INDIAN TEXTILE INDUSTRY A BRIEF PROFILE

Overview:
It is obvious to every person engaged in the textile business that the
Textile Industry occupies a unique place in the economy of the country by
virtue of its contribution to the industry output, employment generation and
foreign exchange earning. It commands respect as largest employer, next to
Agriculture, providing employment to about 35.00 million people, directly. It
accounts for 14% of industrial production and 16% of export. The industry has
witnessed a phenomenal growth during the last two decades.

The emergence of powerloom was transformed art of the handloom

fabric into a modern industry. The powerloom industry in the decentralized
sector of the Indian textiles developed in most of the handloom clusters as
well as textiles mills centers particularly due to the slowing down mode of the
demand of handloom fabric other than having artistic work as the same was
costlier than the fabric made by the mills sector. The technical staff and skilled
weavers of the mills had lost the job due to closure of mills had started their
own weaving factory by using the looms discarded from the mills.

The growth of the decentralized powerloom sector was also encouraged

by the experiences and success story of M/s Reliance Industry, Ahmedabad,
which had installed powerlooms, discarded by M/s Mafatlal Industries Ltd.,
Nadiad in the year 1966 at Naroda Village of Ahmedabad (Gujarat). This is
also known as a turning point in the history of Indian textile industry.

Thus existing handloom clusters had been converted slowly into

powerloom clusters during late 70s to 90s decade of twentieth century. The
strength of these powerloom clusters had been developed between1985
to1995 as most of the looms and technical personnel in these mills had shifted
to decentralized powerloom industry and started to fulfill the demand and

1
requirement of the fabric on very cheaper rate in comparison to the mills
sector of the Indian textile industry.
Structural Profile:
The 19.26 lakh looms in the decentralized powerloom sector are spread
over 4.3lakh units with an average holding of a little over 4 looms per unit.
Thus, the sector largely comprises of very tiny units with a majority of loom
holdings in the range of 1 to 8.

The respective share of the handloom, powerloom, hosiery / knitting,

and mill sectors in the national cloth production in 2004-05 was 12.61%,
62.42%, 20.08% & 3.36% respectively, with the khadi, wool and silk sectors
cumulatively accounting for the reminiscent share of 2% while the total cloth
production rose from 34,838 million. Sq.Mtr. in 1996-97 terminal year of the
VIIIth Five Year Plan) to 49008 million. Sq.Mtr. in 2005-06, production of cloth
in the organized mill sector during the corresponding period declined from
1,957 to1561 million. Sq.Mtr. During the same period, production of cloth in
the powerloom sector rose from 19,352 to 30254 million. Sq.Mtr.

While the powerloom sector is the single largest fabric manufacturing

sector in the country, producing a wide range of products from low value
coarse and gauze cloth to high value shirting, suiting and made-ups, and
average unit is extremely limited in its product range, often producing one or
two grey or yarn dyed products. A significant number of units undertaken only
job work from a set of traders or merchant exporters, generally known as
master-weavers, who provide the requisite yarn and take back the fabrics on a
fixed rate of wages per meter of fabric produced. Since the master-weavers
emphasis is on meter-age and there is no incentive for rate of production of
better quality, the weavers find it economically unviable to go in for
modernization or to lay emphasis on quality control. This is a major deterrent
to technology up-gradation in the sector.
Cluster Profile
Umargaon (District Valsad) is situated on the western railways at the
border of Gujarat State adjoining to Maharastra, about 140 kms from Mumbai,
2
28 kms from Vapi, 120 kms from Surat and 350 kms from Ahmedabad. The
GIDC, Umargaon was established in 1983 as green field industry area /
pollution free industrial area and at the out set a few textile units with plain
looms were established. The area was developed for textile industry due to
some inherent advantage like close proximity to Mumbai city, coastal belt
providing high humidity required for the textile weaving industry, less
population, low cost of land and adequate infrastructure etc.

