SSAD SUBMISSION

Planning a Garment Unit
(100% export Oriented)

FACULTY INCHARGE : SUBMITTED FROM
Mrs. Sudha Singh Prem Sarojanand (AP-4)

INTRODUCTION. “Entrepreneurs are the future of this country” The global economy is taking a turn, and the world is looking upto the BRIC nations to take care of their inherent needs. This marks the rise of outsourcing and exports from India and hence the ever growing opportunities for an Indian entrepreneur. Any technologist with enough and effective experience in the relevant garment export business can run this particular business successfully by which employment opportunities can be created to a number of people of the society so as to change their existing life styles and also to develop the economy of the country by earning foreign exchange.
This project has been attempted to create technical entrepreneurs rather than the existing non-technical business people.

1.1 Stages involved in Business Development a.) Business idea generation b.) Business plan preparation c.) Start-up and growth d.) Established company e.) Interest of market f.) Financing decisions g.)Further developments

1.2 Scope of the Project The export trade has got a very high growth comparatively. And in that, our textile exports play a main and major role. And in the textiles, apparel plays a main role.

So, definitely it is a grown and growing business and also a technologist with relevant

experience could run the business successfully. And also if the business is managed and

maintained properly, profit can definitely be attained and can also provide employment

opportunities to some extend and can also get some foreign exchange thereby there

will be some development in the economy of the nation so as to see a developed

India with developing business potentials.

1.3 Objectives of the Project

- To create technical entrepreneurs rather than the existing non-technical entrepreneurs. - To set up a new garment export company with an initial production target of 2 lakhs shirts per annum with an installed capacity of 6 lakhs shirts per annum. -To provide employment to a number of people thereby to develop their life styles.
- To develop the economy of the country by earning foreign exchange..
- To set up new parameters for the other companies.
- To give challenges to foreign companies.

1.4 Benefits of the Project 1.Cash assistance 2.Tax concessions

3.Financial assistance

4.Special assistance to export oriented industries

5.Import benefits

6.Foreign exchange

7.Freight concessions

8.Special concessions to small scale industries

9.Awards for exporters

10.Insurance against risks

11.Raw material allocation

12.Duty draw-backs

13.Transport Concessions

1.4.1 Tax Concession
Exporters are entitled to many concessions in respect of the income tax, sales tax,

excise duty, import duty and export duty etc.

1.4.2 Financial Assistance
Finance in the form of advance or loan is available for export from the Commercial

Banks, Industrial Development Bank of India (IDBI), Reserve Bank of India (RBI),

Export Credit And Guarantee Corporation (ECGC),Abn Amro bank and State Bank of

India (SBI) etc. The State Trading Corporation (STC) also provides assistance to exporters.

The Banks also make payments against letter of credit (L/C) money in advance against

export documents and packing credit facility is also provided to the exporters.

1.4.3 Special Assistances to Export Oriented Industries
Export oriented industries are given special assistances in respect of the following

1. Free permission to have foreign collaboration.

2. Permission for increased capacity of production than the licensed capacity.

3. Preference in obtaining industrial license for various types.

4. Priority in importing capital equipments, machinery, spares and raw materials etc.

5. Priority for further expansion of the industry.

6. Indigenous raw materials are made available to the exporters.

1.4.4 Imports Benefits
Registered exporters can get the benefits of replenishment of import contents like

raw materials, accessories, spares etc against export of the product and can apply for

import license against exports of specified products.

1.4.5 Foreign Exchange
Exporters can obtain blanket permits of foreign exchange on the minimum export of

Rs.5,00,000 in the case of non-traditional goods and Rs.25,00,000 in the case of

the traditional goods like jute etc. Exporters can also import samples under the

blanket foreign exchange scheme.

1.4.6 Freight Concessions Concessional Railway freight is allowed on the movement of a large number of export

products from their centers of productions to the ports of shipment. Cash assistance is

given against exports of some goods by air to compensate the high freight.

