Fashion, apparel, textile, merchandising, garments

1. 35$ Leather Garment : An Opportunity Area in Export trade B. Chandrasekaran CLAD, CLRI

6. India’s Export Performance of Leather Garments Projected for 12 months The trend indicates that a vast section of Indian leather garment industry is unable to compete with other market forces for finished leather from India on cost considerations. The percentage of finished leather export in low price segment is decreasing.

7. Garment Export During Last 3 Years Quantity FOB

8. Region Wise India’s Export Performance During 1999-2002 Quantity in Million Pieces FOB in Million US$ 415 9.39 404.7 10.52 284 7.37 Total 17.4 0.370 16.5 0.364 14.6 0.31 West 3.44 0.115 3.02 0.097 2.04 0.09 Central 20.1 0.846 19.4 0.81 13.6 0.63 East 249.0 5.65 246.4 6.50 167.5 4.38 North 124.9 2.41 119.5 2.75 86.6 1.96 South FOB Quantity FOB Quantity FOB Quantity 2001-2002 2000-2001 1999-2000 Region

9. Region Wise India’s Export Performance 2001-02 Export Performance USD 415 million Total of 383 units Number of Units

10. Export Trend in 2001-02: Various Garment Types Quantity FOB

11. Export Trend in 2001-02: Targeting Countries Quantity FOB

12. Export Trend in 2001-02: Market segmentations of North/South regions of India North = 249 million US$ with a Peak value of about US$ 85 million To USA and Germany US $ 40 million South = 125 million US$ with peak value of US $ 32 million to Italy and US $ 29 million to Germany

13. Average Price Realization (US $) and Market Segmentation of different Regions of India in global trade 44 38.3 38.5 Combined 47 45 47 West 30 31 23 Central 24 24 22 East 52 43 44 South 44 38 38 North 2001-02 2000-01 1999-00 Region

14. Region Wise Export During April-Jan in 2002 and 2003 Values in Million US$ -32.47% 100.00% 218.2 100.00% 323.12 Total -33.45% 7.18% 15.7 7.28% 23.5 Others 2233.33% 0.01% 0.028 0.00% 0.0012 Central -40.73% 32.55% 71.0 37.09% 119.8 Northern -41.17% 5.44% 11.9 6.25% 20.2 Eastern -36.63% 7.65% 16.7 8.15% 26.3 Western -22.74% 47.17% 102.9 41.23% 133.2 Southern Total Export 2002-03 Total Export 2001-02 % Variation Share in Apr-Jan Share in Apr-Jan Region

15. India and China: Their Growth paths in leather In 1983 export of leather sector of India and China was at par at US$ 1.0 and 0.9 bn respectively. In 2002, India has grown to US 2 bn with the support of all. China’s export has grown from US 9.5 to 19 bn in seven years since 1995. Exclusive of non leather shoes, this increase is 4.9 billion since 1995. How has this happened? We chose different paths for growth. China turned global. We turned inward.China made integrated investments. We spread our efforts thin and wide. FDIs and Large Scale path China chose. We relied on SME route and brand market products without brands

18. Strategic positioning of India in leather garment An Area of Need Planning Ahead

20. Positioning in low priced volume segment An important priority: Developing strength in US$ 35 garment

21. Costing for a Climber Gent’s Garment Cost of Garment Rs 2900 (US$ 58) Share of leather 70% 40 sq.ft. Including wastage Rs 50 per sq.ft

23. 35$ Garment (Manfred formal): Leather

24. 35$ Garment (Manfred formal): Leather 1713.00 Grand Total 60.00 Labor charges 275.50 Overheads (20%) 1377.50 Total 14.00 7.00 2 nos Lining thread (spun poly) j) 32.00 4.00 8 nos Press/snap button i) 6.00 1.00 6” Pocket Zip fastener h) 48.00 2.00 24” Zip fastener g) 10.00 Adhesive f) 15.50 350 m Thread (100% cotton) e) 10.00 10.00 1 pair Shoulder Pad d) 10.00 10.00 1 m Reinforcement (fusing) c) 40.00 20.00 2 m Wadding b) 52.00 26.00 2 m Polysatin Lining a) Accessories II 1140.00 30.00 38 sq.ft. Leather: New Zealand Sheep Nappa (Including wastage 4 sq.ft.) I Amount Rs. Unit Price Rs. Quantity Costing Particulars Sl. No.

