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Jun, 2017

Business opportunity in garment manufacturing

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Why start a garment manufacturing business?

As per the Indian brand equity foundation research report on Indian textile industry, organized apparel segment is expected to grow at a rate of 13% every year for next 10 years. The factor which is responsible for increased spending is the increase in disposable income. The union ministry of textiles has a target of doubling textile exports in 10 years.

What things should be considered for exporting apparels?

For trouble free export of apparels, aspects such as apparel quality, high quality packaging, export documentation and financial aspects need to be considered.

  1. Not only the compliance with design is necessary but also the buttoning and stitches should be of high quality.
  2. Since it is cross border long distance delivery through carriers, focus on packaging is necessary.
  3. Export process also includes tedious documentation process.
  4. All payables and receivables are routed through major banks via trade finance preferably.

What is the typical manufacturing process?

Just like any other manufacturing process, garments production starts with design process and ends with packaging and dispatching.  The broad stages are as follows:

  1. Design stage – A manufacturer can have an in-house design team which creates new patterns to match the upcoming trends among consumers OR make as per the CAD design of customer who later sells garments under their brand name.
  2. Fabric selection – Once CAD model of the product is ready, a 10 x 10 inch fabric sample is ordered from the fabric manufacturer to get the feel of the material.
  3. Sample Yardage – After approval of the small sample, a 25 meter long sample yardage is ordered to make samples of garment for actual fitting and appearance.
  4. Production stage – The final garment sample is given for in-house mass production OR outsourced by giving labour charges.

What are the different types of machines required?

Garment production goes through a sequence of processes and requires Time – Work study to avoid bottlenecks during production. Typical machines required are:

  Machine name Purpose
1 Juki single needle – Auto Single line stitching of threads
2 Juki double needle – Auto For parallel stitching of threads
3 Feed of arm – Auto Multi thread stitching on heavy fabrics by folding fabrics
4 Placketing machine – Auto  
5 Bartacking machine – Auto Closing of buttonhole end, sewing on belt loops. Tight stitching.
6 Button hole machine – Auto Creates buttonholes and finishes the edges
7 Buttoning machine – Auto Creates buttonholes and finishes the edges. Button and needle are automatically positioned and threads are clipped
8 Fabric checking machine Checks the uniformity and quality of ordered fabric
9 Fabric cutting (band knife + hand) Works with hand feed to cut variety of shapes in a garment
10 Peripheral machines Other small  special purpose machines
11 Fusing machine Fusing of packing material and fabric to make shirt collars. Reduces bubbles in the collars and sleeves.
12 Ironing table – steam Easy positioning & holding of fabric. Finishes fabric and final product

What is the initial investment required?

The Initial investment will be allocated across machines, labour & real-estate.

  1. Each stage during the manufacturing process requires general and special purpose sewing machines. Total investment in machines will be in the range of 25-35 lakhs with at least 1 quantity of each machine.
  2. Textile industry is labour intensive and an equal number of labour workforce would be required to operate the machines. The role of a pattern maker is important.
  3. Property could be purchased or leased for setting up the unit.

What are the typical financing terms?

Financing options 1.       Working capital Finance ( 2 to 3 months of inventory can be financed)

2.       Equipment Finance

Schemes available Mudra scheme or Stand up scheme
Interest rate 10.5 – 11.5 %, depending on prevailing MCLR in various banks
Term Up to 7 years
Moratorium 6 months to 1 year
Prepayment At any point of time without any charges

 

You can also contact UdyogCredit for more details or any assistance in financing.

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