The textile entrepreneurs are mainly from Mumbai and closely

associated with the Mumbai market for their business. The skilled and semi-
skilled laborers are easily available in the area and working on monthly
wages. The raw material is easily available due to its close proximity with
Mumbai and Surat city and direct transportation facility. Adequate
infrastructure is available in GIDC, Umargaon. In early 1990s most of the
textile units came up in the area. By the time Automatic and shuttle-less
looms were also installed in the area in lieu of old plain looms. At present, in
the GIDC, Umargaon, the plain looms have been reduced to about less than
300 only whereas Projectile looms have been increased to about 1600. Few
Air-Jet, Rapier and Automatic Shuttle looms have also been installed.

Historical Evolution.
GIDC the most customer oriented corporation, came into existence in
1962, under the Gujarat Industrial Development Act, 1962, with a vision of
accelerate the pace of industrialization in the State of Gujarat. The GIDC,
Umargaon was established in 1971 as green field industry area/pollution free
industrial area and at the out set a few textile units with plain looms were
established.

There is no local market in Umargaon for yarn and fabric. Since the
entrepreneurs are from Mumbai and closely associated with the Mumbai
market for their business as well as Umergam Industrial Area is declared as
Pollution Free Zone, the grey fabrics produced in Umargaon is being sent to
Vapi, Mumbai and other destinations for further processing and marketing.
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The production programme /orders for fabric production are based on the
demand of Mumbai market/merchant exporters. The fabric meant for export is
being exported through merchant exporters, except a few manufacturers, who
are exporting fabric directly from Mumbai. It was informed by the Association
that about 35%- 40% of their production is being exported to middle-east
countries and E.U.

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Taluka : Umargam District : Valsad On 2001
Area:
1) Geographical area 36212.32 Sq. Kms.
2) Forest area 43174.93 Hect

Population:

1) Total Population :- 23624716

(a) Male :- 12164916

(b) Female :- 11459816
(c) Rural :- 21082220
(d) Urban :- 254256

2) Total Workers :- 9720514

(a) Male :- 6716115

(b) Female :- 3004413

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 Present status of the cluster

The Indian textile industry has a significant presence in the Indian

economy as well as in the international textile economy. Its contribution to the
Indian economy is manifested in terms of its contribution to the industrial
production, employment generation and foreign exchange earnings.

In this cluster there are about 106 Weaving / Powerloom units out which
more than 100 units are having projectile looms. Rest of the units having
shuttle looms. The size of the unit is generally minimum 8 looms to maximum
of 108 looms. and all the units are having their own warping machines for their
requirement. The main products of projectile looms are Polyester/Viscose/
Blended Fabric for suiting and shirting meant for export and domestic market.
The Air-jet looms are producing industrial fabric for luggage purpose and other
industrial applications whereas Automatic looms are producing suiting as well
as shirting and plain looms are being used for manufacturing of shirting
(cotton as well as blended) and technical textiles such as filter fabrics and
other technical textiles. It is estimated that almost 80 percent of the units are
engaged in job work only.

Less than 15% of the SMEs are producing Polyester/ Viscose/ Blended
Fabric for suiting and shirting on their own brand name, along with some job
work order also. Around 5 % of units are producing technical textiles against
domestic and international markets. Those who are producing technical
textiles are more active and enthusiastic in the cluster. Around 7 nos of ready
made garment units are functioning there, which are producing shirts, ladies
garments, kids wear, and inner wear against both domestic and international
markets.

Improved fabric quality and higher productivity through up-gradation of

weaving technology is required to reduce the cost of production and will also
add to the viability of the units to enable them to compete better in the internal

6
and international markets leading to higher consumer satisfaction and export
performance.

Shuttle-less looms dominate the Umargaon Powerloom cluster and few

plain looms are working on some specialized fabric meant for domestic
supply. The entrepreneurs are very progressive, as they have already
installed automatic as well as shuttle-less looms and now looking for further
expansion to increase their production capacity. Since the entrepreneurs
have already come forward by installing up-graded technology and most of the
entrepreneurs have already installed warping machines in their units, which is
in excess of their own requirement, there appears to be ample scope for
expansion to utilize their weaving preparatory capacity as well as to amplify
their profit margin by enhancing the production capacity.

The entrepreneurs have already installed imported second-hand (more

than 10 years old) projectile looms without availing the benefits of Technology
Upgradation Fund Scheme (TUFS), which allows import of second-hand
shuttle-less looms of less than 10 year old only and also determined to install
another set up of new looms with modern technology. During the year 2003-
04, 140 TW-11 model and 45 PU model Sulzer looms were installed in 26
units.

