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