Textile Report

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A SUMMER PROJECT REPORT

ON

Comprehensive Study of all functionalareas of

SUPREME FILAMENTS LIMITED

SUBMMITED FOR

Partial fulfillment of the requirements of twoyears full time

Master of Business Management (MBA)

SUBMITTED BY

Biren J PatelRoll No: 35

(2005-2007)

SUBMITTED TO

R.K.COLLEGE OF BUSINESS MANAGEMENT(RKCBM)


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Affiliated with Saurashtra University MBAProgramme

Kasturbadham,Rajkot 360020 (Gujarat)

CONTENT

Preface--------------------------------------------------- (3)

Certificate----------------------------------------------- (4)

Acknowledgement------------------------------------- (5)

Executive Synopsis------------------------------------ (6)

Index----------------------------------------------------- (7)

R.K. College of Business Management 2


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PREFACE

The student of M.B.A. Sem-3 has to make a project report for the purpose

of our university examination. So, I have selected to make a report on the

Supreme Filaments Limited.

This has helped me to enrich their theoretical knowledge about the

working and functioning of all departments in the particular area of the

management and I have achieved this opportunity to do a project report.

In this report, I am very thankful to our Dr. Mita Vora, who gave me

important guidance to fulfill the need of the report.

And, finally I am also very thankful to the Project guide Mr. Ashok Gupta

has given me all the information which is required in this project report.



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ACKNOWLEDGEMENT

I am highly thankful to Mr. Ajay R Gupta for allowing me as a trainer for

summer training of 45 days i.e., from 1st May 2006 to 15th June 2006 in

addition to helping me in my practical studies at the M.B.A. Sem-3 and

study the entire organization and various aspects of managerial functions.

They provide me many details and enlighten me in preparation of this

project report.

I take this opportunity to thank our Director Dr. T. D. Tiwari and Dr. Mita

Vora who had guided me throughout the project and gave me valuable

suggestions and encouragement.



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EXECUTIVE SYNOPSIS

The Supreme Filaments Limited is one of the popular local company for

making a POY (Partially Oriented Yarn) and PTY (Polyester Texturised

Yarn), which is situated in Surat. It has two plants in village Kim and

Karanj and one office in Surat. The main aim of the company is to serve

better to the customers.

The Supreme Filaments Limited has several departments for particular

task i.e., administration, human resource, storage, and dispatch

departments. The company is distributing their products to the customers

in two ways directly to the customer and through a broker. The company

is having around 70 to 75 brokers for selling their products.

Since the major raw material is available indigenously, there is no need to

import the same. However, now since the company is moving towards

backward integration. They believe in specialization into their business



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segments and to become cost efficient to remain competitive in the

market.

INDEX

Chapter Subject Pageno.

1 Textile Industry1.1 Indian Textile Industry1.2 Textile Industry

1.3 History of Textile Industry1.4 Current Scenario For TextileIndustry

1.5 Latest News In Textile Sector1.6 Polyester Industry1.7 Advantages of Polyester

Vis--vis Cotton1.8 Per Capita Consumption1.9 Unique Characteristics of

Polyester Fiber vis--vis Cotton

Fiber

1011

1318

222526

2930

2 Introduction to the Company2.1 Business Overview2.2 History & Major Events

3435



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2.3 Business Strategy2.4 Brief Details About POY

Manufacturing Unit2.5 Infrastructure Facility

2.6 Future Prospects2.7 Licensed Installed capacity &

Capacity Utilization

3638

40

4848

3 Production Department3.1 Existing Product for PTY3.2 Proposed Product POY

5058

4 Human Resource Department

4.1 Recruitment4.2 Selection4.3 Training & Development4.4 Communication4.5 Performance Appraisal4.6 Compensation4.7 Employee Benefits & Services4.8 Organizational Chart4.9 Distribution Channel4.10 Department

63636464656666676768

5 Marketing Department5.1 Market For PTY & POY5.2 Competition5.3 Approaches to Marketing &

Proposed Marketing Setup5.4 Competitive Strengths5.5 SWOT Analysis

707172

7475

6 Finance Department6.1 What is Finance?6.2 Key Activities of the Financial

Manager6.3 Emerging role of Finance

Manager in India

8081

81



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6.4 Insurance 82

7 Suggestions 84

8 Conclusion 86

9 Bibliography & References 88

CHAPTER 1

TEXTILE INDUSTRY



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1.1 Indian Textile Industry

Textile Industry is one of Indias largest industries, after agriculture. It

provides direct employment to about 350 Lacs people.