Sketch of SMEs
Location
Located on Western Railway and close proximity to Mumbai & Surat
city.

No. of Textile Units

(Other than Weaving/PL) I) Twisting :- 15
II) Texturizing :- 01
III) Knitting :- 02
IV) R.M.G. :- 07

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 No. of Powerloom Units :- 106
No. of Powerlooms :

Shuttle-less Looms
a) Projectile (Sulzer) 1600
i.
b) Air- Jet 300
c) Rapier 400
ii Automatic Looms (Ruti-C) 175
iii Plain Looms 300
Grand Total - 2775

Prominent Readymade garment units

M/s. Usha Garments,
Basemen
Zodiac
Maxwell (V.I.P.)

Average Size of Units

The size of the unit is generally minimum 8 looms to maximum 108
looms. In average 12 to 24 looms per unit

Pattern of Ownership : Proprietorship

Fabric Production : 128.37 Million Sq.Mtrs.

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 (Avg. production per annum 306
days)

Appr. Turn over : 6250 Million

Appr. Investment in Land & Building 28 to 30 Crores

Appr. Investment in Machineries 135 to 140 Crores

Type of Yarn being used :

Polyester Viscose Blended Yarn (65/35),100% Cotton in the count
range
of 2/30s,2/60s,2/76s,2/80s, Polyester Yarn & 80D-500D.

Products :
Details of the major qualities being manufactured in this area are as
under:

Sr.
Fabric Warp Weft RxP
No.
84x56
1 Suiting PV65/35,2/30 PV 65/35, 2/30
64x56
Shirting Polyester 68x60
2 PV2/60, 2/76
80D 80x72
2/60,2/76,2/80
100%Cotton 40s, 132x112
3 Shirting 100% Cotton
2/80s,2/60s,2/100s 84x76
Technical Polyester Polyester
4 60x84
Textiles 50-500 D 50-500 D
Industrial Polyester Polyester
5 60 x 52
Fabric 150D 150D

Rate of Fabric per mtr.Appr. :

i. Suiting : Rs.80.00 to Rs.120.00
ii. Shirting : Rs.30.00 to Rs. 55.00

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 Source of Raw Material: Various quality of yarn are being procured

from Mumbai, vapi ,surat and southern areas.

Market (Indigenous) : Mainly Mumbai.

Labour Charges :
(Salary on the basis of 26 working days)
i. Semi-skilled : Rs.2700.00 to Rs.3200.00 pm
ii. Skilled : Rs.5000.00 pm
iii Employment : Appr. 2500 to 3000 both direct and
indirect in powerloom SMEs
1250 to 1400 workers both direct and
indirect in Ready made garment units

Job Charges : Suiting Rs.11.00 per mtr.

(for shuttle-less looms) Shirting Rs.5.50 -Rs.7.50 per mtr.

Export : Blended suiting mainly for Gulf countries

through Merchant Exporters of Mumbai.

LABOUR
The cost of labour is affordable. The units approximately work only for
310 days in a year. The different types of workers engaged in the units are
Jobber, Wrapper, Bhmisar, Weaver and Folder. The job of the jobber is only to
attend to the break down of the looms and to put them back in working
condition.

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Process Flow Chart

Raw Material
(Cotton & synthetic yarn
both dyed and Grey)

Warping
(Preparation of Beam in
desired quality)

Looming
(Drawing in & denting)

Weaving
(Production of fabric)

Finishing
(Required finishing of fabrics
mostly done by outsourcing)

Packing

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 OTHER ASSOCIATIONS AND SUPPORT INSTITUTIONS

LOCAL ASSOCIATIONS

Umargam industries Association

This is the only one association acting here which represents
collectively all type industries which are present in the GIDC. Approximate the
major part i;e 20% members belongs from the powerloom SMEs. Even though
being a common association the activeness towards the powerloom SMEs is
in considerable level.

This association is functioning in well equipped building with sufficient

infrastructure and reacting timely while arising of disputes. However initiatives
are geared up for the development of the powerloom SMEs separate textile
association to take more focus over the existing and upcoming disputes.

