Indian Textile Industry Scenario January 2015

Transcription

1 Liaison Office, India Indian Textile Industry Scenario January Market Information: Application Industry 1.1 Welspun unveils India s largest spinning facility Reliance Industries Ltd to enter textile JV with China s Shandong Ruyi Indian cotton sector witnesses all round growth in IKEA announces Make more in India initiative India s Technical Textile sector to grow at 20% till Government Information 2.1 New Indian government adopts textile sector friendly policies Upper House of Parliament passes bill to revive sick textile mills 5 3 General Information 3.1 FDI inflows into India up 25% in April-October period 6 4 Indian Textile Machinery Manufacturer & Dealer 5 5 Special Rates at Hotels in India 6 6 Activities and Services of India 7 7 About the Author/Editor 8 Please Note: 1 crore: lakh: Euro: Rs 78 Created by VDMA India Textile Machinery Division

2 1. Market Information: Application Industry 1.1 Welspun unveils India s largest spinning facility Welspun India Limited (WIL), part of the Euro 2.34 billion Welspun Group, has unveiled its new spinning facility at Anjar in Gujarat, which is India s largest spinning facility under one roof. The new, world-class facility was inaugurated by Gujarat chief minister Anandiben Patel and Union Minister of Textiles Santosh Kumar Gangwar at Welspun City, a 2,500 acre township set up in the heart of Anjar town. The expansion project reflects the ethos of the Government of Gujarat s recent Farm-Factory- Fabric-Fashion-Foreign Textile Policy, which is aimed at strengthening the entire textile valuechain, WIL said in a statement. The new facility will be instrumental in doubling WIL s spinning capacity to over 3,00,000 spindles, thereby fulfilling nearly 70 per cent of the company s internal yarn requirements. It will also decrease WIL s dependency on external sourcing. With the opening of the new facility, WIL is envisaging more emphasis on better quality and increased profitability, which in turn will help consolidate its leadership position in the global home textiles industry. This expansion of our Anjar plant is a major milestone that represents our long-term commitment to the Indian economy and the Central Government s Make In India vision. Our core competencies of quality and innovation will get further strengthened through increased self-sufficiency, better quality control and an efficient supply chain that will enable us to take the next leap forward. We are very grateful to the State Government of Gujarat for extending their proactive support as we expand our operations, said Balkrishna Goenka, Chairman, Welspun Group. 1.2 Reliance industries Ltd to enter textile JV with China s Shandong Ruyi Reliance Industries, which started as a textile trading company, has decided to hive off its oldest business into a joint venture with China's Shandong Ruyi Science and Technology Group Co, the Indian conglomerate said on Tuesday. The group diversified from trading to manufacturing textiles, largely polyester yarn, in the 1960s. Reliance Textiles was incorporated in 1966 and it is this company which later became Reliance Industries Ltd (RIL) in RIL is currently India's third largest private sector company by market capitalisation and the largest by far in revenues. RIL will hold a 51% stake in the new joint venture thus formed while the Chinese partner will hold the balance. The company sells products primarily fabric for suits under the 'Vimal' brand. "Our joint venture with Ruyi Group will help Reliance reposition its textile business on a high growth path. Our partner's deep commitment and global reach in textile business will enable this JV to harness the growth potential of the Indian market and emerge as a global textile player," said Nikhil R Meswani, executive director, RIL. The proposed transaction is subject to obtaining requisite approvals. A RIL spokesman told ET that the two companies are yet to decide on the financial consideration. The JV will leverage RIL's existing textile business and distribution network in India and Ruyi's state-ofthe-art technology and its global reach. It will expand the geography for the brand 'Vimal' besides introducing brands owned by Ruyi in India. RIL has a presence in Indian textile 2