1.4.8 Raw Material Allocation
Arrangements for prompt and proper supplies of selected indigenous raw materials

for manufacturing units producing goods for export have been provided.

1.4.9 Duty Draw-backs When a product is exported, it is entitled to (a) Wavier or rebate of the central excise duty payable on the export products, and

(b) Draw-backs of the whole of the customs and central excise duties paid on raw

materials and components used in the manufacture of the export products.

1.5 SWOT Analysis

1.5.1 Strengths Easy Shipment of finished products Available of sea coast
Abundant availability of cotton in India
Cheap labour
Capability in product development
Flexible schemes for SSI
Rich cultural heritage and immense diversity
South India is famous for knitted fabric where platform for availability
Of raw materials
1.5.2 Weaknesses Single fibre orientation (cotton is major)

Quality is not upto mark international standard

Negligence of government towards this sector

Small scale nature of the industry

Lack of expansion of the units

Lack of technological up-gradation

Unorganised sector

System of production

Delayed lead time

Infrastructural problems

Investment and technology

Lack of exact marketing information

Unbalanced sector wise (spinning, weaving and processing) developments

1.5.3 Opportunities

Falling market share of the newly entered countries

MFA phase out

Backward integrated production in knit sector

Increasing wage rates of competing countries

Dissatisfaction of USA / EU with China in certain aspects

Accelerated export effort

1.5.4 Threats

Domestic market increases export decreases;

Newly developing competing countries like Vietnam , Bangladesh

DDP of India is high compared to china

Orders are moving towards China and Bangladesh

Competition and pressure on price and quality due to MFA phase out

Unbalanced sector wise investments and developments

No balancing between large and small scale sectors

1.6.1 Place and Mode of Delivery

Place where the buyer has to take the possession of the goods either by means of

physical delivery (directly receiving the goods) or constructive delivery (receiving the

documents like bills of lading or Railway receipts etc, which represent the goods).

1.6.2 Transport charges, Packing etc
Normally these charges will be collected from buyers only and some times paid by the seller also.

1.6.4 C.I.F [Cost, Insurance, Freight]
C.I.F is normally included in the selling price itself. Seller undertakes all expenses

upto the place of destination of the buyer.

1.6.5 Mode of Payments

This has to be clearly stated by the seller in his quotations i.e. whether the payment is in advance or against delivery or after a stipulated time along with the details of bank through which the payments have to be made. With respect to mode of payment following terms are used
1.6.5.2 F.O.B. [Free on Board] – Transfer of the property and of the attendant’s risks

thereafter are all for the account of the buyer as soon the seller has placed the goods on

board. All expenses including placing on board and expenses incurred when the goods

were in charge of the seller. And all these expenses will be included in the selling price

itself. In USA it is necessary to precisely state “F.O.B. Vessel” in order to distinguish it

from “F.O.B. Rail car (wagon) or F.O.B. Factory”.

Market Survey
2.1 Targeted customers 2.1.1 United States – Tommy Hilfiger Levi Straus Gap Inc Liz Claiborne V.F.Corporation J.C.Penny Company Wall-Mart Stores May Department Stores Federated Department Stores Inc F.W.Wool Worth Company
2.1.2 Japan – Mitsubishi Corporation C.Itoh and co. Marubeni Corporation STEPS REQUIRED TO BECOME A REGISTERED EXPORTER Following things are to be done to become a registered Exporter in India.
1. CNX Number (RBI Code No)
2. Importer/Exporter Code No (I/E Code)

3. Pre-shipment procedure for Exporting to Quota Countries

4. Certification for Non-Restrained Items

5. Generalized system of preference

6. Membership and Registration

ORGANISATION CHART Fig. 4.1 Organisation Chart

Board of Directors

Managing Director

General Manager

Accounts/Admin
Purchase
Exports / Imports
Testing Lab CAD Lab

Stores Production Merchandising

Production

Quality Control Production
Planning and Control

Ironing and Packing
Sampling

Inspection

Cutting
Washing

Sewing

PRODUCTS TO BE MANUFACTURED
1. Coats
2. Jackets
3. Jeans
4.Shirts

Processes Involved 1.) Sample Preparation 2.) Sample Approval
3.) Costing / Order Procurement 4.) Fabric, Trims & Accessories Ordering, Receiving and Inspection 5.) Production Planning 6.) Marker Planning 7.) Cutting 8.) Sewing 9.) Trimming 10.) Inspection 11.) Washing 12.) Final inspectation 13.) Ironing and packing 14.) Storage and Exports