Powerloom Service Centre

The Powerloom Service Center play a vital role in the development and
modernization of the decentralized powerloom sector. They provide them
necessary training, consultancy and testing facilities. The functions performed
by Powerloom Service Centrs are mainly developmental in nature. Some of
the important functions are as under:

i) To impart practical training to powerloom weavers and those who are

interested in taking to those vocation, to help them acquire the requisite
knowledge and skill in weaving, improving efficiency and skill in producing
better quality cloth and stepping up productivity.

ii) To impart training in various aspects of loom working and loom

maintenance, repairs, servicing, etc.
iii) Dissemination of knowledge and technique to weavers in increasing
productivity and efficiency, reducing wastage, clothing damage etc.

iv) to act as an agent to transmit the problems of the powerloom sector to

appropriate quarters for solving them by means of cluster based approach.

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v) Guiding the powerloom weavers about modernization and agencies, which
they may approach for financial assistance for it.

vi) Collection of statistics/information about looms.

vii) Guiding powerloom weavers about marketing.

viii) Providing testing facilities to powerloom sector.

ix) Organise seminars, workshops and exhibitions on new technologies, new

developmental schemes, etc., in association with regional office.

x) Co-ordinate powerloom developmental activities and liaison with the State

Governments.

xi) Provide technology inputs on loom maintenance, repair, etc.

xii) Guide powerloom weavers on design development.

xiii) Enrollment of powerloom workers under the Group Insurance Schemes

launched by Govt. of India.

Financial Institutions:

There are five nationalized banks providing service to the SMEs.

Mejority of SME s are Mumbai based and maintaining financial activities there
itself. They are utilizing the cluster based banks for their Current account
Activities.

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 INSTITUTIONS RELATIONSHIP MATRIX (Existing)

- UIA GIDC DIC PSC FI PL-SME

UIA - H M M M M

GIDC H - H L L L

DIC M H - L L L

PSC M L L - L M

FI M L L L - M

PL-SME M L L M M -

Note. : -

1. UIA - Umargam industries Association

2. GIDC - GIDC Office ,Vapi
3. DIC - District Industries Centre, Valsad
4. PSC - Powerloom Service Centre Office of the Textile Commissioner
5. FI - Financial Institutions/ Banks
6. PL-SME - Powerloom SMEs of the cluster

b) Relationship Indicators Words:

H : High, M : Medium, L : Low,

With the sensitization process and various interventions in the cluster, it is presumed
that there would be High relationship between the all above indicated institutions and key-
actors of the Umargam Powerloom Cluster.

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 Cluster Map of Umergam Power loom Cluster (Pre Intervention)

Master Weavers
Export
Yarn Mfrs
(Cotton & Synthetic
Grey & dyed) P/L Units Domestic Market
(80% Job work)
Shirting &suiting
P/L Units
(15% Own Prodn.)
Export
Spares, Service etc. Shirting, Suiting &
Technical Textiles

Domestic Market
Fabric Supplier RMG Units
(From Southern
States 100% Cotton)

DIC PSC
FIs TXC ASSO GIDC

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 Cluster Map Of Umergam Powerloom Cluster (Post Intervention)

BDS
(Wind Energy Generation,
Technical Institutions
Technical Consultancy)

Yarn Mfrs
(Cotton & Synthetic Export
Grey & dyed)
P/L Units
Shirting, Suiting &
Technical Textiles
Domestic Market

Spares, Service etc. Export

RMG Units

DIC NIFT PSC

FIs FIs TXC ASSO GIDC

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 Value Chain Analysis
Analysis of 1 Metre Polyester Luggage Fabric of Quality 155Dx155D
(Ends 52 X Picks 52 width 58)

Raw Material (Polyester)

(Rate/Kg of 155D Rs.105/-)
(140 gms RM for 130GSM fabric)
1 Metre = Rs. 14.70

Weaving
Charge = Rs. 3.50/Mtr

1 Metre Rs. 18.20

Sale price
Add 20% Profit i.e. Rs. 3.64
1Mtr = 21.84
Say 1 Mtr = Rs. 22.00

There are number of items and different types of raw material i.e. Grey yarn or
dyed yarn used by the SME s and doing mainly Job work. The value chain
analysis is given on approximate percentage basis of sale price is as given
below
1. Basic Raw Materials : 70%
2. Job Work Charges : 15%
3. Sales Margin : 15%
As the SMEs are getting the mere conversion charges of the intermediate
finished goods looking marginally as equal to the master weavers. As a
justification in this business strategy there are lots of positive aspects to the
powerloom SMEs to acquire the sales margin also by direct marketing / sales.
However to achieve all those marketing ability they have to fine tune their
mind set, business strategy, marketing strategy. Hence intervention required
on those parts to the powerloom SMEs.