3 market, especially in the worsted and synthetic suiting fabric segments, while the Euro 2.34 billion Ruyi, a leading textile company in China, has a presence in America, Europe, Japan, Australia, New Zealand and China. Ruyi owns brands like 'Taylor & Lodge', 'Harris Tweed', 'Royal Ruyi China', 'Nogara Italy' and 'Indios Italy', among others. In India, Ruyi sells the 'Georgia Gullini' brand in the worsted suiting segment of the market. "This business operation and activities would get realigned to strengthen the JV," the press release said. "With closer economic relations between China and India and Shandong Ruyi Group's expanding global presence in the textile sector, we see our joint venture with Reliance as a significant event for the group. To enter the Indian market with Reliance we truly believe in the bright future of this joint venture business," said Qiu Yafu, chairman, Shandong Ruyi Group. India has been among the top three textile and apparel exporting nations in the world for the last three years. The CII-BCG report on 'Make in India' states that India is expected to grow as an exporter of textile and apparels but also that much of the potential is yet to be tapped. 1.3 Indian cotton sector witnesses all round growth in The Indian cotton industry has witnessed an all round growth in and output is projected at around 40.2 million bales (1 bale=170 kg) in the current fiscal year. According to the Cotton Association of India (CAI), cotton output stood at 15.8 million bales in , which has more than doubled in "We are on the doorstep of surpassing China in cotton output and become the world leader," CAI president, Dhiren Sheth said at the organisation's AGM in Mumbai. Consumption too witnessed a healthy growth and is estimated at 30.6 million bales during the current fiscal and ranks only next to China, which is world s number one consumer of cotton. Sheth said India exported 11.7 million bales of cotton in the previous fiscal year and here too ranks second only to the US in exports. The credit for hike in output goes to farmers, who have brought more acreage under cotton, helped by Bt cotton, Technology Mission on Cotton and government policies, he added. However, Sheth noted, yields were abysmally low at 540 kilograms per hectare in India, far below the world average of 802 kilograms per hectare. While having a third of the country's cotton acreage, Maharashtra s yield per hectare was a dismal 328 kilograms per hectare. Excluding Maharashtra, the all Indian cotton average yield stood at 645 kilograms per hectare. (AR) 1.4 IKEA announces Make More in India Initiative Home furnishings company IKEA, the first major single brand retailer to get FDI approval from the Indian Government, has announced a new Make More in India initiative. The new initiative is aimed at inviting potential partners and to expand Ikea s supplier base in India. It also aims at increasing the categories of home furnishing products sourced in India. The initiative also has an objective of doubling the goods Ikea sources from India by The company currently sources goods valued at around 315 million from India annually. We believe there is tremendous potential in India. We are looking for new suppliers who share our vision and values, are willing to grow with us and become world class suppliers. We believe that many suppliers will come from other segments who are looking to diversify their business, said Sandeep Sanan, head of sourcing, Ikea South Asia, said in a statement. Today, Ikea has 48 suppliers in India with 45,000 direct employees and about 400,000 people in its extended supply chain. To widen its supplier base under the Make More in India initiative, Ikea India will conduct two seminars in Mumbai on January 16, 2015, and in 3

4 Bangalore on January 23 where more than 100 new potential suppliers are likely to participate. The seminars will focus on enrolling new suppliers in existing categories like textiles and rugs; as well as for new home furnishing categories like furniture, mattresses, and sustainable materials like bamboo and acacia, Ikea said. Sandeep added, Ikea is committed to responsible sourcing, and our history of developing successful supplier relationships in India means that Ikea is well positioned, not just to Make in India for India, but to Make More in India for Ikea worldwide. This gives the current and future new suppliers in India a much bigger market to aspire for. Our suppliers are our strategic long term partners, and we are happy to share knowledge and technologies as we want them to grow with us. Ikea s Make More in India is a major initiative to speed up the process of finding the right suppliers who will partner Ikea to grow business in India. 1.5 India s Technical Textile sector to grow at 20% till 2017 The technical textiles sector in India is likely to grow at 20 per cent per annum till , Union Minister for Textiles Santosh Kumar Gangwar has said. Speaking at the launch of curtain-raiser of TECHNOTEX 2015 in Mumbai, Gangwar said, There is a huge potential for the technical textiles sector to grow at 20 per cent per annum during the next two years. Government has recognised the importance of technical textiles in the national economy as well as the potential for increasing production and exports in the sector. Technical textiles are textile materials and products used for their technical performance and functional properties. Technical textiles are an important part of the textile industry and its potential is still largely untapped in India. With increase in disposable income, the consumption of technical textiles is expected to increase. Textiles Commissioner Kiran Soni said eight Centres of Excellence have been created to provide world-class testing facilities, training, incubation and prototype development, and to act as one-stop-shop to cater t/wo the needs of the technical textiles industry. n addition, there are schemes aimed at strengthening database and standards for technical textiles, usage of agri-textiles in the northeastern region and the restructured Technology Upgradation Funds Scheme (TUFS). Soni said about 850 units are registered as technical textiles units under TUFS with the Office of the Textiles Commissioner, Mumbai. A majority of these textile units are concentrated in Gujarat, followed by Maharashtra. 2. Government Information 2.1 New Indian government adopts textile sector friendly policies The new government, under Prime Minister, Narendra Modi has laid emphasis on an economic vision based on increasing production, export and generating employment. Particular attention will be given to generate productive employment opportunity for the youth, inclusive and participative growth, skill, scale and speed, develop Make in India brand, zero defect and finally zero effect on environment. The new government has also taken many initiatives for the development of the textiles sector, considering that the sector accounts for per cent of all exports and also is one of the largest employers. The Scheme of Integrated Textile Parks (SITP) is one of the flagship schemes of the Ministry of Textiles which aims to assist to clusterise investments by providing financial support for world class infrastructure in parks. 4

