Indian Spinning Industry

A PROJECT ON THE SPINNING INDUSTRY OF INDIA

BY  Deepak Luniya Roll No: 290

Mentor Teacher in charge Mr. R. K. Singh Mrs. Renu Agarwal

CONTENT  _____________________________________  __________________ _________________________  ______  INDUSTRY PROFILE ……………………….………………04 I.

INTRODUCTION……………………………….……………05

II.

PRODUCT CHARACTERIZATION………………………..05

III.

INDIAN SPINNING AND TEXTILE INDUSTRY…....…06

IV.

SPINNING COMPANIES IN INDIA…………………….…06

V.

SHARE IN GDP……………………………………..………..07

VI.

ECONOMIC TREND…………………………………..……..08

VII.

DOMESTIC PRODUCTION…………………………………08

VIII.

FOREIGN EXPORTS………………………………………..10

IX.

SICKNESS OF TEXTILE MILLS…………….……………..11

INTRODUCTION OF THE COMPANY……..…………….…..…………..13 ORGANISATION CHART………………………………….……...……...15 LAYOUT OF THE COMPANY……………………………..………..……17 PRODUCTION DEPARTMENT…………………………….…………….19 QUALITY CONTROL DEPARTMENT.………… DEPARTMENT.…………………….……… ………….…………….25 …….25 PURCHASE DEPARTMENT……………………………….……….…….27 SALES DEPARTMENT…………………………………….….…………..30 ACCOUNTS DEPARTMENT…………………………….….…………….33 HUMAN RESOURCE DEPARTMENT……… DEPARTMENT…………………..….…… …………..….……………37 ………37 CONCLUSION…………………………………………...…….…………..40 BIBLIOGRAPHY…………………………………………….……………42

CONTENT  _____________________________________  __________________ _________________________  ______  INDUSTRY PROFILE ……………………….………………04 I.

INTRODUCTION……………………………….……………05

II.

PRODUCT CHARACTERIZATION………………………..05

III.

INDIAN SPINNING AND TEXTILE INDUSTRY…....…06

IV.

SPINNING COMPANIES IN INDIA…………………….…06

V.

SHARE IN GDP……………………………………..………..07

VI.

ECONOMIC TREND…………………………………..……..08

VII.

DOMESTIC PRODUCTION…………………………………08

VIII.

FOREIGN EXPORTS………………………………………..10

IX.

SICKNESS OF TEXTILE MILLS…………….……………..11

INTRODUCTION OF THE COMPANY……..…………….…..…………..13 ORGANISATION CHART………………………………….……...……...15 LAYOUT OF THE COMPANY……………………………..………..……17 PRODUCTION DEPARTMENT…………………………….…………….19 QUALITY CONTROL DEPARTMENT.………… DEPARTMENT.…………………….……… ………….…………….25 …….25 PURCHASE DEPARTMENT……………………………….……….…….27 SALES DEPARTMENT…………………………………….….…………..30 ACCOUNTS DEPARTMENT…………………………….….…………….33 HUMAN RESOURCE DEPARTMENT……… DEPARTMENT…………………..….…… …………..….……………37 ………37 CONCLUSION…………………………………………...…….…………..40 BIBLIOGRAPHY…………………………………………….……………42

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INDUSTRY PROFILE

Introduction Spinning is the conversion of fibers into yarn. These fibers can be natural fibers (cotton) or manmade fibers (polyester). Spinning also entails production of manmade filament yarn (yarn that is not made from fibers). Final product of spinning is yarn. Cotton value chain starts from Ginning that adds value to it by separating cotton from seed and impurities. Spinning is the foundation process and all the subsequent value additions i.e. Weaving, Knitting, Processing, Garments and Made ups, depend upon it. Any variation in quality of spinning product directly affects the entire value chain.