Value Chain Analysis - 2

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Analysis of 1 Metre PV Suiting Fabric of Quality 2/40s*2/40s
(Ends 86 X Picks 56 width 60)

Raw Material (PV yarn dyed)

(Rate/Kg of 2/40s Rs.130/-)
(280 gms/lr.mtr )
1 Metre = Rs. 36.40

Weaving
Charge = Rs. 13.50/Mtr

1 Metre Rs. 49.90

Final finishing
Charge = Rs. 9/- per Mtr.
1 Metre - Rs. 58.90
(Job work from near by areas like Vapi)

Sale price
Add 20% Profit i.e. Rs. 11.80
1Mtr = 70.70
Say 1 Mtr = Rs. 71.00

18
 The value chain analysis is given on approximate percentage basis of
sale price is as given below of production of suiting fabric.

1. Basic Raw Materials : 50%

2. Job Work Charges : 30%
3. Sales Margin : 20%

As the SMEs are getting the mere conversion charges of the intermediate
finished goods looking marginally as equal to the master weavers. As a
justification in this business strategy there are lots of positive aspects to the
Powerloom SMEs to acquire the sales margin also by direct marketing / sales.
However to achieve all those marketing ability they have to fine tune their
mind set, business strategy, marketing strategy and brand image. Hence
intervention required on those parts to the Powerloom SMEs.

19
 ANALYSIS OF BUSINESS OPERATION OF SMES

We can point out this cluster which has ideal features and almost
developed strategy when compare to the other clusters in our nation.
However the powerloom SMEs in the cluster are still staggering since
the last five years. The growth and development achieved from nineties
to the beginning of the century have not been continuing. This is mainly
due to the failure of SMEs to adopt themselves to the changing the mind
set and their business strategy, markets and products to face the global
competitiveness. The future prospect of the powerloom SMEs of the
cluster depends on up-gradation, modernization of their existing set-up
including machinery and diversification of the products. In order to keep
an upper hand in the fast changing market, one has to be innovative in
manufacturing as well as in designing in the product and have the full
knowledge of life cycle of a product.

Raw material & Production

During the diagnosis study, it was understood that about 80% of
powerloom units producing under job work basis mainly depends on the
Mumbai market environment. Rest of powerloom units producing as per
their buyers requirements and exporting directly or through the buying
agents who are Mumbai based.

The powerloom SMEs of this cluster are manufacturing several types

of fabric. The 80% of the P/L SMEs, those having looms of modern
technology, are engaged in job-work for the leading retailers and
Mumbai based agents. The remaining 20% are manufacturing suiting
and shirting are also in the market, They use, in general, different types
of raw material to manufacture its own product. Such units are
purchasing yarns required by their units on cash basis and have
bargaining power but due to manufacturing of very small lot
20
sizes/batches of the fabric, they purchase yarns of required color,
count/denier, when actually required.

As stated above that the majority of Powerloom SMEs are getting the
raw materials from the their buyers as such, they literally get only the
conversion cost, which is just sufficient enough to work out its monthly
expenses after paying wages of the workers, which means that the profit
is very marginal. There are very few powerloom SMEs, which are
procuring the yarns from depots, get warped, weave them, get
processed from processors and market the product through agents /
brokers. Sometimes, the Yarn traders/ commission agents are
increasing the prices of yarns by showing deliberate shortage of yarns.
Thus the yarn prices in the market are highly uncertain. As the cost of
raw material is having approximately th share in the total cost of
manufacturing, hence maximum efforts are required to put by the CDA
and Key-actors of the cluster to address it properly.