5 According to the Textiles Ministry, implementation of the scheme was held up during the last one year due to administrative bottlenecks and no sanction was given for new parks. It said the new government moved swiftly to resolve the issues and 13 new textiles parks were approved by the Project Approval Committee (PAC) chaired by the minister of state for textiles, Santosh Kumar Gangwar. While these 13 textile parks will receive a grant to the extent of Euro 66.6 million (Rs 520 crore) from government for infrastructure development, they are estimated to bring in private sector investment of about Euro 415 million (Rs 3,240 crore). Alongside, this will generate direct employment for about 35,000 persons over the next three years, the Ministry said. According to the Ministry, besides, a fresh advertisement would be issued calling for proposals for more SITP's for utilisation of the balance provision during the 12th plan period. With a vision to create an export friendly economy the government introduced several initiatives, include, a proposal to extend 24/7 customs clearance facility at 13 airports and 14 sea ports, resulting in faster clearance of import and export cargo. Duty free entitlement to garment exporters for import of trimmings, embellishments and other specified items increased from 3 per cent to 5 per cent. This initiative is expected to generate an additional apparel exports estimated at Euro 1.2 billion (Rs 10,000 crore) The proposal for imposing duty on branded items was also dropped providing relief to the entire value chain. 2.2 Upper House of parliament passes bill to revive sick textile mills Rajya Sabha, the upper house of the Indian Parliament, too passed the Textile Undertakings (Nationalisation) Laws (Amendment and Validation) Bill, 2014, a week after the Bill was passed by the lower house the Lok Sabha. The Bill, aimed at reviving sick textile mills, replaces an Ordinance promulgated by the Government of India in October this year. The Bill amends the Sick Textile Undertaking (Nationalisation) Act, 1974 and the Textile Undertakings (Nationalisation) Act, The amendments are made to protect assets of sick textile undertakings and ensure that leasehold rights of such units remain with the Central Government. According to the provisions of the Bill, lease-hold rights over land will continue to be exercised by the National Textile Corporation (NTC) on behalf of the Central Government. Secondly, even though lease-hold rights of the land are vested in the Central Government, NTC has the right to prosecute or defend any proceedings in respect of such land. Thirdly, no proceedings can be instituted against NTC on the ground that textile operations were discontinued in the textile undertaking. According to the Bill, which will become law after President s signature, the transfer of any property from NTC through any order of a civil court or other authority, which is not in keeping with either Act as amended by the Bill, will be deemed void. During the debate on the Bill in Rajya Sabha, Textiles Minister Santosh Kumar Gangwar said the Ministry is working to bring to profit a total of eleven mills of NTC in next three months. He said NTC had acquired 119 mills, of which 78 are presently closed under the Industrial Disputes Act. He informed that 23 NTC mills were running and five were in profit while 11 in dispute are put to arbitration and two have been handed over to Puducherry, while NTC is out of BIFR. Gangwar said the Government is committed to increase employment and the NTC currently employs 8,000 permanent and 3,000 daily wage workers. NTC was set up as a public sector enterprise in 1968 for managing the sick textile undertakings in the private sector that were taken over by the Government. Initially, the NTC managed 16 textile mills. (RKS) 5