25. 35$ Garment (James Dean): Leather + Nylon

26. 35$ Garment (James Dean): Leather + Nylon 1696.80 Grand Total 60.00 Labor charges 272.80 Overheads (20%) 1364.00 Total 6.00 1.00 6” Pocket nylon zip g) 48.00 2.00 24” Metal zip YKK brass f) 10.00 10.00 1 m Fusing material e) 10.00 Adhesive d) 20.00 Cotton thread c) 10.00 10.00 1 pair Shoulder Pad b) 80.00 40.00 2 m Cotton drill Lining a) Accessories II 100.00 28.60 3½ sq.ft. Nylon Rib 1080.00 30.00 36 sq.ft. Leather: Upgraded New Zealand Sheep Nappa (Including wastage 5 sq.ft.) I Amount Rs. Unit Price Rs. Quantity Costing Particulars Sl. No.

27. 30$ Garment (Manfred Casual): Low grade Sheep Nappa

28. 30$ Garment (Manfred Casual): Low grade Sheep Nappa 1400.80 Grand Total 60.00 Labor charges 218.80 Overheads (20%) 1121.00 Total 32.00 4.00 8 Nos. Press Button 7/7 h) 6.00 1.00 6” Pocket zip g) 48.00 2.00 24” Metal zip YKK brass f) 10.00 Adhesive e) 25.00 500 m Cotton thread d) 10.00 10.00 1 pair Shoulder Pad c) 10.00 10.00 1 m Reinforcement (fusing) b) 80.00 40.00 2 m Cotton drill Lining a) Accessories II 900.00 25.00 36 sq.ft. Leather: Low grade sheep nappa (Including wastage 4.5 sq.ft.) I Amount Rs. Unit Price Rs. Quantity Costing Particulars Sl. No.

29. 25$ Garment (Jackson): Leather + Wool

30. 25$ Garment (Jackson): Leather + Wool 1194.00 Grand Total 60.00 Labor charges 189.00 Overheads (20%) 945.00 Total 14.00 7.00 2 nos Lining thread (spun poly) k) 10.00 10.00 1 m Elastic tape j) 8.00 4.00 2 pairs Press/snap button i) 6.00 1.00 6” Pocket Zip fastener h) 52.00 2.00 26” Zip fastener g) 10.00 Adhesive f) 15.50 350 m Thread (100% cotton) e) 10.00 10.00 1 pair Shoulder Pad d) 10.00 10.00 1 m Reinforcement (fusing) c) 40.00 20.00 2 m Wadding b) 52.00 26.00 2 m Polysatin Lining a) Accessories II 162.50 9.55 17 sq.ft. Wool 555.00 30.00 18½ sq.ft. Leather: New Zealand Sheep Nappa (Including wastage 1½ sq.ft.) I Amount Rs. Unit Price Rs. Quantity Costing Particulars Sl. No.

31. 21$ Garment (Aviatar): Cow split suede + Jute

32. 21$ Garment (Aviatar): Cow split suede + Jute 1016.00 Grand Total 60.00 Labor charges 159.40 Overheads (20%) 797.00 Total 14.00 7.00 2 nos Lining thread (spun poly) k) 10.00 10.00 1 m Elastic tape j) 8.00 4.00 2 pairs Press/snap button i) 6.00 1.00 6” Pocket Zip fastener h) 52.00 2.00 26” Zip fastener g) 10.00 Adhesive f) 15.50 350 m Thread (100% cotton) e) 10.00 10.00 1 pair Shoulder Pad d) 20.00 10.00 2 m Reinforcement (fusing) c) 40.00 20.00 2 m Wadding b) 52.00 26.00 2 m Polysatin Lining a) Accessories II 93.75 7.20 13 sq.ft. Jute 465.75 23.00 20¼ sq.ft. Leather: Cow split suede (Including wastage 1 sq.ft.) I Amount Rs. Unit Price Rs. Quantity Costing Particulars Sl. No.