Besides this, there are a large number of ancillary industries, which are

dependent upon this sector such as, manufacturing various machines,

accessories, stores, ancillary items and

Chemicals. Known globally for its skill and craftsmanship, the Indian

textile industry is also one of the largest export earners and accounts for

about 35% of the gross export earnings in trade. Trade restrictions have

hitherto kept the Indian textile industry from soaring to the height it is



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capable of, but this is expected to change post January 2005, as the quota

restrictions have been removed.

Textiles covers the following sub-segments: - 1) Fiber intermediates; P-X,

DMT, PTA, MEG, Caprolactum, Wood Pulp etc., 2)

Fibers: ginning and pressing of cotton, manufacture of PFY, NFY, Rayon

fiber etc. 3) Synthetic fiber/filament processing viz., drawing, texturising,

twisting etc., 4) Yarn: spinning cotton & blends on rotors and ring frames

5) Weaving/Knitting 6) Processing and 7) Distribution.

The Indian textile industry is large and diverse, unique for its coverage of

the entire gamut of activities ranging from production of raw material to

providing the consumers high value added products, such as fabrics and

garments. The key segments of Indian Textile Industry are divided into

Fiber, Yarn, Fabrics and Made-ups. The multi-fiber base of Indian textiles

comprises natural fibers such as cotton, jute, flex, silk, wool and coir, and

synthetic and man-made fibers from polyester, viscose, acrylic,

polypropylene and nylon. Though primarily cotton based, Indian textile

industry has a growing polyester sector and is active in processing linen,

wool and silk.

1.2 Textile Industry



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The textile industry occupies a unique place in our country. One of the

earliest to come into existence in India, it accounts for 14% of the total

Industrial production, contributes to nearly 30% of the total exports

and is the second largest employment generator after agriculture.

Textile Industry is providing one of the most basic needs of people and the

holds importance; maintaining sustained growth for improving quality of

life. It has a unique position as a self-reliant industry, from the production

of raw materials to the delivery of finished products, with substantial

value-addition at each stage of processing; it is a major contribution to the

country's economy.

Its vast potential for creation of employment opportunities in the

agricultural, industrial, organized and decentralized sectors & rural and

urban areas, particularly for women and the disadvantaged are noteworthy.

Although the development of textile sector was earlier taking place in

terms of general policies, in recognition of the importance of this sector,

for the first time a separate Policy Statement was made in 1985 in regard

to development of textile sector. The textile policy of 2000 aims at

achieving the target of textile and apparel exports of US $ 50 billion

by 2010 of which the share of garments will be US $ 25 billion. The

main markets for Indian textiles and apparels are USA, UAE, UK,

Germany, France, Italy, Russia, Canada, Bangladesh and Japan.

The main objective of the textile policy 2000 is to provide cloth of

acceptable quality at reasonable prices for the vast majority of the



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population of the country, to increasingly contribute to the provision of

sustainable employment and the economic growth of the nation; and to

compete with confidence for an increasing share of the global market.

1.3 History of Textile Industry

The textile industry, with its extremely long and rich history, has had a

massive impact on the world economy and the very evolution of modern

society. Weaving is believed to be one of the oldest surviving crafts in the

world today, the actual origins of which are thought to date back to

Neolithic times 12,000 years ago. Even before that time, the same

principle was used to interlace branches and twigs to form protective

fences, shelters and baskets. Once the practicality of interlacing these

kinds of materials was understood, further experimentation with other

natural materials probably produced the first basic fabrics and cloths.



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Early spinning

There seems little doubt that one of the earliest textile fibers available

for spinning into yarn and then weaving into cloth was wool from

sheep. The two stage spinning process requires that a fleece is opened

to form a sliver of fibers which can be drawn out to produce an

increasingly fine thread. This is then twisted to form a yarn. Our early

ancestors probably twisted a few fibers from a lock of wool to form an

extending length of yarn, which would be wound into a ball. At a later

stage the yarn was wound on to a stick and a simple flywheel added at

the lower end to produce a spindle. From this the spinning wheel

developed, invented first in India and then reaching Europe some time

in the late 14th century.

The first loom

The first "loom" is thought to have been something as simple as the

straight branch of a tree running reasonably parallel to the ground.

