cotton industry is one of the oldest industries in the world that has continued to thrive and flourish throughout the years with Asia especially China and Bangladesh playing a crucial role in driving demand. Located on the Indochina Peninsula in Southeast Asia, Vietnam has one of the fastest-growing economies in Asia. Vietnam’s textile and garment sector has seen a steady and sustainable rise over the past years, and with more than 3,800 companies; it is the leading export sector. Similarly; the Government of Vietnam is actively seeking to grow cotton farming by allocating around 13600 kg of cotton seeds to assist the cotton project in seven provinces. Also; as a member of The Association of Southeast Asian Nations (ASEAN) and Trans-Pacific Partnership (TPP), Vietnam stands to benefit greatly from the free trade agreement (FTA), making it a perfect location for cotton trade and investment We would like to welcome the global cotton industry to Ho Chi Minh, Vietnam for the IBC’s Asia Cotton Outlook Summit 2015. This Inaugural conference will identify global trends, regional demandsupply patterns and price outlook for the cotton industry while focusing on technological updates and business opportunities across the cotton value chain Vietnam Cotton & Spinning Association-VCOSA is delighted to support this conference, which will bring together top industry players, government decision makers and local industry bodies on a single platform to discuss strategies and solutions for the cotton market The conference is your one stop solution for trade, policy and investment outlook and a fantastic opportunity to grow your global network and built business relationships
cotton belt. Moreover, global weakness in cotton and yarn prices is also pressuring the cotton prices. Some of the textile and all its affiliated sectors have reportedly started to close down. Besides the imposition of withholding tax and high costs of inputs, the textile industry leaders are complaining that the resultant high cost of doing business is making them non-competitive.
Important Reports: COTTON GURU ’s China Report : Our MD, COTTON GURU Mr. Manish Daga recently visited Hangzhou, China as a SPEAKER during the China Cotton Forum 2015 on the topic “Sustainability of the cotton supply value chain” (Either all of us will survive, or none will) China is seeking to reduce its own record stockpiles. This might cut imports next season to as low as 5 million bales, which would be the smallest since 2003.China’s imports in the first half of the year slumped 33 % to 933,853 metric tons, customs data shows. Only a small portion of the cotton offered at the state auctions this year was sold. Silver Cotton Information Center learned from interviews with many textile companies that some textile companies think the quality of cotton reserves has been degrading so much that they can no longer meet the buyers’ needs. Some other textile companies noted that they might purchase cotton reserves if there is an undersupply situation on the spot market. Until recently, China was the perfect model of cheap mass manufacturing. Textile production in China is becoming increasingly unprofitable after years of rising wages, higher energy bills and mounting logistical costs, as well as new the government restriction on the import of cotton. According to the Boston Consulting Group, manufacturing wages adjusted for productivity have almost tripled in China over the last decade, to an estimated $12.47 an hour last year from $4.35 an hour in 2004.Rising costs in China are causing a shift of some types of manufacturing to lower-cost countries like India , Vietnam, Bangladesh, Pakistan and even the USA. The Chinese economy presently seems to be heading towards further decline mainly due to sharp decline in industrial profits in recent months. Chinese shares prices fell to deep depth when they suffered their biggest one day fall in 8 years in the last fortnight. Being the second largest economy of the world, economic trouble in China will have a significant impact on the revival of the global economy. Some of the key observations:
It is with great pleasure that we invite you to the Asia Cotton Outlook in Vietnam and we look forward to meeting you on the day
• Cotton has no price advantage for stake holders.
• Supply and demand of cotton and yarn is distorted under the intervention of policy.
NYBOT is falling. The critical question is whether it will break the level of 60 and go lower. Situation in China is not good. Few countries consuming cotton like Turkey have witnessed currency devaluation making it difficult for them to import. Just now there are dark grey clouds everywhere as world cotton consumption is not seen rising with Crude in free fall and prices of synthetic yarn going down. US: Cotton prices crumbled last week as more fears emerged that China, the world’s largest purchaser of cotton, may continue having problems with its economy. The weather forecast for the southern U.S. is dry, which is good news for the developing cotton crop. Pakistan: New crop arrivals have begun. Raw cotton prices remain under pressure due to fear of rain damage which may produce water-laden lint due to the continuing rainfall in several parts of the
• Quality is vital to the survival of cotton enterprises.