Most of the powerloom SMEs of the cluster are having their own
looms and sheds. The nos. of looms of SME varies from 8-108 Most of
them are doing this business since last 15 to 25 years. The technology
of the machine installed in most of the powerloom units are in advanced
weaving technology based and even those have looms of modern
technology, it is more than 10 to 15 years old. Many of the SMEs, which
are having their existing infrastructure, desires to upgrade their
technology but are not ready to invest in new / modern technology due
to fear of uncertain future and market.

Mean while intervention is required to motivate them to follow the

preventive maintenance of the installed machinery. By this method they
can reduce the down timing of the machineries, quantity of inventories
an d improve the productivity.

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 Testing and Quality Control have so far not been realized as an
integral function of industrial management, partly due to the lack of
facilities in the sector and partially due to the poor awareness by the
units. The yarn received by the SMEs is not got tested for the quality
parameters like Count/Denier, Oil Contains/ Nos. of filaments in
Synthetic yarn, CSP, U% with Imperfections etc. Moreover, the yarns
are not tested even for the analysis of adulteration. The major reason for
the above situation is due to their main a function over job work basis.

Mean while majority of the powerloom SMEs are maintaining head-

wise accounting for the various types of expenditures hence it is
comfortable to calculate the extent of leverages in its business. By
seeing the present industrial scenario as well as to the changing pattern
of the policies of National and International level, those powerloom
entrepreneurs have skill in marketing and technical fronts to go for huge
capital investments.

Moreover the cluster has many successful stories of SMEs who are
engaged in technical textiles and some other innovative products. The
opportunity is looking wide for the advent of more forward linkages like
ready made garment units, and embroidery units.

As said above this cluster having lot of ideal qualities compared to

other textile clusters in India.

FINANCE: -
Most of the units are financially independent with a strong base.
Loans are easily available from banks and other financial institutions.
The powerloom SME s had put their own money initially for working
capital and make payments to the yarn supplier(s), workmen in the
factory, spare-parts suppliers etc. after receiving payments for their
fabric through agents and with this cycle, adjustments of due payments

22
are managed by them. Most of the SMEs have not shown to avail
finance assistance. The local bankers revealed that they are using them
for their current A/C,due to most of the owners are having base at
Mumbai they are utilizing Mumbai based financial institutions. However
intervention required to motivate to avail Govt. assistance.
MARKET: -
Even though majority of powerloom SMEs of the cluster have
knowledge of the market & user of their products but they depend totally
on the buyer who is giving job work for them. Also there is no
synchronization of thoughts and activities between the SMEs that can
help to lead the community as a whole. Instead this, they are cutting
each others market and there by creating problem for each other by
creating a cost based market and ultimately the commissioning agents /
traders are benefited out of this as agents and traders take away major
share of profit margin on purchasing/ selling of the product with value
addition. Hence, a market consortium is required to be made of the
powerloom SMEs. There is wrong conception among them that some
one will empower their business by knowing their business links. Hence,
trust - building measures is required to be made first of all before
initiation of the marketing consortium.

Discount strategy can be adopted only by those SMEs having

strength in all field of the business operation and are capable to
manufacture value added product and are innovative in the field of
design and pattern as per the trend of the market. Variation in products
mix, particularly product innovation / diversification is in some what
existing condition in few small powerloom enterprises of this cluster as
they are manufacturing technical textiles and some industrial fabrics
since so many years whereas those have some knowledge of global
market trend and strength on financial fronts change the
quality/pattern/design of the fabric as per seasonal demand in the
23
markets or as per requirements from global market. But most of the
powerloom SMEs of the cluster are totally under job work basis and they
always manufacture fabrics of the pre-desired quality/pattern and
quantity. Moreover, an owner only is looking after the business of the
units.

On this part, nothing could be worked out as majority of the

powerloom SMEs are running the business based on their own finance
and do not desire to discuss on this point.
Human resource
People come from rural areas near around cluster but 98% of them
having nativity of U.P.,M.P. ,Bihar and other sates. The wages are
settled based on monthly salary wise. The working conditions of the
labours are in comfortable condition compared to the other clusters of
India. The wages and workloads, bonus and other statutory benefits in
powerlooms units are mostly same among the cluster.
Generally the labours are semi skilled and getting training by their day to
day work practices. So intervention required to motivate for formal
training. Labor floating due to more wages offered by the other
industries affects the industry more. The labour though in abundance but
is not regular and reliable. Though the labour is some what skilled, but
the carelessness on his part like handling of yarn, un-consciousness of
working reduces the efficiency.