Product Characterization The process of making fabric from raw cotton is a long one and consists of various stages. There are two technologies available to spin the yarn, first and the foremost is Ring Spun and second is Open End. With the development in technology, and changing need of people world over different types of cotton yarns like 100% cotton compact yarn, 100% organic cotton yarns, 100% cotton mercerized yarns etc. have been developed which are used to manufacture a wide variety of cotton fabrics and clothing. Mostly ring spun yarns are used for producing fine quality clothing, bed linens, bed sheets, bed spreads, pillow covers etc., while open end yarns are used for manufacturing denim wear, towels, etc This is similar to treating different diseases with different medicines. Like a wrong medicine can prove hazardous for the heath of a patient, in a similar way a wrong choice of yarn will result in the creation of the wrong type of fabric or clothing. The basic difference between the yarns is their count. Different counts are used to make different type of fabrics. In some cases, the cotton yarn is blended with some other yarn in different ratios to provide different effects like shining or to lend more elasticity to the yarn. It is the yarn count and the twisting mode of the yarn that actually determines the overall strength and look of the manufactured fabric. 100% cotton compact yarn and 100% cotton mercerized yarns have less hairiness and the fabric made from these is of  fine quality are is used for manufacturing luxury clothing and bedding The count of Yarn can vary from 2’s to 72’s , the higher the number, the finer the yarn is.

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The Indian Textile and Spinning industry The Indian textile industry is one the largest and oldest sectors in the country and among the most important in the economy in terms of output, investment and employment. The sector employs nearly 35 million people and after agriculture, is the second-highest employer in the country. The Indian Spinning Industry is an integral part of the Indian Textile Industry. •

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India claims to be the second largest manufacturer as well as provider of cotton yarn and textiles in the world India holds around 25 percent share in the cotton yarn industry across the globe India contributes to around 12 percent of the world's production of cotton yarn and textiles India covers 61 percent of the international textile market In terms of spindleage, the Indian textile industry is ranked second, after China, and accounts for 23% of the world’s spindle capacity

Spinning Companies in India The spinning industry is dominated by large units and it has been able to undergo significant modernization since the 1990s. The main factors behind the modernization include lowering of custom duties and other restrictions on imports of machinery and equipment and lowering of restrictions on imports and exports of raw cotton and yarn. The spinning industry, which is dominated by medium and large units producing more than 90 percent of the output and total value added. During an early period of policy reform (1983–1990), the demand increased due to spurt in exports, which caused better  utilization of existing spindles and led to reduction in idle capacity. During later phase (1990–2005), the investment in new spindles increased at a very rapid rate. This lead to rise in efficiency of the working spindles and relative productivity of working spindles compared to the most recent technology improved over time The units in spinning sector are relatively less as most of the units in this segment belong to large sector. This becomes clear as units belonging to cotton and synthetic spinning in

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terms of value added accounts for 22.4 per cent in the total value added in textile and clothing sector. The high share in value added compared to units is mainly because of  dominance of medium and large units in spinning sector. The share of large units in total value addition in cotton and synthetic spinning sector accounts for 86.1 per cent. A few of the large spinning mills with their capacity are: Company Vardhaman Group  Nahar Group Bannari Amman Spinning Mills Limited Sangam Group Malwa Cotton Spinning Mills Sambandam Spinning Mills Ltd

Capacity 8,00,000 Spindles 3,70,000 Spindles 2,20,000 Spindles 1,93,920 Spindles 1,40,000 Spindles 1,10,000 Spindles

There are1834 cotton/man-made fiber textile mills (non-Small Scale) in the country with 37.07 million spindles, 4, 89,718 rotors and 56,524 looms.