PRODUCTION TARGETS

Initially it has been targeted to get a production of 3,00,000 garments of men’s

shirts per annum based on an average daily target of 1000 to 1050 garments

in the first year with a 60% utilization of the installed capacity of 5,00,000

garments since it will take time for the workers to get trained and to work

better, faster with quality work.

Then in the next year their speed of work will increase along with improved

quality so that it can increase the efficiency to 70% in the second year,

again in the next year also the workers can work still faster and better. So,

it can increase upto 80% by proper men-machine management and can

increase to 85% in the next year by proper technical expertise along with

the relevant industrial experience.

3,50,000 garments (70% efficiency) in the second year

4,00,000 garments (80% efficiency) in the third year

4,25,000 garments (85% efficiency) in the fourth and the further years

Note : It has been aimed to achieve the above production targets only based

upon the manufacture of cotton men’s long sleeve shirt and if it is required

to change some other product the efficiency is prone to change depends upon

the product selected.

PLANT LOCATION
Site location for the plant has been proposed near the great southern trunk (GST) road in between Chennai to puduchery which has the following advantages.

Reasonable land cost Availability of labour Availability of high voltage power supply Well connected frequent road transports Well connected frequent train services Nearness to the airport Banking facilities Sufficient water resources Good communication facilities Nearness to the educational institutions Hospital facilities Hotel Facilities Entertainments

9.1.2 Reduced Material Handling
Reduced material handling has been planned in the following sequence of order

1. Receipts of fabric and accessories by stores through the shutters. 2. Inspection of fabrics and accessories in stores itself.

3. Issues of fabrics and interlinings to cutting through the back door of the stores. 4. Issues of cut parts to the sewing through the other end of cutting section.

5. Issues of threads etc to the sewing section through the side door of the stores.

6. Preparation of collars, collar bands and pockets in CPB (collar/pocket/button) section.

7. Issues of prepared collars and pockets to the sewing section from CPB section.

8. Delivery of stitched garments from sewing section to the collar/pocket/button

making section (CPBS) for button holing and buttoning

9. Delivery from CPBS to inspection section for inspection.

10. Delivery of garments from inspection to washing section for washing.

11. Delivery of washed garments for final inspection.

11. Then after final inspection sent for ironing and packing.

12. Then stored in form of cartons and kept ready for exports.

9.1.3 Stores

The area of stores is about 495 square metres i.e 15 mts length and 33 mts breadth There is a shutter in the side to receive the materials, a door to despatch the fabric

and interlinings to cutting section and a side door to issue thread etc to sewing section.

There are two store keepers, 8 checkers and helpers. The raw materials like fabric,

trims, accessories and packing materials are Received at the stores department . Here fabric and accessories are inspected and kept ready for issuing to the production.

9.1.4 Cutting Section This section has an area of 171 square mts (28.5 mts length and 6 mts breadth) from this an area of 66 square mts (22 mts length by 3 mts breadth) has been allotted for keeping the cutting and assorting tables alone which has been shown in figure. There is a cutting master, supervisors, layers, cutters and helpers etc. Fabric received from the stores are laid and cut here. Then assorted in the assorting table adjacent to the cutting table. Then the cut parts are put stickers to avoid getting mixed with the other lays or shades and then bundled and sent to for stitching.