24
 SWOT ANALYSIS

STRENGTHS

Technology:

- Availability of customized machines

- Availability of imported high speed looms of almost international
standards.
- Majority of SME s owners are technocrats and having flexible
strategy
- Feasibility to produce more variety of products
- Interaction with industry to disseminate technical information
- Pioneers in production of Technical textiles
- Innovation capability.

Inputs availability:

- Uninterrupted supply of raw material from near by areas.

- Almost stable price range for the Raw materials.
- Uninterrupted supply un fluctuated power.

Human Resource:

- Workers are skilled and affordable.

- Most of the work is learnt while on-the-job
- Keeping Prolonged history of undisputed working pupils.

25
 Markets:
- Proximity to the market
- Strong presence in the Domestic as well as international
markets
- Good reputation among the leading domestic retailers

Business Environment:

- More or less a stable business environment for the past couple

of decade.
- Possibility of Subcontracting
- More flexible business strategy

Finance:

- Majority of SME s having its own sound financial background.

- Maintaining records and essential information as well.

Environment & Infrastructure:

- Due to adjacent to coastal area more humidity in the climate

which
plays vital role in textile industries.
- Pollution free zone.
- Ideal environmental condition.
- Well Connected by rail and adjacent to NH.

26
WEAKNESS

Technology:
- Lack of forward and backward linkages within the cluster.
- Limited production capacity
- Inability to keep the production schedule
Inputs availability:
- Heavy duties on raw material
- Very high cost of power.
- Machineries accessories costing more.
- Absence of latest finishing
Human Resource:
- Labor floating due to more wages offered by the other
industries.
- No skill up gradation training for the workers
- Neither the management nor the labor has got any formal
training
- Lack of professional commitment
- Non availability of supervisory personnel
- Low level of motivation
Markets:
- No stress on branding
- Unhealthy competition
Business Environment:
- Fragmented capacities
- Staggering mind set of Management

Environment & Infrastructure

- Non-availability of support institutions to provide training,
testing, design inputs, product development, technology and
advisory services.
- Lack of national and international financial institutions;
- Lack of NGOs and trade associations;

27
OPPORTUNITIES

Technology:

- Advent of latest technology with the intervention of various

departments/firms
- Creation of technological awareness among entrepreneurs
- Tremendous enthusiasm on the part of the cluster actors
- Brighter prospects of a Common Display Centre being
established in the cluster

Inputs availability:

- Competition is going to make availability of inputs cheaper and

sufficient.

Markets:

- Globalization can lead tremendous market potential for the

competitive firms
- Tariff and non-tariff barriers are diminishing.
- Enterprises can join hands for international marketing, brand
building and Participation in trade fairs.
- Enormous scope to supply technical textiles
- Growing international and domestic markets
- Strong domestic market
- Large chain stores entering into the Indian market

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Inputs availability:

- Competition is going to make availability of inputs cheaper and

sufficient.
- If the power tariffs are lowered the cluster can become price
competitive

Human Resource:

- Increased awareness and training is likely to improve the skill

base of the workers.

Innovation Capabilities:

- Exposure visits, participating in exhibitions shall make the

entrepreneurs and technicians more innovative in problem
solving
- Scope of development of new products

Business Environment:

- Changing business environment can provide opportunity for

enterprising firms
- Possibility of establishing Common Testing Laboratory

- Becoming subcontractors to large units

- Motivating attitude of Govt. policies

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THREATS

Markets:

- Cheaper imports from other countries due to trade liberalization

- China threat capacity to deliver huge quantity at low price
- If the price competition persists for long, it can pose a threat to
cluster's survival.
- Overseas importers are smart enough to change their sourcing
country
- Imports is going to increase in the coming years
- Technology is an ever changing process

- Competition from other power-loom clusters that have started

producing technical textiles
- Dynamic business environment
- Increasing global competition
- Frequent fashion changes

Govt. Policy

- Burden of Taxes increasing

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 VISION STATEMENT

"Significant Improvement in the present market share

in Domestic & Export by increasing the capacity with
appropriate technology and manufacturing globally
preferred quality of versatile textile products

STRATEGIC DIRECTIONS

Mind set
The main strategy required for development of the cluster lies in
changing the mindsets of the core actor i.e SMEs owners. They should
be encouraged to make network amongst themselves in order to
undertake necessary developmental initiatives, including the
establishment of necessary infrastructure facilities and to react
considerably against adverse Govt policy which are the main bottlenecks
in the cluster.