Share in GDP

Its importance is underlined by the fact that The Textile industry accounts for around 4% of Gross Domestic Product, 14% of industrial production, 9% of excise collections, 18% of employment in the industrial sector, and 16% of the country’s total exports earnings. The Spinning sector, which is integrated to the Textile industry accounts to 22.4% of the total value of the Textile Industry

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Economic trends The Textile industry has been witnessing a massive upsurge in the recent years. The industry size has expanded from USD 49 billion in 2006-07 to USD 65 billion in 200910. During this era, the local market witnessed a growth of USD 15 billion, that is, from USD 30 billion to USD 45 billion

Domestic Production

The Production of Yarn has been on the rise. Raw material has been less with respect to the demand for Spun Yarn. The prices of Cotton Hank Yarn increased by 32.5% in Oct. 2010 in comparison to the prices of Oct. 2009. The consumption of the Raw material i.e. Cotton and the production of yarn have been going up gradually.

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The share of medium and large units in total value added of the sector is 92.8 per cent whereas their share in value of output is 90.2 per cent. These units employ around 66  percent of the total labor engaged in the spinning sector.

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Foreign Exports The textiles industry accounts for 14% of industrial production and accounts for nearly 12% share of the country's total exports basket. The Government fixed the target for  2008-09 at US $ 26.55 billion an increase of 20% over the actual performance of US$ 22.14 billion in 2007-08, for export of textiles. However, no targets were fixed for 20092010. At present, Indian textile industry holds 3.5 to 4 percent share in the total textile  production across the globe and 3 percent share in the export production of clothing. USA is known to be the largest purchaser of Indian textiles.  Nearly half of Indian export was accounted by eight countries namely Bangladesh, Egypt, China, Portugal, Italy, Turkey, Iran and South Korea Russia (In order of export value). Last year, the proportion was accounted by only seven countries namely Turkey, Bangladesh, Brazil, Egypt, Italy, South Korea and Peru

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The prices of Yarn export have been increasing with no sign of relief due to the recent increase in demand after a lull period in 08-09.

SICKNESS/CLOSURE OF TEXTILE MILLS

The incidence of sickness and closure in the organized textiles industry is a matter of  concern. Textiles being the oldest and the largest industry of the country, it is but natural that at any given point of time some textiles units could be lying sick / closed. One main reason of sickness is structural transformation resulting in the composite units in the organized sector losing ground to power looms in the decentralized sector, on account of  the latter's greater cost effectiveness. Other causes of sickness/ closure of the industry include low productivity due to lack of modernization, stagnation in demand and inability of some units to expand in the export market, increase in the cost of inputs, difficulties in getting timely and adequate working capital and the availability of power, labour  disputes, excess capacity, failure to diversify in emerging areas, poor management, etc.

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The Spinning Industry in India is on set to hit the global market with other fabrics as well like the cotton textiles with its enthusiasm and consistency in work. It has already reached a phenomenal status in India by beating the obstacles that caused a downfall since past few years and is now on its way to cover a wider area in the spinning sector.

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COMPANY REPORT

 Jayalakshmi Textile Company Jayalakshmi Textile Company was started by Mr. Gopal Kumar Makara who was the Cotton Waste recycler and trader in Kolkata. In 1987 he along with this brother engaged in a business of waste cotton processing. In 1997 he came to Coimbatore to expand his business and opened a branch office of  Shree Jagadamba Textile Company (SJTC) and continued to work of trading in Waste.

He realized that there is a great scope of yarn manufacturing, so to give a start he purchased 2’s plant which I also known as condenser plant. It is a  proprietorship Company for which all the documentation is up to date and all the details are satisfactory. Jayalakshmi Textile Co. was incorporated under  the Companies Act of 1956(code No 103) in the year 31.03.1999 within a  period of 6 months production started. The financial assistance was rendered  by “The South Indian Bank Limited” and term loan from SIPCOT (State Industrial Promotion Corporation of Tamilnadu Limited).

The Company was granted license for a production capacity of 1050 spindles, out of which now the company has the capacity of 816 spindles. Over the years the company has achieved commendable performance.

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ORGANISATION CHART

The Company follows a Functional organizational structure. Each person is assigned a job with a specific function and is a specialist in it. The organizational chart of  the company is:

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LAYOUT OF THE COMPANY

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PRODUCTION DEPARTMENT

The process of Manufacturing involves the following steps:

Raw Material (Waste Cotton) Willowing Teasing Carding Simplex Spinning Reeling Bundling

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The Company has obtained License (No 5/cy.92) in the year 1999 for manufacture of cotton yarn.