• Cotton mills are advised to leverage risk by innovation, research, technology, hedging and optimization of resources. • Government’s “One Belt One Road” strategy is expected to fuel robust development of cotton textile industry in Xinjiang. • The import policy of sliding duty was confusing and tricky, especially for the SME’s. • Record breaking increase in monthly import of cotton yarn in June 2015.Jan-Jun year on year yarn imports up by nearly 20 %. • Many Chinese mills have stopped spinning coarse cotton counts between 8 to 25 s. • China will continue to import a good volume of cotton yarn in 2015.
USDA: For 2015/16, world production, beginning stocks, and trade are raised slightly. Consumption is down and ending stocks are higher. The U.S. forecast shows higher exports and lower use and ending stocks. The U.S. season-average farm price is projected at 62 cents per pound, up 2 cents. For 2014/15, world production, beginning stocks, and trade are raised slightly. Consumption is down and ending stocks are higher. The U.S. forecast for 2014/15 shows higher exports and lower use and ending stocks. The forecast for the U.S. season-average farm price is unchanged at 60.5 cents per pound.
ICAC: Large Cotton Stocks Likely to Persist in 2015/16 In 2014/15, world ending stocks are estimated to have risen by 9% to 22 million tons, reflecting a stock-to use ratio of 90%. From 2010/11 through the end of 2014/15, the world has accumulated 13.4 million tons of stock due to production exceeding consumption. In 2015/16, stocks are projected to decrease 5% to just under 21 million tons, reducing the excess volume by around 1 million tons. After increasing 16% to 9.4 million tons in 2014/15, stocks held outside of China are expected to decrease by 4%, to 9 million tons, by the end of 2015/16. Much of the world’s excess stock is held by the Chinese government from purchases made by the China National Cotton Reserve Corporation under its stockpiling policy from 2011-2014. The Reserve made its final purchases of the 2013/14 crop in March 2014 with sales continuing through August 2014, ending with an accumulated volume of around 11.3 million tons. On July 10, the Chinese government started to sell its stockpiles at prices close to the current domestic market price in the hopes of maintaining market stability. The cumulative volume of cotton sold through the end of July is around 40,000 tons. India’s ending stocks are estimated at 2.2 million tons in 2014/15, which is the second largest volume of stocks. Part of the increased volume is held by the Indian government, which procured stocks under its minimum price support program. Government purchases in 2014/15 are estimated at around 1.5 million tons, and sales through the end of July at around 650,000 tons. However, exports from India have fallen by 51% to 980,000 tons, also contributing to the buildup of stocks. Stocks in 2015/16 are projected to decrease as consumption overtakes production for the first time in five seasons. World production in 2015/16 is forecast down 9% to 23.8 million tons. Output is expected to fall from 2% to 16% in the five largest producing countries. Rising costs of production and a decreased subsidy in China are likely to lead to a 16% drop in production to 5.4 million tons. India’s production is forecast down just 2% to 6.4 million tons due to improved yields from better monsoon weather this season and low prices for competing crops reducing the loss of cotton area. World consumption is projected to rise by 2% to 24.9 million tons in 2015/16. China’s consumption is forecast to remain stable at around 7.7 million tons. However, mill use is expected to grow in the next four largest consuming countries.
8.7 million bales to provide price support to the farmers, but has not been able to sell the stocks. The pace at which the commodity is getting disposed, a sizable quantity is likely to remain unsold at the end of the season. The CAI states that the country needs to learn a lesson from the mistakes China made and dispose of the cotton lying with CCI quickly, to avoid getting into a China-like situation.
Government Reports: • The cabinet approved the expenditure of INR 181 billion (USD 2.8 billion) for 2015 - 16 to enable the subvention scheme on short term crop loans at INR 0.3 million each to farmers. • The Director General of Foreign Trade (DGFT) has extended duty benefits to 63 more handicraft items under the Merchandise Exports from India Scheme (MEIS).