The lengthwise warp threads were hung from this, weighted at their

lower ends and the weft threads interlaced to form a very rough

cloth. A framework later replaced the tree branch to form a verticalloom, as used by the ancient Greeks, which was then switched to a

horizontal orientation. The ancient Egyptians are said to have

invented the shuttle for holding the weft and to have attached the



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warp threads to two sticks in order to part the threads so that the

shuttle could pass through.

Mechanisation

For centuries both the spinning and weaving processes were

traditionally carried out by hand in the home on a cottage industry

basis - weaving by men and spinning by women (hence the term

"spinster"). The impetus for a major reorganization in textile

production came in the 1700s as inexpensive, good-quality textiles,

imported from India and the Far East, gradually began replacing

European goods in international markets. The need was to increase

domestic production and lower costs by substituting the laborious

hand processes for more efficient machine operations. Many

important inventions took place during this period, often having

important spin-off effects on other parts of the overall process ofmanufacture.

In 1733 John Kay of Bury, England, introduced his "flying shuttle"

which speeded up the weaving process so much that output was

often doubled. The problem was that the supply of yarn from the

spinners was insufficient to keep pace with the increase in

production. The first improvement to the early spinning machines

came in 1737 when Lewis Paul and John Wyatt invented the roller

method of spinning which made the spinning of yarn possible

without having to work it with the fingers.



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In 1764, a Blackburn weaver and carpenter, James Hargreaves

invented the famous spinning jenny which by 1766 had been

improved to accommodate up to 100 spindles and so vastly

accelerated the spinning operation. This was followed by Sir

Richard Arkwright's spinning frame, which was powered by water

and became known as the water frame. Soon after in 1779 came the

spinning mule, invented by the spinner Samuel Crompton from

Bolton, combining the features of both the spinning jenny and the

water frame. The advances in spinning technology led in turn to a

bottleneck in weaving, as yarn was now being produced much faster

than it could be woven. The solution was to harness steam power to

drive the looms and it was Edward Cartwright, an Anglican

clergyman, who worked out how to do this. By the mid 1780s he

had produced the first steam powered loom.

Industrial Revolution

The mechanisation of spinning and weaving led to radical changes

in the organisation of the textile industry. Much of the new

machinery was too large and expensive to be run in a domestic

environment and the advent of steam power meant that factories and

mills sprang up near the coalfields in the Northern England counties

of Yorkshire and Lancashire - a period which marked the end of the

cottage industry and the start of the Industrial Revolution.



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The Industrial Revolution brought massive social and economic

change to people's lives and to the traditional handworkers was seen

as a threat to their very livelihood. They felt anger and resentment at

the unemployment they feared - feelings which were exacerbated by

a time of deep economic recession following the Napoleonic Wars.

The potential for violence turned into physical attacks on the mills

and factories between 1811 - 1813 when workers known as

Luddites began to smash the machinery they blamed for their

troubles. Yet the process of industrialisation went on unabated and

there were further developments in the textile industry with the

introduction of the jacquard loom for weaving intricate patterns and

experimentation with synthetic dye-stuffs. By the mid 19th century

Britain was leading the way as the greatest textile manufacturing

country in the world.

Hopton Mills

The location of Interface Fabrics' manufacturing plant in a

picturesque valley near Mirfeld is steeped in textile history. It was

the Wheatley family who arrived in the valley early in the 16th

century to begin their trade as clothiers and who built the oldest part

of the current premises in 1812 as a totally vertical textile mill. But

it was young Henry Wheatley who founded the company Henry

Wheatley and Sons in 1790 and who pioneered the manufacture of a



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superb range of ladies' apparel fabrics in cashmere and other rare

fibers. The business developed within the cycles of the textile

industry through the Industrial Revolution until the family sold the

business in 1964. John Wheatley Bell and his son David Wheatley

Bell are the 6th and 7th generations of the family business; they are

still landowners in the valley and are shareholders in the Hopton

Estates.

Interface Fabrics - or more accurately Camborne Fabrics as the

company was previously known - first became associated with

Hopton Mills in 1980. At this time David Wheatley Bell, using his

initiative to keep the mill productive, sold his looms to Hopton

Weavers Ltd, who then moved to Hopton Mills and became tenants

of Henry Wheatley & Sons. Hopton Weavers operated as

commission weavers and they began to undertake some of

Camborne's weaving, with some of the company's finishing being

handled by Henry Wheatley's finishing department which was

under-utilised. This relationship continued until August 1984 when

the parent company, Allied Textiles, decided that the mill no longer

fitted into its corporate plan and Camborne were able to purchase

the freehold site and buildings. Camborne's ownership of Hopton

Mills was the company's first experience of direct involvement in

weaving and cloth finishing.