The Mill produces high quality of yarn in overall Textile Market. The Mill Yarn,  production is various counts like 2’s, 3’s etc.

Mixing: There are various stages involved in Mixing Department. The following are some of the stages.

First Stage (Willowing): In this process, there is a Machine named WILLOW Machine. Its work is to clean waste and cleans the picked material. The Machine consists of long needles.

Second State (Teasing): In this stage, there is a Machine named TEASING Machine. It opens the PC waste and cleans it further. This Machine also consists of Needles which are sharper and installed on wooden plates.

 Third State (Mixing): This is one of the vital stages of mixing process. In this process mixing is done in 70:30 (i.e.) 70% cotton waste, 30% PC Waste. For the best Mixture the mixed materials is carried out through the Teasing Machine.

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Carding:

At the Carding Department, the cotton is completely opened into divided yarn. It is cleaned by removal of dirtiness and foreign matter and sliver produced suitable for  subsequent process. A Sliver is one drum full of cotton fibers. For this process c1/3 and LC.300 Machines are used. The delivery rate is 17 meters /min and the one sliver will be filled within 45 Min.

Simplex Department: At the simplex the thickness is reduced and the given sliver is hoist and wound on the bobbins. The production of the simplex depends on the spindle speed; twist per  inch (tp’) number of spindles etc., the weight of one bobbin is 1 kg. For the process LF 1400 and TS15 Machines are used. In one Machine 120 bobbins are produced.

Spinning Section: The Next is the spinning process, where the roving bobbins are fed to a drafting system, which converts roving into yarn. For this process LRG5/1 and LR6 Machines are used and there is another Machine MOTMANAT Ruck 21C doing the same process but it is automatic and speed is high. It takes 1 hour for 2000 spindles 1 spindle = 0.22 kgs 1 shift = 12 hours Therefore, production For 1 shift = 2000 x .22x12 = 5280 kgs. [22]

Spinning Department play major role in the production side to produce yarn in various types of counts.

1) 100% Cotton Yarn 2) Staple Yarn

100% Cotton Yarn:

100% cotton yarn means without blending (Mixing) and manmade fibers, if the yarn is produced with cotton fiber only, then it is known as 100% cotton yarn. This yarn is generally produced on order.

Staple Yarn:

With the blending of manmade fibers like polyester, viscose fibers, staple yearn are produced. This type of yarn has more shining and strength.

Reeling Section: In the reeling section the yarn from spindles is converted into hanks (knots). The Reeling Machine can lodge 20 spindles at a time. It takes 20 minutes for  the production of 20 knots which is equal to 4.54 kgs.

The final product of the reeling section is transferred to bundling section.

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Bundling Section:

This department consists of a Machine named BUNDLING Machine. A  bundling Machine can accommodate 20 knots at a time. 20 knots make a  bundle. The knots are pressed and tightened with a help of a twine.

20 bundles are taken together in a HDPE bags (High Density Poly Ethylene) and it is called as Chippam or a bale. These bundles are packed properly.

1 Bundle = 4.54 kgs Therefore 20 bundles = 90.8 kgs (91 kgs) Therefore 1 chippam = 91 kgs Approximately 60 Chippams are produced in a shift

Warehousing: The Chippams are then moved to the warehouse till they are ready to be shipped. The Godown Keepers maintains a record of the number of units which have come in during every shift and the number of units dispatched to every client.

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QUALITY CONTROL SECTION

The quality control section plays an important role in the industry. It fixes the standards, supervises whether the work is done properly so the quality cotton is  produced. The central testing laboratory fixes the proper standards of cotton to  be produced. The job of the unit is to produce cotton according to the prescribed quality.