6 3. General Information 3.1 FDI inflows into India up 25% in April-October period Foreign direct investment (FD) inflows into India have surged by around 25 per cent from a year ago, in the April-October period of the current fiscal year. In the seven months to October 2014, FDI rose some 25 per cent from Euro billion in the period April to October Improvement in investor sentiment and macroeconomic situation due to a series of measures taken by the new government helped attract the higher FDI. There still remain a number of challenges to make India a global manufacturing hub for instance infrastructure needs to be focused upon to Make in India program successful. A strong manufacturing sector has the potential to hike economic growth, which in turn would provide jobs to youth. According the commerce & industry minister, the government has taken several steps to reduce red tape and trim down existing laws and hiked IT use to make governance effective. furthermore, the cabinet secretary said the government has launched an e-biz portal, which offers single window clearances and approvals for the industry. According to him, various central and state government services had been integrated with the website and more government services will be integrated within a few more days. Eighteen sessions were held as part of the workshop in which 25 ministries and all states came together to build a road map to make the Make in India program a success. Sessions were held on different sectors like capital goods, pharmaceuticals, oil and gas, petrochemicals, etc. 4. Indian Textile Machinery Manufacturer & Dealer Company Products Profile Yarn Conditioning Plant Roving Transportation System Auto Doffer for Ring Frame effective Sieger Spintech Equipments Pvt. Ltd SF No. 49 Annur Road, Arasur Post, Coimbatore , India. info@siegerglobal.net SIEGER factory is located in the Industrial hub of Coimbatore city. The city in India known for its technical capabilities and availability of cost resources. SIEGER factory is spread over an area of 40,000 Sq. M. With a covered space of 9,000 Sq. M. It has appropriate equipment for manufacture of heavy vessels as per ASME standards. 6

7 5. Special Rates at Hotels in India We have negotiated special rates for VDMA member companies with Taj Group, Oberoi Group & ITC Group of Hotels covering not only the major cities like New Delhi, Mumbai, Kolkata, Chennai, Bangalore, Hyderabad but also other destinations in India like Goa, Agra, Rajasthan, Kerala and many others. The discounts range from 25% up to 45% depending on the city and the hotel. However these discounted rates would be valid only when the booking is done through VDMA Liaison Office in Kolkata. For further details or reservations feel free to contact us. 6. Activities and Services of in India Promotion of sales of members in participating divisions within VDMA, especially exports, including participation in exhibitions. Organizing symposia and similar presentations of German companies in India. Participating in and servicing bilateral program such as those in existence, with governmental participation between Germany and India. Furnishing of information about the complete product program of the German industry to assist Indian companies to identify right partners for mutual business relationship. Providing information on market trends, prospects, future development, new projects and tenders. Please contact us at: VDMA North India Office Mr. Sumit Sharma (Regional Manager) C 25, Sector 61 Noida , INDIA TEL : FAX : Mobile : sh.sumit@yahoo.com Mr. Rajesh Nath (Managing Director) GC 34, Sector III, Salt Lake Kolkata / India Tel.: / Fax: vdmaindia@eth.net 7

8 7. The Author Sumit Sharma, representative of VDMA North India Office, which was established officially in October 2006, was born in January 1977 and studied in New Delhi. He completed his graduation in Entrepreneurship and Small Business from Delhi University, with distinction in the year Thereafter, from 2001 to 2006 he pursued a career in marketing with a division of Samsung Electronics, based at Mumbai heading the states of Maharashtra & Gujarat. He returned to Delhi in October, 2006 to work for VDMA Noida office. His responsible sub-sectors include VDMA Textile Machinery, VDMA Woodworking Machinery, VDMA Agricultural Machinery, VDMA Cleaning Systems and co-ordination of activities with VDMA India Head Office at Kolkata. The North India office also maintains close contacts with the German Embassy, Industry Chambers of Commerce in Delhi as well as German and Indo-German Companies in North India. Tell us what you would like to read The author would like to publish articles that are more relevant to its readers to help making this newsletter more beneficial to them. Please feel free to share your area of interest and I will try to include those articles in my forth coming issues. You can contact me directly or write to us through VDMA Frankfurt Office. VDMA India Quarterly Newsletter-German Machinery Industry The VDMA India office publishes a Quarterly Newsletter-German Machinery Industry. This Newsletter informs the Indian industry about the development in the German Machinery industry in various industrial sectors. This Newsletter has a circulation of around 8000 copies in different industrial divisions. The VDMA member companies have the possibility of giving an advertisement in this Newsletter at a discounted rate. For further details, please contact: Ms Jamly John at: jamly.john@vdmaindia.org 8