Start a Textile Industry in Germany

Prepared By: Bhavin Agrawal(02) Ishani Dave(14)

Nikita Balar(04) Nitin Madhvi(28)Malvi Bhatt(08) Kushal Mehta(31)

History of textile industry evolution in Germany

• After the end of the Second World War, the German textile and clothing industry experienced a boom. – The reason was a high demand for textile products and clothes,

which could not be covered with imports due to financial reasons.

• Since the mid-1960s the German textile and clothing industry has a downside trend concerning the number of companies and the number of workers. – The market and competition-conditions changed deeply in the

textile industry as well as in the clothing sector. As a result of this the degree of automation was raised

Geographic Location

Germany is made up of 16 different “states”

Baden-Württemberg, Bavaria, Berlin, Brandenburg, Bremen, Hamburg, Hesse, Mecklenburg-Vorpommern, Lower Saxony, North Rhine-Westphalia, Rhineland-Palatinate, Saarland, Saxony, Saxony-Anhalt, Schleswig-Holstein, Thuringia

Geography of Germany

• Germany has about 82 million inhabitants. It is by far the largest country in the EU in terms of population.

• Germany is a modern, cosmopolitan country.• Germany has the 4th largest economy in the world. • It is the 2nd largest exporter and 3rd largest importer. • Germans have established a very high standard of

living and social security.

Demographic details of GermanyParticular Details

Population 80,996,685

Age structure 0-14 years: 13% (male 5,386,525/female 5,107,336) 15-24 years: 10.6% (male 4,367,713/female 4,188,566) 25-54 years: 41.7% (male 17,116,346/female 16,664,995) 55-64 years: 13.6% (male 5,463,221/female 5,574,166) 65 years and over: 21.1%(male 7,468,552/female 9,659,265)

Urban population 73.9% of total population

Sex ratio total population: 0.97 male(s)/female

Nationality German(s)

Ethnic groups German 91.5%, Turkish 2.4%, other 6.1%

Religions Protestant 34%, Roman Catholic 34%, Muslim 3.7%, unaffiliated or other 28.3%

Particular Details

Major cities - population BERLIN (capital) 3.462 million; Hamburg 1.796 million; Munich 1.364 million; Cologne 1.006 million

Languages German (official)

http://www.indexmundi.com/germany/demographics_profile.html

Geographical Condition

• Initially, the industry was set up depending upon imported cotton and most of the industries were developed along Rhine river valley. But Ruhr industrial region soon became a leading textile centre.

Geographical Condition (Conti..)• North-Western: Consisting of Rhine region towns like Barmen and

Elberfield, and Ems-Vechta towns like Pheine and Gronau.

• Central: Consisting of towns along the three mountain ranges which separate Bohemia from Germany, Reichenbach, Chemnitz, Leipzig and Dresden

• South-Western: Consisting of towns like Augsburgh, Stuttgart and Mulhouse.– The north-western region had the advantage of local market in the

industrial populations which also provided it with cheap labour. The other centres had the advantage of water power, pure water and the cheap labour of the mountain populations.

Major Industries• One of the world's largest and most technologically advanced

producers of:– Iron, steel, coal, cement, chemicals, machinery, vehicles,

machine tools, electronics, food and beverages, shipbuilding, textiles

• Major Textile companies:– Amann & Söhne– J. P. Bemberg – Biederlack– Bremer Woll-Kämmerei– Butonia– Gustav Gerster– Steilmann

German Consumer

• The typical German consumer rejects the idea “discounts” shops and places value on quality

• Emphasis on safety, quality, comfort and reliability

Religion

• Religious freedom

• Protestant (33%), Roman Catholic (33%), Muslim (4%), 108,000 members of Jewish communities, and others

Norms & Policies

• STANDARDIZATION - The Textiles and Textile Machinery Standards Committee (Textilnorm) is in charge of establishing DIN standards for textiles, clothing as well as textile machinery. – The different DIN standards define the requirements,

dimensions, technical terminology as well as testing standards for special areas in the textile industry. Foreign companies must ensure that their textile products conform to all relevant standards in Germany.

Norms & Policies (Conti..)

• LABELING - The German Textile Labeling Law lays the foundation for the labeling of textiles on the market. All textiles manufactured, imported and sold in Germany must bear a label indicating their raw materials composition.– Even though care labeling symbols are not mandatory in

Germany, the National Association for Textile Care Labeling, GINETEX, has defined an internationally recognized care labeling system for textiles based on trademark symbols.