8 Filters are involved here with Quality Manager as its head. There is filter for  carding, spinning and simplex who looks after the work done by the employees. The filters come directly under the control of Quality Manager. Random samples are collected from each shift and are examined by the Quality Manager  himself every day.

Department Willowing and

Teasing Department Carding Department Spinning Department Simplex Department Bundling and Reeling Department

Filter

Number of employees

1

9

2 2 2

29 29 29

1

9

In mixing department the quality control section checks whether the mixing of  cotton is done properly. In the next process, it checks the slivers. The sliver  must be of  6 yards in length. The carding waste must not exceed 6% of the total cotton. Apart from this the simplex department is checked every two hours. This is done main to control the drawing speed of the simplex as required.

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PURCHASE DEPARTMENT

Raw Materials:For the production process the Waste Cotton is used as a Raw Material. Daily 132 bales are used for production process and each bale is weighted around 80-

90 kgs and the three different length of fibers are 40mm, 44mm are used for   production process, mostly 44m

are used as raw material for production

 process. Raw materials are purchased on daily basis based on consumption. This Company generally purchases its Raw Material from Gangothri Textiles. The general price is around Rs. 5 for cotton waste and Rs. 8 for polycot (PC) waste. The Merchants provide a trade discount of 50 paise per kg and another  50 paise if the payment is made within 3 days from the date of delivery of  goods.

Machinery and Spares:To obtain a material for a department the following procedure is followed. 1) The department filter (head) finds out reasons of repair in the Machine. 2) He reports to the Quality Manager  3) Quality Manager gives the form to store 4) If it is available in store, they give it right away if not the form is counter 

signed by the Factory Manager and the General Manager and forwarded to the Purchase Department. 5) Now the Purchase is made. [28]

Purchase is usually of three types. There are

1) Through quotations:

Purchase of heavy and expensive machinery is done by the mill itself. They get quotations from various companies and open a tender. On a specified date the tender with lowest cost will be selected and purchases made with the corresponding company, mode of payment, mode of delivery, insurance etc. are also discussed there in.

2)

Spares Purchase:

Purchase of spares for the machinery is generally done from a dealer already fixed earlier by the management who is mostly the vendor of the machinery.

3) Emergency Purchase:

The General Manager is entitled to use his vested powers in case of any emergency purchase.

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SALES DEPARTMENT

MARKETING:Marketing is a task of creating, promoting and delivery of goods and services to consumer and business. Sales, product, price and place are mainly considered for  good marketing

The unit manufactures cotton yarns. The main market of this yarn is in the organized sectors as well as in the un-organized sector where it will be used in large quantities by the handloom and the power loom sector in the production of  cheap durries and rough industrial cloth.

The main weaving centers are located in Pallipalayam, Komarapalayam, Erode, Thiruchengode and Bhavani. These areas account for the major  consumption of cotton yarn in Tamil Nadu.

The company has already very well established market for its goods and achieves maximum sales. The demand is from leading industrial groups and cloth manufacturers, whose requirements will be sufficient to consume the company’s  production.

CUSTOMERS: The main customers to Jayalakshmi Textile Co. are K.K.B. Pvt. Ltd., Jeeva Textiles in Erode etc. Sales are also made through the National Handloom Development Corporation (NHDC).

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Customer Satisfaction is ensured by considering various things. 1. Quality of the product 2. Cost of the product. 3. Delivery time of the product. 4. Free Transportation Charge There are many competitors in this field and it is more likely to be hit by emerging competition and new technologies.

Few competitors are

1. Super Spinning Pvt. Ltd. 2. Ajay Mills Pvt. Ltd. 3. Premier Mills Pvt. Ltd.

Wastage Sales: The waste cotton generated is sold to the domestic customers on a tender basis. The average price obtained is around Rs. 2 to Rs. 3 per kg.

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ACCOUNTS DEPARTMENT

This Department is a very vital department. They maintain all accounting and cost details of the company. They maintain day to day income and expenditure of the company. This department is headed by the General Manager Finance. Under the financial director comes the manager in charge of accounts, manager in charge of costing, the purchase and the sales department.

