CHAPTER 1

INDUSTRY PROFILE

Human beings have relied on clothing and food to survive ever since they appeared on
earth. The clothing or textile industry thus began very early in human history. While early people
used their hands to weave and knit cotton or wool into fabric or cloth, it was not until the late
18th and early 19th centuries that the Industrial Revolution changed the way of making clothes.
People started to use various kinds of energy to supply power. Nevertheless, cotton, wool and
cellulose fibers remained the major raw materials. Since the Second World War, the production
of synthetic fibers developed by the petrochemical industry has increased tremendously

After the exclusion of global quota scheme, the textile industry is flourishing at high
speed. The world is on a new corridor of industrial revolution. Analysts are anticipating more
expansion with latest technologies in Textile Machineries. The textile machinery manufacturing
hubs like China, Germany, Italy, Switzerland and India have already jumped in gigantic
competition to craft and bid best technologies in textile machineries. Demand for sophisticated
machines that produce high quality cloth is increasing.

1. TEXTILE INDUSTRY PROFILE

1.1 GLOBAL SCENARIO

The Textile & Clothing trade in the global market is fast changing with the scaling up of
uses of textiles in diverse areas. Asian countries including India play a dominant role in the
international trade of the global market. China has the major share in textile and clothing trade in
the international market etc. Both Bangladesh and Hong Kong have a significant share.
However, India is still on the back seat. It is reported that Asian counties export most of textile
and apparel to Europe and North America and USA etc.

The textile industry is an ever-growing market, with key competitors being China, the
European Union, the United States, and India. China is the world's leading producer and
exporter of both raw textiles and garments. The United States is the leading producer and
exporter of raw cotton, while also being the top importer of raw textiles and garments. The
textile industry of the European Union comprises Germany, Spain, France, Italy, and Portugal
at the forefront with a value of more than 1/5th of the global textile industry, and it is currently
valued at more than USD 160 billion. India is the third-largest textile manufacturing industry
and holds an export value of more than USD 30 billion. India is responsible for more than 6%
of the total textile production, globally, and it is valued at approximately USD 150 billion.

There are many developing countries ready to crack or climb this list in the near future as
their investment into the textile or garment industry increases. Countries such as Pakistan, Sri
Lanka, Samoa, and a number of South American countries have seen considerable growth in
their textile markets in recent years. As China moves towards a service-based economy, and
labor prices continue to rise, it is logical to assume many garment producers will move away
from China and into developing markets where labor is cheap and readily available.

Asian countries are gaining in textile trade due to lower costs compared to African,
European and South American countries. As per the Global Textile and Apparel Industry: Vision
2015, World textile and apparel trade is expected to reach US$805bn by 2015 from US$650bn in
2010. At present few countries like Bangladesh, Thailand, Cambodia, Sri Lanka, Pakistan
contribute major share in For example earnings of their country from Textile and Clothing trade,
though their share in the world market is not very significant.

In the year 1995, WTO had renewed its MFA and adopted Agreement on Textiles and
Clothing (ATC), which states that all quotas on textile and clothing will be removed among
WTO member countries. Despite the early onset of the trend towards globalization in the global
textile and clothing industry, international trade in the sector was and still is heavily regulated.
For instance, up to the end of 2004, the WTO Agreement on Textiles and Clothing (ATC), which
superseded the Multifibre Arrangement (MFA), was in force. Both limited the global trade in
textiles and clothing by imposing quotas. Although now these have been abolished. However the
level of exports in textiles from developing countries is increasing even if in the presence of high
tariffs and quantitative restrictions by economically developed countries. Moreover the role of
multifunctional textiles, eco-textiles and customized textiles are considered as the future of the
textile industry.
1.2 INDIA TEXTILE INDUSTRY

Textile industry in India is the second largest employment generator after agriculture. It
holds the significant status in Indian asset provide. It is the one of the earliest industry come into
existence in India and it account for more than 50% of total exports. It was predominantly
unorganized industry even a few years back, but the scenario started changing after the economic
liberalization of Indian economy in 1991. The opening up of economy gave the much-needed
thrust to the Indian textile industry, which has now successfully become one of the largest in the
world.