9.1.5 Sewing Section
This section has an area of 693 square mts (21 mts length and 33 mts breadth.
There are six sewing lines (shown in Fig. 10.1) of each 24 machines which has been shown in Fig. 10.2 and a common set-up for collar, collar band, cuff, pocket making,buttoning and button holing as shown in Fig. 10.3. The cut, assorted, ticketed and bundled parts are fed to the sewing section. Here the parts are joined in assembly line method. After attaching all the parts together, the garment is sent for buttoning and button-holing. 9.1.6 CPBS (collar, pocket & button section In this section collars, pockets and cuffs are made separately and sent to the sewing section which has an area of 50 square mts (10 mts length and 5 mts breadth).
Buttoning and button holing are also done here for all the 6 sewing lines. Then the garments are sent to the inspection section to check for quality, measurements etc.

9.1.7 Garment Inspection Here the garments are inspected for quality, measurements etc in an area of
247 square mts (26 mts length and 9.5 mts breadth). After inspection the inspected garments are delivered to the washing section. Here inspection is carried out on the wider flat tables and in smaller slanding tables.

9.1.8 Washing section
Washing section has an area of 255 square mts (15 mts length and 17 mts breadth).
Washing is a value addition process. So, enough care has to be taken depends upon the types of washing required like silicon wash, stone wash, acid wash, sand wash enzyme wash etc. Washed garments are hydro extracted, dried and then sent for the final inspection. In the washing section, there is a 100 kg capacity washing machine, two hydro extractor of each 50 kg capacity, two driers of each 50 kg capacity along with the other accessories.

9.1.9 Final Inspection, Ironing, Packing and Carton Storage section Here the garments are thoroughly inspected so that the garments which have defects are altered or rejected. After the inspection the garments are ironed and then packed as per the customer specifications. Packing is more critical, so, enough care is to be taken to pack neatly, gently and attractively. Then the garments are packed in the cartons and stored in the carton storage area and exported altogether. The area of the total section is about 390 square mts (15 mts length and 26 mts breadth).
9.1.10 Sampling Section The sampling section is the backbone of any clothing company. Here various types of samples are made according to the customer enquiry. The style, design and colours of the garments vary depends upon the season, fashion and nation. The area of sampling section is about 75 square mts (15 mts length and 5 mts breadth). There are 4 single needle machines, 3 double needle machines, 2 feed of arm machine 2 overlock machine etc for the purpose of making samples
9.1.11 CAD Room CAD room has an area of 120 square mts (15 mts length and 8 mts breadth) CAD room has a clothing CAD with plotter which is more useful in garment manufacture. It also has a Fabric CAD, scanner and printer Clothing CAD helps to develop the patterns according to the customer’s specification with lot of accuracy. CAD is provided with a plotter for printing markers or patterns. Using CAD the fabric consumption can be calculated, also new patterns can be designed, old manual patterns can be put in, can make markers which will save the fabric by increasing the marker efficiency. CAD takes less time and can store a number of patterns which can be seen back when we need it.
9.1.12 Testing Lab Testing lab has an area of 255 square mts (15 mts length and 17 mts breadth).
Since shrinkage is a major problem in the garment industry, it is required to check it randomly so as to give a relative tolerance for shrinkage. This lab consists of a laundro meter, thickness gauge, crock meter, gsm balance, thread counters, beesley yarn balance, seam tester, strength tester, pilling tester etc to check the fabrics and the garments. Here some sort of research works like developing new finishes etc are carried out. In the testing lab, different types of finishings will be carried out under the chief chemist so as to get some new look and handle on the garment and this will be sent to the buyers mentioning the details of it.
9.1.13 Office There is a lengthy area while entering the building, after leaving the path.
There is about 171 square mts (28.5 mts length and 6 mts breadth) on each side which are allotted for the office, board of directors, managing director, general manager, merchandisers, administration, accounts departments and export/import department.
There is a separate conference hall is provided for meetings with the buyers.
9.1.14 Electrical Room In this room the electrical equipments and generators are provided for proper power supply with the capacity of high voltage. This room has an area of about 75 square mts (15 mts length and 5 mts breadth). There is an electrician to watch the power etc.
9.1.15 Canteen / Rest Room for Staffs/workers A canteen has been provided for the refreshment of staffs and workers.
There is also a rest room for staffs and workers so as to freshen a little at the interval time. Area is 112.50 square mts (22.50 mts length and 5mts breadth).
9.1.16 Toilet
There are two separate toilets for men and women workers with an area of about 75 square mts (15 mts length and 5 mts breadth) with adequate facilities.
9.1.17 Security office
There are two security offices on either side of the front compound wall with an area of about 48 square mts (8 mts length and 6 mts breadth) each.