Norms & Policies (Conti..)• According to the REACh (Registration, Evaluation,

Authorization and Restriction of chemical products) Regulation of the European Union (1907/2006/EC), manufacturers and importers of textiles containing potentially dangerous chemicals must register these substances to the European Chemicals Agency (ECHA) and ensure the appropriate communication along the supply chain. – The main goal of REACH is to control the safety of chemicals in

consumer products, including textiles.

Norms & Policies (Conti..)

• CERTIFICATION - The most widely used and recognized certificate of quality for textiles in Germany and the EU is the Oeko-Tex Standard 100. This voluntary certificate provides the textile and clothing industry a uniform standard for consumers who specifically aim to buy textiles that are free of harmful substances. All raw materials, intermediate and end products at all stages of production are tested and certified for compliance with the standard.

SWOT AnalysisStrengths

• Increasing consumer consumption• Efficient and educated work force• Largest European economy

Weaknesses• High tax rates• Slow negotiations• Demanding employees

Opportunities• Location• Tax incentives• Introduction into European market

Threats• Mature market• Competition

PEST Analysis:-

Political Factor• Germany is a democratic republic.

• The political system functions under a system called Grundgesetz which was published in the 1949 constitutional document.

• The Social Democratic Party and the Christian Democratic Union leads the political system

• The legislature, the judiciary, and the executive are the 3 wings which make up Government of Germany.

Economic Factor

• Germany has comparatively low raw materials.• It only has potash and lignite in a significant

amount.• The service sector contributes 70% of the GDP.

Industry contributes 29.1% while agriculture backs 0.9%

• Automobiles, metals, machinery and chemical goods are some items they are proud of.

Social Factor

• The society is made up of variety of lifestyles as it is multicultural country.

• Despite the social changes, the family remains the most important social reference unit for germans.

• Young people have very close bonds with their parents

Technological Factors

• Germany is a very advanced country• It is spending a lot of money on research and

development.• There are national laboratories and also private

research companies.• The Ministry of Science and Technology is an

organization which coordinates and decided priorities for the national science and technology programs in Germany.

Situation of the textile and clothing industry in Germany

• In Germany more than 130 511 employees work in the textile and clothing sector.

• The production of textiles is dominated by Western-European countries in which Germany is at the 6th position.

• Germany is divided in West- and East-Germany– Labour costs in the West-German textile and clothing

industry are twice as much as in East-Germany

• In textile sector top-selling corporate groups in Germany are Adidas and Esprit.

• Factors behind success of textile sector in Germany are – High quality standards, which are the trademark of the German

textile and clothing industry. – Innovative ability of German businesses

• The demands towards the textile and clothing industry is very dynamic– Competition from Asia and Eastern-European-Countries like

Slovenia and Hungary.

Viewpoints about our Textile Business

• Competitiveness of the textile and clothing industry can only be obtained through a stronger market orientation in Germany

• Therefore celerity, creativity and flexibility are the factors of success for the German textile and clothing industry.

• Our main focus will be on providing high quality standards at initial stage because germans are more concern about it.

• Due to high competition our businesses will pursue a competitive strategy of a high number of product varieties, which in some parts are customised

Viewpoints about our Textile Business

• Right now, textile innovations are often created with a reference to new technologies.– For which Germany is very famous– Nanotechnology or also the communication technology

• For eg. Suits with integrated MP3-Players

• New innovative developments are also made concerning the functionality of clothes. – For eg. Development of a special silicone-matrix having a combination

of the active substances vitamin E, aloe vera and jojoba-oil embedded.• Besides the manual skills of the employees in the textile and

clothing sector, widespread and comprehensive knowledge is another factor of success which becomes more and more relevant.

• At Initial stage we will use production according to customer orders approach.– reduction of product and production risks– reduction of warehouse stocks and storage space – reduction of preliminary financing and financial services – New market opportunities are created through the individual

fabrication• Furthermore the use of this method in the production eases a

differentiation towards trade rivals.• In combination with a higher customer orientation this can lead

to competitive advantages and a stronger customer loyalty• We will not focus on the technical possibilities of industrial

made-to-measure clothing only we will also focus on emotional components and overvalues for the customers.

Thank You !!