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1.4 Current Scenario for Textile Industry

Developing countries with both textile and clothing capacity may be

able to prosper in the new competitive environment after the textile

quota regime of quantitative import restrictions under the multi-fiber

arrangement (MFA) came to an end on 1st January, 2005 under the

World Trade Organisation (WTO) Agreement on Textiles and Clothing.

As a result, the textile industry in developed countries will face

intensified competition in both their export and domestic markets.

However, the migration of textile capacity will be influenced by objective

competitive factors and will be hampered by the presence of distorting

domestic measures and weak domestic infrastructure in several developing

and least developed countries.

The elimination of quota restriction will open the way for the mostcompetitive developing countries to develop stronger clusters of textile

expertise, enabling them to handle all stages of the production chain

from growing natural fibers to producing finished clothing, The

OECD paper says that while low wages can still give developing countries

a competitive edge in world markets, time factors now play a far more

crucial role in determining international competitiveness. Countries that

aspire to maintain an export-led strategy in textiles and clothing need

to complement their cluster of expertise in manufacturing by

developing their expertise in the higher value-added service segments



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of the supply chain such as design, sourcing or retail distribution. To

pursue these avenues, national suppliers need to place greater

emphasis on education and training of services-related skills and to

encourage the establishment of joint structures where domestic

suppliers can share market knowledge and offer more integrated

solutions to prospective buyers.

The textile industry is undergoing a major reorientation towards non-

clothing applications of textiles, known as technical textiles, which are

growing roughly at twice rate of textiles for clothing applications and now

account for more than half of total textile production. The processes

involved in producing technical textiles require expensive equipments and

skilled workers and are, for the moment, concentrated in developed

countries. Technical textiles have many applications including bed sheets;

filtration and abrasive materials; furniture and healthcare upholstery;

thermal protection and blood-absorbing materials; seatbelts; adhesive tape,

and multiple other specialized products and applications. India must take

adequate measures for capturing its market by promoting research and

development in this sector.

The mood in the Indian textile industry given the phase-out of the quota

regime of the multi-fiber arrangement (MFA) is upbeat with new

investment flowing in and increased orders for the industry as a resultof which capacities are fully booked up to April 2005. As a result of

various initiatives taken by the government, there has been new

investment of Rs.50, 000 crore in the textile industry in the last five



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years. Nine textile majors invested Rs.2, 600 crore and plan to invest

another Rs.6, 400 crore. Further, India's cotton production increased

by 57% over the last five years; and 3 million additional spindles and

30,000 shuttle-less looms were installed.

The industry expects investment of Rs.1, 40,000 crore in this sector in the

post-MFA phase. A Vision 2010 for textiles formulated by the

government after intensive interaction with the industry and Export

Promotion Councils to capitalize on the upbeat mood aims to increaseIndia's share in world's textile trade from the current 4% to 8% by

2010 and to achieve export value of US $ 50 billion by 2010 Vision

2010 for textiles envisages growth in Indian textile economy from the

current US $ 37 billion to $ 85 billion by 2010; creation of 12 million

new jobs in the textile sector; and modernization and consolidation

for creating a globally competitive textile industry.

There will be opportunities as well as challenges for the Indian textile

industry in the post-MFA era. But India has natural advantages which

can be capitalized on strong raw material base - cotton, man-made fibers,

jute, silk; large production capacity (spinning - 21% of world capacity and

weaving - 33% of world capacity but of low technology); vast pool of

skilled manpower; entrepreneurship; flexibility in production process; and

long experience with US/EU (European Union). At the same time, there

are constraints relating to fragmented industry, constraints of processing,

quality of cotton, concerns over power cost, labor reforms and other



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infrastructural constraints and bottlenecks. E.g., cost of power was Rs. 8

per garment in India whereas in China it was only Rs. 2 per garment.

Further, for the benefit of exporters, there should be a state-owned cargo

shipping mechanism. Several initiatives have already been taken by the

government to overcome some of these concerns including rationalization

of fiscal duties; technology up gradation through the Technology Up

gradation Fund Scheme (TUFS); setting up of Apparel Parks; and

liberalization of restrictive regulatory practices.