COST ESTIMATION

10.1 Land and Building

LAND REQUIREMENT

22 grounds = 22 X 2400 = 52800 square 52800 X 0.0929506 = 4907.80 squre = 4908 square mts
LANDCOST

Rs.4 lakhs per ground X 22 Grounds = Rs.88 lakhs

BUILDING REQUIREMENT

3900 square mts = 3900 X (3.28X3.28) square feet

= 41958 square feet

= 42000 square feet

BUILDING COST Building Cost = Rs.575 per square feet Therefore 42000 Square feets X Rs.575 = RS 2,41,50,000 Building Cost = 241.50 lakhs

TOTAL LAND AND BUILDING COST = 241.50 + 88.00 LAKHS TOTAL LAND AND BUILDING COST = 329.50 LAKHS

Labour DIRECT LABOUR Category of Workers | No. of workers | Salary per worker | Total salary in Rupees | Tailors – skilled | 73 | 3000.00 | 2,19,000.00 | Tailors – semi skilled | 83 | 2500.00 | 2,07,500.00 | Button hole/Button m/c operator | 4 | 3000.00 | 12,000.00 | Pocket creaser, collar/cuff turner | 5 | 2000.00 | 10,000.00 | Fusing m/c operators | 1 | 3000.00 | 3,000.00 | Cutting m/c operators | 4 | 3500.00 | 14,000.00 | Ironers | 10 | 2000.00 | 20,000.00 | Packers | 5 | 3000.00 | 15,000.00 | Garment checkers | 10 | 2000.00 | 20,000.00 | Fabric checkers – skilled | 2 | 2500.00 | 5,000.00 | Fabric checker – semi-skilled | 6 | 1800.00 | 10,800.00 | Helpers | 50 | 1500.00 | 75,000.00 | Layers | 6 | 2000.00 | 12,000.00 | Store keepers | 2 | 4000.00 | 8,000.00 | Washing Assistant | 1 | 3000.00 | 3,000.00 | Mechanics | 2 | 3000.00 | 6,000.00 | Electrician | 1 | 2500.00 | 2,500.00 | Office boys | 4 | 1500.00 | 6,000.00 | Watch and Ward | 4 | 1500.00 | 6,000.00 | Sweepers | 3 | 1500.00 | 4,500.00 | Total Direct Labour cost per month | 6,59,300.00 | Add Benefits @ 20% | 1,31,860.00 | Total Direct Labour cost per month including Benefits | 7,91,160.00 | Total Direct Labour cost per Annum including Benefits | 94,93,920.00 | Total Direct Labour cost per Annum including Benefits = 94.94 lakhs |