1)

Accounts Manager: This Manager is in charge of preparing the balance sheet of the company.

The various books this manager maintains are Purchase Book, Sales Book, General Ledger Book, Computerized Cash Book, Ledger, Budgetary Control, Stock  Ledger, Income and Expenditure Account Book, Debtors/Creditors book. All these books are maintained by the Accounts Manager and he gives to the management the day to day accounts for the day and the month and year. It is his duty to maintain the entire account books with proper care. All the accounts must  be perfect. 2)

Costing Manager: Costing Manager maintains the store ledger and other cost related books.

The material inwards and issues are posted to various materials accounts work is  progress and finished goods are valued and recorded in separate books. Product costing is adopted by the bill of materials, labour overhead; at last all the accounts are submitted to the auditors.

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Basis of preparation of financial statements: 1) The financial statements have been prepared in compliance with all material aspects of the mandatory accounting standards issued by the ICAI and the relevant provisions of Companies Act, 1956. 2) Accounts were prepared under historical cost convention, on the basis of  going concern concept, with revenues and recognized and expenses accounted for on their accrual.

3) Fixed Assets They are stated at cost.

4) Investment: Long –term investments are stated at the cost of acquisition. Current investments are stated at lower of cost or fair market value.

5) Depreciation a) Depreciation of FA (other than those costing up to

Rs. 5000) has been

 provided pro-rata in straight line method.  b) Premium paid on lease hold lands/properties are amortized over  respective lease period. 6)

Gratuity, leave salary and other terminal benefits: Gratuity, leave salary and other terminal benefits are accounted for on the  basis of the prevailing wage rate at the end of the year.

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7)

Govt. Grants: The Grant received is accounted for on cash basis. The balance of unutilized grant at the year end is shown as current liability.

8)

VAT: VAT is accounted for by reducing purchase cost of related material in cases where credit for the same is availed.

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HUMAN RESOURCE DEPARMENT

In any organization, the role of Human Resource is very important. Without Human Resources, the activities of the organization cannot be performed and the objectives cannot be reached.

The Human Resource Manager plays a very big role. The Human Resource Manager is the head of the department. He is responsible for the recruitment and training of employees. The manager ensures that there is no vacancy in the organization. The department maintains personal records of each and every employee and all statutory records under various aspects.

The Human Resource manager is the link between the Workers and the management. The workers communicate to the management for various reasons through the human resource manager.

Time Keeper:

The time keepers maintains the timings, to which employees come to work. The company has 2 shifts. Morning Shift Time – 8:00 A.M. to 8:00 P.M.  Number of Employees – 115 Evening Shift Time – 8:00 P.M. to 8:00 A.M.  Number of Employees – 100

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The department ensures that the employees come to work in time and ensure  proper reasons are furnished for every no-show. It maintains a list of workers, working in both the morning shift and the evening shift.

Work Environment: 1. Jayalakshmi Textile Co. has identified and provided the work environment needed to achieve product quality, safety and environmental production. 2. The factory is located at very peaceful place and has ambient surroundings. This allows the workers to relax during the breaks. 3. The work environment is best suited for the firm. The work environment meets all the statutory requirements of the firm. 4. The factory site is protected by 2 watchmen. Necessary medical and first aid

kits are available at the factory site itself. So, in case some accidents take  place, the workers can be provided with the basic medical aid necessary immediately. 5. All workers are covered under insurance by a policy from New India Assurance Limited with a policy amount of Rs. 1, 50,000.

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CONCLUSION

In the field of textile industry, they face a stiff competition in exporting yarns to foreign countries. By exporting, the government earns a huge amount of foreign exchange. The main aim of the industry is to produce the right product at the right time to meet the ultimate customers. I had good experience learning about the company. Learning about the various departments and their functioning was knowledgeable and this would certainly help me in the future.

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