Shri Kamal Nath, Union Minister of Commerce & Industry, has said that

India will take up the issue of non-tariff barriers (NTBs) in the World

Trade Organisation (WTO) Doha round of multilateral trade negotiations,

which are expected to gather steam from March 2005 onwards

On the eve of republic day president Kalam said that. "India is presently

exporting six billion U.S. Dollars worth of garments, whereas with the

WTO regime in place, we can increase the production and export of

garments to 18 to 20 billion U.S. Dollars within the next five years. This

will enable generation of employment in general and in rural areas in

particular. By tripling the export of apparels, we can add more than 5

million direct jobs and 7 million indirect jobs in the allied sector, primarily

in the cultivation of cotton. Concerted efforts are needed in cotton

research, technology generation, transfer of technology, modernization

and upgrading of ginning and pressing factories and an aggressive

marketing strategy."



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1.5 Latest News in Textile Sector

1 Ministry of finance has added 165 new textile products under duty

drawback schedule. The new products included wool tops, cotton

yarn, acrylic yarn, viscose yarn, various blended yarn/fabrics, fishing

nets etc. Further, the existing entries in the drawback schedule

relating to garments have been expanded to create separate entries of

garments made up of (1) cotton; (2) man made fiber blend and (3)

MMF. Separate rates have been prescribed for these categories ofgarments on the basis of composition of textiles.

2 After the phasing out of quota regime under the multi-fiber pact,

India can envisage its textile sector becoming $100b industry by

2010. This will include exports of $50b. The proposed targets would

be achieved provided reforms are initiated in textile sector and local

manufacturers adopt measures to improve their competitiveness. A 5-

pronged strategy aiming to attract FDI by making reforms in local

market, replacement of existing indirect taxes with a single

nationwide VAT, liberalization of contract norms for textile and

garments units, elimination of restrictions that cause poor operational

and organizational performance of manufacturers, was suggested.

3 The Union Minister Shankarsinh Vaghela said that the Board for

Industrial and Financial Reconstruction (BIFR) had approved

rehabilitation schemes for sick NTC mills at a cost of Rs 3,900 crore.

Of the 66 mills, 65 unviable mills have been closed after

implementing voluntary retirement scheme (VRS) to all employees.



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According to him, the government has already constituted assets sale

committees comprising representatives of Central and state

governments, operative agency, BIFR, NTC and the concerned NTC

subsidiary to effect sale of assets through open tender system.

4 Proposals for modernization of NTC mills have been made to the

consultative committee members, including formation of a committee

of experts to improve management of these mills. Even the present

status of jute industry was under the scanner of the consultative

committee.

5 The Government had announced change from the value-based

drawback rate hitherto followed to a weight-based structure for

textile exports that will discourage raw material exports and also

curtail the scope for misusing the drawback claims by boosting

invoice value of exports.

6 NCDEX launched its silk contract (raw silk and cocoon) on

Thursday, January 20,2005.. With this launch, the total number of

products offered by NCDEX goes up to 27.The launch of the silk

contract will offer the entire suite of fibers to the entire value chain

ranging from farmers to textile mills. With the objective of protecting

the interests of those affected but WTO agreements and globalization

process, Government of India jointly with NCDEX has adopted a

policy of encouraging future contracts of silk. The Ministry of

Textiles and the Central Silk Board (CSB) had decided to introduce

futures trading in mulberry cocoons and raw silk on NCDEX. The

basic purpose is to mitigate the risk associated with the changing

prices through an efficient price discovery mechanism. Futures



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trading on the NCDEX will provide an alternative trading avenue for

farmers, weavers and traders and help them make a better price

discovery for their produce. It will also help them to reduce risks

associated with price volatility through hedging CDEX. The basic

purpose is to mitigate the risk associated with the changing prices

through an efficient price discovery mechanism. Futures trading on

the NCDEX will provide an alternative trading avenue for farmers,

weavers and traders and help them make a better price discovery for

their produce. It will also help them to reduce risks associated with

price volatility through hedging

1.6 Polyester Industry

Due to population explosion, the growing demand for clothing needs of

people cannot be met by natural fibers like cotton alone because of the

limited availability. Thus, man-made fiber has a crucial role to play and

therefore, Indian market is fast gearing up to replace cotton by polyester

cloth and synthetic fabrics. Polyester is the only fiber that will be able to

address the global demand growth for fabric because:

Arable land for cotton production is limited. Output of cotton fiber

depends upon monsoon & other factors. 100% Polyester fabric is in

fashion due to bright colors



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Post January 2005 scenario, cotton yarn exports are expected to increase

thus reducing its availability in the domestic markets. The increase in

cotton yarn exports will leave more space for polyester in the domestic

markets. Polyester products and its blends have emerged as the fiber of

mass consumption because of its versatility, good process ability,

environment friendly properties and comparative cost effectiveness. As a

result, demand for synthetic fibers/yarns derived from petrochemicals is

increasing.

1.7 Advantages of Polyester Vis a- vis Cotton

For some years now, polyester has been eating into cottons share of

the market, bringing it down from 68% in 1992-93 to 49% in 2002-03. As

per the CRIS INFAC Annual Review Report on Man Made Fibers

November 2003, this trend is likely to continue because:

1) Domestic Markets Follow International Trends:

Domestic market trends generally follow the international markets.

In 2002, around 55 % of the fiber consumption in the global markets was

in the form of synthetics, followed by cotton and cellulosic at 38% and 5%

respectively. By contrast, the share of synthetics in the domestic markets

was 47%, with cotton at 49% and

cellulosic at 4% in 2002- 03.



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2) Limited Cotton Production Growth in the Domestic

Market:

India is among the top three cotton-producing countries. However,

as per the estimates of CRIS INFAC, domestic cotton production will

increase only marginally in the medium term, given the historical crop

data - cotton production over the past decade has increased at a mere 1.3

% CAGR, with relatively stable average yield levels. Acreage for cotton

production is limited and yield levels are expected to increase only

marginally.

Thus total production will only increase marginally. On the other

hand, among man-made fibers (synthetics and cellulosic), polyester has

shown the maximum growth in terms of production and demand. Going

forward, the capacity additions that are scheduled in the medium term will

ensure easy availability.

3) Increase in Cotton Yarn Exports will Leave More Space

for Polyester in the Domestic Markets:

Cotton yarn exports are expected to increase in the medium term,

especially after 2005, reducing its availability in the domestic markets.

India is amongst the largest exporters of cotton yarn in the world. The

increase in cotton yarn exports will leave more space for polyester in the

domestic markets.



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4) Price-Competitiveness of Polyester to Improve against

Cotton Yarn:

Cotton yarn is expected to become even less price competitive in

comparison to polyester, with excise and customs duties on polyester

getting cut, and the price differential between the two narrowing.

5) Healthy GDP Growth to Increase Purchasing Power:

GDP growth helps in estimating the purchasing power parity of a

country.

CRIS INFAC estimates that Indias GDP will grow at a healthy 5-6

% in the next five years. The GDP growth has averaged 5.84% from 1981-

82 to 2002-03.

An average GDP growth of 5.5 % is expected to give a 6.85 %

growth in fabric production. However, the relatively high elasticity of

demand could cause fluctuations in demand growth. Synthetics are likely

to grow at a higher rate, assuming that cotton crop would continue to grow

at a CAGR of 2.5 %, as it has done for the past 50 years. Given the higher

growth in fabric production and lower growth in cotton availability, GDP

will have a positive impact on synthetics growth.



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1.8 Per Capita Consumption:

1) India has a long way to go:

The average per capita consumption (PCC) of fabric in India is

much lower than in its neighboring countries. India has a huge potential

market, given that its PCC is as low as 1.4 kg as compared China (5 kgs),

Pakistan (3 kgs) and Indonesia (5 kgs). India has the advantage of a large

and growing domestic market, and a good GDP growth.

2) Rapid Urbanization - higher spend on clothing:

Of the total domestic population, about 70% is rural. Behavioral

patterns suggest that most of the fabric demand in this segment is need-

based. The urban demand, on the other hand, is also driven by fashiontrends, and favors more sophisticated textiles, and variety in designs and

colors. The average urban spend on apparel is higher than rural spend.

However, over the years, the clothing pattern in India has shifted. Mens

clothing consumption has moved from the traditional cotton-based wear to

synthetic fabrics.

Cotton dhotis are giving way to trousers (mostly made of polyester

or polyester blends). Likewise, women are moving from cotton saris to

synthetic saris or Punjabi suits made of synthetics.