33. 13$ Garment (Marvel): Cow split suede

34. 13$ Garment (Marvel): Cow split suede 617.00 Grand Total 20.00 Labor charges 99.50 Overheads (20%) 497.50 Total 40.00 2.00 20” Metal zip YKK e) 7.50 15.00 ½ m Fusing material d) 5.00 Adhesive c) 15.00 Cotton thread b) 39.00 26.00 ¾ m Satin Lining a) Accessories II 391.00 23.00 17 sq.ft. Leather: Cow split suede (Including wastage 2 sq.ft.) I Amount Rs. Unit Price Rs. Quantity Costing Particulars Sl. No.

37. Global Market of garment trade – Simulation I with 65% below US$ 40 price Current Production of India ~ 10 million pieces Projected Production of India ~ 18 million pieces (installed capacity) Global Production ~ 120 million pieces 5 5 10 15 30 15 10 10 Global (Assumed) 5.6 7.8 15.6 18.3 18.3 18.9 13.9 5 Suggested for full capacity utilization 10 13 26.2 30 8.14 3.64 2.17 4.87 India (Calculated) >70 60-70 50-60 40-50 35-40 30-35 25-30 < 25 US$/Garment % Share on various price range

38. Global Market of garment trade– Simulation II with 70% below US $ 40 Current Production of India ~ 10 million pieces Projected Production of India ~ 18 million pieces (installed capacity) Global Production ~ 120 million pieces 5 5 10 10 30 20 10 10 Global (Assumed) 5.6 7.8 15.6 18.3 18.3 18.9 13.9 5 Suggested for full capacity utilization 10 13 26.2 30 8.14 3.64 2.17 4.87 India (Calculated) >70 60-70 50-60 40-50 35-40 30-35 25-30 < 25 US$/Garment % Share on various price range

39. Global Market – Simulation III Current Production of India ~ 10 million pieces Projected Production of India ~ 18 million pieces (installed capacity) Global Production ~ 120 million pieces 5 5 10 10 20 30 10 10 Global (Assumed) 5.6 7.8 15.6 18.3 18.3 18.9 13.9 5 Projection 10 13 26.2 30 8.14 3.64 2.17 4.87 India (Calculated) >70 60-70 50-60 40-50 35-40 30-35 25-30 < 25 US$/Garment % Share on various price range

40. India’s Vision for Challenging Global Market – Simulation I, II, III

46. Strategic Material Sourcing 10 Million Pieces in 35$ Garment Leather alone Price Range ~25-35 Rs/Sq.ft. Requirement ~33 million sq.ft. Available ~15 million sq.ft. Indigenous sourcing 50% Remaining 50% Sourcing leathers from foreign countries Admixing leather with wool or jute Creating new sources from lower ends/split leathers 35$ = Rs 1750 75% leather = Rs 1310 1 garment = 40 sq.ft. 1 sq. ft. = Rs 33

47. Material : Design Material Optimization Design element Panel sizes Design/ forecast services CLRI/ NID/NIFT CLRI

48. Market Study ITPO CLRI CLE Industry

51. Sourcing & Indigenous Development of Inexpensive and Right Leathers Way forward for Market positioning and Fuller utilization of capacities

52. Thank You

53. Upgradation of Leather: Costing Total cost/sq.ft. Price Finishing Price Wet finishing Price Raw material

54. India’s Vision for Challenging Global Market – Simulation I Based on a simulated average price of US $ 37-38 per piece and a trade of 120 million pieces

55. India’s Vision for Challenging Global Market – Simulation II

56. India’s Vision for Challenging Global Market – Simulation III