Technical Reports: 1.ICE COTTON Areas closer to 62 continue to offer good support in Cotton Ice Futures. Short term uptrend in cotton remains intact till ICE futures hold above 62. Bulls would be comfortable buying dips here with stop below 62 for targets of 72-74. Though in uptrend rally is yet to pick up steam. 72-74 areas would be key hurdle for Bulls to overcome. Below 62 areas, weakness can creep in again in short term. 57 nowremains a key medium to long term bottom. Key Supports 63.31-62.20-59.83-57.30, Key Resistances 67.50-70.30-71.50-73.80. 2.MCX COTTON MCX Cotton is lot more volatile and choppy as compared to ICE Cotton. Short to medium term targets of 18000-18200 maintained till it holds above 15170 now. Upside momentum in MCX Cotton expected above 16300 levels. Traders are advised to accumulate gradually all dips to 15170 levels. 13970 remains a key medium to long term bottom.
World cotton trade is expected to remain stable at 7.7 million tons in 2015/16. In 2015, the Chinese government limited import quota to the volume required under WTO rules of 894,000 tons, in part to spur demand for domestic cotton and Reserve sales. Given the large volume of stocks within China, it will likely maintain the restricted import volumes through 2016, and China’s imports could fall 10% to 1.6 million tons in 2015/16. Imports outside of China are forecast to increase by 4% to 6.1 million tons.
Key Supports 15170-14360-13970,
Cotton Association of India (CAI):
Key Resistances 16580-16900-17250-18200. q
The Cotton Association of India (CAI) has retained the estimate of the crop at 38.27 million bales in 2014-15 marketing year (October-September). The association said the CCI has procured about
SHOW CALENDAR December 2015
August 2015 25-27
Asia Cotton Outlook, Place: Vietnam September 2015
ITMACH BHIWANDI - 2015 Place : Bhiwandi / Thane, info : www.itmach.com January 2016
UDYOG 2016 Place : Surat/ Gujarat , info : www.udyog.sgcci.in
Feb 2016 TEMTECH Place: Bhilwara/ Rajasthan, info: www.temtech.in
Dhaka International Yarn & Fabric Show Place : Dhaka, Bangladesh, info: www.cems-yarnandfabric.com/difs/
Yarnex / Texindia Place : Tirupur/ Tamilnadu, info: www.yarnex.in , www.texindiafair.com
Premier Vision Show Place : Paris, info: www.premiervision.com
F & A show Place : Banglore/ India, info: www.fnashow.in
OUTLOOK 2015 Place : Athens, Greece, info : www.edana.org
Colombo International Yarn & Fabric Show Place : Colombo/ Sri Lanka, info: http://www.cems-yarnandfabric.com/cifs/
TECHTEXIL, INDIA Place : Mumbai, India; info : http://techtextil-india.in.messefrankfurt. com/
INDIATEX Place : Mumbai/ India, info: www.textileassociationindia.com
October 2015 9-10
The Textile Machinery Expo 2015 Place : Gandhinagar/ Ahmadabad, info : www.textilemachineryexpo.com
May-2 june Hometex 2016 Place : Banglore/ India, info: www.homtex.in
International Textile Fair Place : Dubai/ UAE, info: www.internationaltextilefair.com
NONWOVEN TECH ASIA Place : Mumbai/India, info: www.nonwoventechasia.com
November 2015 5-6
Nonwovens Innovation Academy Place : Leeds, UK ; info: www.edana.org
Turkish Nonwovens Symposium Place : Istanbul, info: www.edana.org
ITMA 2015 Place : Milan/ Italy, info: www.itma.com
Intex South Asia 2015 Place : Colombo/ Sri Lanka, info: www.intexfair.com
July 2016 26-28
Fashion Connect Place : Banglore/ India, info: www.fashionconnect.co.in October 2016
ITMA ASIA + CITME 2016 Place : Shanghai/ China, info : www.itmaasia.com December 2016
INDIA ITME 2016 Place: Mumbai/ India, info: www.india-itme.com
POST EVENT REPORT LIVA TO BUILD ON ITS CONSUMER SUCCESS