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3) Non-Apparel Segment to Drive Polyester Demand:

In India, fiber is used mostly for apparel (93%), with demand from

the home textiles, automotive and industrial segments accounting for the

remaining 7%. By contrast, worldwide, the last three market segments

account for 59% of end use. In India, the demand from the non-apparel

segment is in a growth phase; its expected to grow at a high 20% per

annum. Polyester, given its high tenacity and strength, is the most suitable

fabric for these applications. Thus, demand for polyester is expected to

increase steeply from these segments.

Despite the high prices, polyester filament yarn continues to be

price competitive vis--vis cotton yarn of finer counts, which is re-iterated

by the CRIS INFAC MAN-MADE FIBERS UPDATE: JANUARY 2005,

which states that POY demand is expected to grow at nearly 5.6 % in the

medium term.

1.9 Unique Characteristics of Polyester Fiber Vis a

Vis Cotton Fiber

Polyester Yarns is a substitute for cotton and other synthetic yarnsbecause of its numerous advantages: Properties: PFY is more durable,

does not fade on exposure to sunlight or soap, has better abrasion

resistance, drape and crease recovery properties, and is wrinkle



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resistant. Hence, it is a preferred material for synthetic fibers

Improvements: Modifications in the properties of PFY have allowed it to

be used as a substitute for other natural and synthetic fibers. Some of the

disadvantages it had, such as poor comfort and a dull appearance, have

been overcome by texturising and the application of finishes during

processing Price competitiveness: Compared to other yarns, PFY prices

are lower. Some of the unique features of polyester fiber are:

- Strength

- Resistance to stretching and shrinking

- Resistance to most chemicals

- Quick drying

- Crisp and resilient when wet or dry

- Wrinkle resistant

- Mildew resistant

- Abrasion resistant

- Retains heat-set pleats and crease

- Easily washed



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CHAPTER 2

INTRODUCTION TO THE

COMPANY



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THE SUPREME FILAMENTS LIMITED

321, Super Yarn Market,Zampa Bazar,Surat-3.

PH: (0261) 2427784

(0261) 2418748

Address of Plant: -

THE SUPREME FILAMENTS LIMITED

1) Plot No. 211/2B-2C,

Hariyal Gaon,

Karanj,

Tal. Mandvi,

Dist. SURAT.

PH: (0261) 34761

2) 112,Phase 2,

Kim GIDC Ind. Estate,

Village kim,

Surat.



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2.1 Business Overview

The Company has been in the polyester industry for more than a

decade and since incorporation. They have been engaged solely into the

manufacture of Polyester Texturised Yarn. Their first unit was set up at,

Village Karanj (Surat) with an initial capacity of 600 T.P.A. in 1994-95

and with installation of one more texturising machine; the capacity was

doubled in 1995-96. Over a period of time, they have set-up three

texturising units with different manufacturing capacities i.e. Unit I with

1,200 T.P.A., Unit II with 5,200 T.P.A. & Unit III with 15,240 T.P.A. All

these capacities have been considered based on manufacturing texturised

yarn of 80 Denier.

However, considering the current product mix of 80 & 150 Denier

(70% of 80 Denier and 30% of 150 Denier), their total manufacturing

capacity approximates around 25,500 T.P.A. Their main product,

Polyester Texturised Yarn (PTY), is used in the process of weaving of

fabric used for suiting, shirting, dress materials, sari, hosiery, knitted

fabric, zipper fastener, curtain & industrial cloth as also to manufacturefancy yarn for high value dress materials and upholstery. The basic raw

material for manufacturing PTY is Partially Oriented Yarn (POY). With

an objective to avail benefits of backward integration by manufacturing



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POY, which is the key raw material for their existing product PTY, and

also to exploit the growing market for POY (which is expected to grow at

nearly 5.6% in the medium term as per the CRIS INFAC Annual Review

November 2003 Report), they are setting-up their fourth unit for

manufacturing Partially Oriented Yarn (POY) with an estimated total

capacity of 60,000 T.P.A. (capacity based on manufacturing average 150

Denier). Out of this total 60,000 T.P.A. of POY, about half of the

production (at a manufacturing capacity of 85%) will be used for

manufacturing PTY by ourselves, whereas the balance production will be

sold off in the domestic market. They have already received enquiries

from various local parties for purchase of POY and negotiations are on

with them.