India textile industry largely depends upon the textile manufacturing and export. It also
plays a major role in the economy of the country. India earns about 27% of its total foreign
exchange through textile exports. Further, the textile industry of India also contributes nearly
14% of the total industrial production of the country. It also contributes around 3% to the GDP of
the country. India textile industry is also the largest in the country in terms of employment
generation. It not only generates jobs in its own industry, but also opens up scopes for the other
ancillary sectors. India textile industry currently generates employment to more than 35 million
people.

Indian textile industry can be divided into several segments, some of which can be listed as
below:

 Cotton Textiles
 Silk Textiles
 Woolen Textiles
 Readymade Garments
 Hand-crafted Textiles
 Jute and Coir

1.3 TEXTILE INDUSTRY IN KERALA

The first cotton textiles mill was established in 1883 in Kallai near Kozhikode by P.S
Santhappa Chettiyar and M. Guptan Namboothiripad, known as Malabar Spinning and Weaving
Mill. The commercial production was started in 1887. Later in 1976 the mill was taken over by
Government of Kerala and handled over to Kerala state textiles corporation. The second mill
presently called Parvathi Mills Ltd. was started in 1884 by James Darragan, an English man
using 19 acres of land donated by the Maharaja of Travancore. In 1888, the mill was sold to
another British industrialist named AT VIN. In 1932 the management was taken over by Kerala
Textiles Corporation. In April 1974, the mill was nationalized under sick textiles undertaking
(nationalization) Act and was made a unit of National Textiles Corporation (NTC) Limited
Bangalore, which is a subsidiary of NTC Delhi. Sitaram Textiles Ltd., another oldest mill was
established in 1903 as a Private Limited Company. Balarama Iyyer started it. Later due to
mismanagement and labor trouble, company was liquidated in 1954.

The factory was gutted down due to fire in 1959 and spinning production was completely
stopped. The Government of Kerala purchased this unit as a result of liquidation and public
auction in 1972, with the modest start of these mills, the number of cotton textile mill rose to 31.
The government of Kerala has announced in state assembly on March 29, 1994, its Willingness
to start 5 more spinning mills, one each of Kazargod, Kozhikode, Trissur, Kottayam and
Malapuram along with the commissioning of corporative spinning mill at Alappy with a spindle
capacity of 6000 spindles.

Cotton textiles industries are concentrated in district of Trissur and Palakkad followed by
Ernakulum and Kannur. These four districts together account for nearly 3/4 th of the spinning
mills in Kerala. The numbers of existing composite mills are quite low i.e., only four in number,
its growth during the last 10 years is nil. Due to the unprofitable nature of composite mill,
Malabar spinning and weaving mill discontinued its weaving operation and concentrated on
spinning only. Calicut modern spinning mill once turned sick is now taken over by a financially
sound third party and found earnings before the last, decade. There are 7 cotton textile mills in
Trissur including one composite mill. Kottayam stands last in the list with only one state owned
mill.

There are 16 private mill in Kerala of which 14 are spinning mills and the rest 2 are
composite mills. The national textile corporation has got under it, 4 spinning mills and 1
composite mill. The corporate sector owns only 2 spinning mills. In Kerala the Trissur
corporative spinning mills with an installed spindle capacity of 12,000 spindles is the smallest
mill followed by Kathayee Cotton Mills Limited with 14,860 spindles.
 Another welcome feature was that a 100% export oriented unit, Past Pin India Ltd.
Started commercial production at Palakkad. These units are located at Palakkad near Tamilnadu
border. Another corporative mill, Allepey Corporative spinning mill at Kayamkulam is yet to be
commissioned. Out of the 31 mills in Kerala, 14 are private sector, 8 under National Textiles
Corporation, 4 under Corporative Sector and 5 under K.S.T.C.