Factory supervision Category of Staffs | No. of staffs | Salary per staff | Total in Rs. | Production Manager | 1 | 15,000.00 | 15,000.00 | Cutting Master | 1 | 12,000.00 | 12,000.00 | Q.C.Incharge | 1 | 8,000.00 | 8,000.00 | Washing Incharge | 1 | 7,000.00 | 7,000.00 | Supervisors | 9 | 6,000.00 | 54,000.00 | Factory Supervision cost per month | 96,000.00 | Add Benefits @20% | 19,200.00 | Total cost of Factory Supervision per month | 1,15,200.00 | Total cost of Factory Supervision per Annum | 13,82,400.00 | Total cost of Factory Supervision per Annum = 13.82 lakhs | | Category of Staffs | No. of staffs | Salary per staff | Total in Rs. | | | | | Accounts/Admn Manager | 1 | 8000.00 | 8,000.00 | Assistants | 2 | 4000.00 | 8,000.00 | Export/Import Manager | 1 | 8000.00 | 8,000.00 | Assistants | 2 | 4000.00 | 8,000.00 | Fabric Merchandisers | 2 | 5000.00 | 10,000.00 | Garment Merchandisers | 2 | 7000.00 | 14,000.00 | Total Salaries per month | 56,000.00 | Add Benefits @ 20% | 11,200.00 | Total Salaries per month including Benefits | 67,200.00 | Total Salaries per Annum including Benefits | 8,06,400.00 | Total Salaries per Annum including Benefits = 8.06 lakhs | 10.2 Machinery Estimation of Machinery Required and Cost Estimate Details of Machine | Quantity | Cost per M/c in US$ | Total CostIn US$ | Single Needle Lock Stitching m/c [Juki DDL-5530N] | 104 Nos | 460.00 | 47840.00 | Double Needle Lock Stitching m/c [Juki LH-3168SF] | 52 Nos | 1850.00 | 96200.00 | Feed of Arm Machine [Juki MS-1190MF] | 7 Nos | 1950.00 | 13650.00 | Overlock Machine [Juki Mo-3316E DE4-40H] | 1 No | 900.00 | 900.00 | Button Holing Machine [Juki LBH-781U] | 2 Nos | 2700.00 | 5400.00 | Button Sewing Machine[Juki LK-1903SS/304/MC-590-3K] | 2 Nos | 3850.00 | 7700.00 | Fusing Machine [Hashima HP-400CS] | 1 No | 3510.00 | 3510.00 | Pneumatic Pocket Creasing m/c | 1 No | 4320.00 | 4320.00 | Collar Turning Machine [TSSM TS-414] | 2 Nos | 900.00 | 1800.00 | Cuff Turning Machine [TSSM TS-424] | 2 Nos | 900.00 | 1800.00 | Edge Cutter [Eastman EC-3] | 2 Nos | 450.00 | 900.00 | Straight Kife Cutter [Eastman 629 X 8”BS-11] | 2 Nos | 1125.00 | 2250.00 | Banned Knife Cutter [Wastema] | 1 No | 12000.00 | 12000.00 | Cloth Drill [Eastman CD-3-6”] | 1 No | 800.00 | 800.00 | Total value in us dollars | 199070.00 | Total Value in Indian Rupees @ Rs.47 per dollar | 9356290.00 | Details of Machine | Quantity | cost per m/c in Rs. | Total in Rs | Testing Equipments | 1 set | | 500000.00 | Ironing Table Set-ups [Ramsons] | 10 sets | 25900.00 | 259000.00 | Fabric CAD with Scanner/printer | 1 set | 75000.00 | 75000.00 | Clothing CAD with Plotter | 1 set | 475000.00 | 475000.00 | Washing m/c (100kg ) with 2 Hydro Extractors (50kg) & 2 Driers (50kg) | 1 set | 1800000.00 | 1800000.00 | Hand Scissors | 20 Nos | 300.00 | 6000.00 | Total Cost for Machinery in Indian Rupees = 1,24,71,290.00 [124.70] lakhs] | 11.4 Others (Furniture etc) | Trolleys for Material Handling | 45000.00 | Plastic Bins | 40000.00 | Cutting Table/Assorting Table/Checking Tables | 45000.00 | Other Furnitures | 30000.00 | Total Cost for Furnitures etc in Indian Rupees = 1,60,000.00 [1.60 lakhs] |

Total cost of the project

Particulars | Rs. in lakhs | LAND | 88.00 | BUILDING | 241.50 | MACHINERY | 124.70 | FURNITURES ETC | 1.60 | ELECTRICALS/GENERATOR | 4.00 | TRANSPORTS/ERECTION | 1.00 | PRE-OPERATIVE EXPENSES | 1.70 | WORKING CAPITAL (2 MONTHS) | 99.40 | OTHER MISCELLANEOUS ASSETS | 5.60 | TOTAL | 567.50 |