Technical
Technical support for improving the quality, design, productivity
and linkages with the technical institutions and BDS providers will be
provided when the industry is able to absorb such inputs Design center
and resource center will also be established to build the clusters
capacity to create new products.

Energy
Other technical inputs to conserve energy, resource, and motivate
for other alternative energy producers.

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Marketing
Market surveys to identify the potential for the existing products,
scope for diversifying into new products and new market segments will
be undertaken to tap the huge market potential for the cluster. Motivation
towards own brand marketing.

Product
At present, the units in the cluster produce only gray fabric without
any value addition. Hence they should be trained and guided in product
innovation and diversification.

Quality Management System

Gaps should be identified in the implementation of quality
management systems like 5 S Working System,ISO9000, 14000, SA
8000 and etc,.

Working Conditions
Necessary facilities should be made available at least within the
factory premises.

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 ACTION PLAN FOR COMMENCING YEAR
NAME OF THE CLUSTER : UMARGAM POWERLOOM CLUSTER
LOCATION : VALSAD Dist, GUJARAT, INDIA

Total Sources of funds

Duration fund (Rs. in lacs)
Sr. Name Partners/
Objective & Time Beneficiary required Expected Outcome
No of Activity Collaborators Cluster Support
Period (Rs. Govt.
Actors Institutions
lacs)
1
Trust Building

Work shop/Seminar on trust Office of TXC,

To motivate 1 day All Cluster Confidence among the
building, opportunities, PDEXCIL,PSC 0.25 0.25 - -
cluster actors 1 Quarter
st
actors cluster actors
schemes Umargam.
Educating benefits of team 1 day Strong Association,
Strengthening of Office of TXC,
work, need for active 1st Quarter Cluster actors 0.25 0.25 - - formation of group to
Associations PDEXCIL, PSC
association. avail benefits

2 Capacity Building

Through Better response for each

Publicity of the Wider publicity of Asso, TXC, supporting
out the 1.0 1.0 - - activity and emergence
developmental activities the activities CDO institutions
period of new units
1 day
Media plan Exposure on
1st,2nd, 3rd , Asso, PDEXCIL, Weaker cluster
(Exposure on developed Capacity building 1.5 1.5 - - development in
4th TXC actors
cluster/technology) Technology/Product
quarters
To motivate and
Work shop/Seminar on
emerge
alternative energy 1 day Asso, All Cluster Solution for low cost
awareness over 0.25 0.05 0.20
Generation ( Wind 1st Quarter GEDA,BDS. actors energy generation.
alternative
energy,Bio Gas)
energy
Motivation, Exposure on
Exposure visit to China For PDEXCIL, TXC,
Exposure and 7 days development in
App. 20 Persons Guj Govt., PL cluster actors 20 15 5 -
motivation 4th quarter Technology/Product in
SMEs
global level.

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 3 Market Development
1 Day Associations, Direct selling, wide
Market All cluster
Buyer seller meet Once in 6 TXC, Support 3.0 2 0.5 0.5 market, Knowledge on
development actors
Months institutions market trend
4 Technology Upgradation
Seminar /
Awareness for
workshop/demonstration on 1 day Office of TXC, All Cluster modernization of
Technology 0.25 0.25 - -
Technology upgradation, 2nd quarter PDEXCIL,BDS actors Technology
upgradation
utilizing schemes
Training Programmes
Development in
By Experts for Development, Awareness for
2 days PSC, BDS, All Cluster Technology/Product in
upgradation & product Technology 1.0 1.0 - -
3rd quarter INDA actors global level.
diversification for managerial upgradation
groups

Note: Action Plan given is road Map and not a Blue Print

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