This year March marked yet another milestone for Birla Cellulose with launch of ‘LIVA’. LIVA has tremendous potential to revolutionize the way we think about fashion in textiles. Liva is expected to bring its key role in producing excellent fabric to the fore fabrics, in line with the consumer tastes and demands. It is an attempt to reach out to the end consumer with an innovative and quality offering, keeping a focus on the entire value chain involved to deliver. In SS15, LIVA tagged garments were available with major retail brands, spread across 84 cities in India with visual Merchandise in 500 stores to enhance the consumer experience. The success of LIVA is evident by the fact that consumers have looked for the Liva tag in garments and experienced the natural, fluid, fashion in large numbers. After the grand launch of LIVA, Birla Cellulose, a global leader in MMCF, has once again taken initiative to provide a platform to facilitate networking of leading domestic brands, Liva Accredited Partner Forum (LAPF) members & the who’s who of the Rajasthan garment industry to assure quality focussed offerings to the end consumer. Taking this forward, Liva, recently hosted the LIVA Partner Conclave 2015 at Radisson Blu, Jaipur on 7th August 2015. This conclave also saw its collaboration with the Garment Exporters Association of Rajasthan. The focus was on Liva SS16 collection specially highlighting Indo-Western and ethnic garments. This collection had a high ting of innovation in line with consumer trends forecasted by International Design Consultants. Liva has been a vital ingredient in the entire gamut of fashion wear - Western, Skirts, Kurtis, Palazzos etc. Mr. Manohar Samuel, President, Marketing & Business Development, Birla Cellulose addressed the audience and stressed the importance of this event. He said “We are pleased to associate with the Garment Exporters Association of Rajasthan for the LIVA Partner Conclave 2015. Our vision of taking brand LIVA to the consumer along with our Brand associates and the LIVA Accredited Partner Forum Members has now reached greater heights with the inclu-
sion of leading Garmenters of the Garment Exporters Association of Rajasthan”. Reputed domestic apparel brands attended the LIVA Partner Leading Domes c Brands Who a ended West side Max Retail Pantaloon Big Bazaar
Lifestyle Shoppers Stop Ethnicity Aditya Birla On-line Fashion
Global Desi / AND People - Madura Garment BIBA W-TCNS
Madame Crimsoume Club Fab India Reliance Trends
Conclave where they interacted with Leading Garmenters & Liva Accredited Partner Forum members. Birla Cellulose also launched a unique concept called “Liva Accredited Partner Forum” - (LAPF), of aggregated partners in March 2015 which saw a continuation in this meet. LAPF is a community of Spinners, Fabricators, & Processors who work closely with Birla LIVA Accredited Partner Forum Membe rs who a ended SSM Processing , Erode Chandhok Tex les Enterprises , Delhi Swan Energy , Ahmedabad Krishna Dyeing & Prin ng Mills , Surat Svarn Tex Prints, Delhi
The Ruby Mills Ltd., Mumbai Mafatlal Industries, Nadiad Gokul Tex Print , Surat Nahar Industrial Enterprises Ltd, Ludhiana VSM Weaves India Limited, Erode
Ujjawal Tex les, Surat Pee Vee tex les Ltd, Hinghanghat Sree Thangam Weaving Mills, Erode Jayavinayaga & Co , Erode Rajkrishna weaves, Erode
Cellulose on innovation, quality & technology to deliver Liva fabrics to consumers. Co-branding opportunities As part of the strategic programme, partners in the LAPF will use LIVA and LAPF logos on the packaging and promotional materials which aim to improve visibility and convey assurance of quality across the value chain. At the retail end, each piece of garment will have the distinguished LIVA tag that assures consumers of all that the LIVA brand stands for. Finally, there is huge potential for Indian traditional clothing first in domestic and with the Indian Diaspora which Birla Cellulose foresees. The company feels they need to get aggressive in-terms of marketing ethnic wear. With LIVA they believe they have the right tool to reach places. q
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