2.2 History and Major Events

Money Market Limited: -

Company has mainly been engaged in the manufacturing of

Polyester Texturised Yarn. Company started manufacturing activities in

the year 1994, by installing one texturising machine with a manufacturing

capacity of 600 T.P.A. (capacity based on manufacturing Polyester

Texturised Yarn of 80 Denier) at first unit (Unit I) situated at Village

Karanj.



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In the year 1996-97, Company commenced setting-up of second

unit (Unit II) at village Kim for manufacturing Polyester Texturised Yarn

with a capacity of 2,600 T.P.A. (capacity based on manufacturing

Polyester Texturised Yarn of 80 Denier) by installing four Draw

Texturising machines.

In the year 1998-99, they started further expansion at Unit II, for

manufacturing Polyester Texturised Yarn with a capacity of 2,600 T.P.A.

(capacity based on manufacturing Polyester Texturised Yarn of 80 Denier)

by installing four Draw Texturising machines.

In the year 1999-2000, the funding assistance from The South

Indian Bank Limited was taken over by State Bank of India. In the year

2001-02, Company undertook another expansion project third unit (Unit

III) situated at Udhna. This expansion project was completed in two

phases. In the first phase, the installation of six texturing machines with a

manufacturing capacity of 7,590 T.P.A. (capacity based on manufacturing

Polyester Texturised Yarn of 80

Denier) was completed in June 2003.

In the year, 2003-04 itself, they further planned to move into backward

integration for production of POY, which is the key raw material for



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manufacturing Polyester Texturised Yarn, at their fourth unit (Unit IV)

this project was commenced with a manufacturing capacity of 30,000

T.P.A. (capacity based on manufacturing average 150 Denier of POY)

However, during the initial stages of the implementation of the

project, their Company found good potential in the demand of POY and

they also received business enquiries for purchase of POY itself.

Accordingly, our management decided to increase the capacity of the POY

project from 30,000 T.P.A. to 60,000 T.P.A. (capacity based on

manufacturing average 150 Denier of POY). The doubling of total

production capacity will be carried out by converting the winders with 2

thread lines into 4 thread lines and by carrying out other modifications,

accordingly as required in the overall project.

2.3 Business Strategy

As a business strategy, they believe in specialization into their

business segments and to become cost efficient to remain competitive in

the market. As part of implementation of the said strategy, since

incorporation, their Company has been engaged into manufacturing of

Polyester Texturised Yarn (PTY), and currently they have three existing

PTY manufacturing units with a capacity of 25,500 T.P.A. [considering



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the product mix of 80 & 150 Denier (70% of 80 Denier and 30% of 150

Denier)] at Surat in the Union Territory of Kim.

Further, to become cost efficient to remain competitive against their

competitors in the peer group, they have undertaken a backward

integration project for manufacturing of POY at Karanj with a

manufacturing capacity of 60,000 T.P.A. (capacity based on

manufacturing average 150 Denier of POY), which is one of the basic raw

materials used in the processing of Polyester Texturised Yarn. Company

has imported a second hand Barmag, Germany makes plant from USA

to manufacture POY.

Company has also appointed Mr. Ashok Gupta,Technical advisor, at

31st January 2005 to facilitate their backward integration project.

2.4 Brief Details about POY Manufacturing Unit

1) Location

The POY manufacturing unit is being set up at Village Karanj

(Surat).

The site is about 40 km from Surat the nearest railway station from theunit. This unit is located within 10 kilometers from our other existing

units.



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2) Land and Site Development

Supreme Filaments Ltd have already acquired a freehold land

measuring approx. 80,000 sq. meters at Village Kim (surat) for the POY

manufacturing unit. The land is non-agricultural in nature and is registered

in Company name. This land was acquired from Konark Developers. The

persons from whom the land has been acquired are not related to their

promoters / directors. The work of site leveling and development, laying

of compound wall and landscaping is in progress.

3) Building and Civil Work

They are constructing a factory building, which will consist of

production shop, raw material and finished goods storage, administrative

block and other amenities. Administration of Surat Town & Country

Planning Department gave the initial permission for construction of

factory building on 17th March 2004. However, after taking the decision

for the increase in the manufacturing capacity, they have received the

approval for revised building plan from the concerned authority.

They have appointed M/s. Joy Builders for the manufacturing unit,

who is monitoring the entire civil work.



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The construction of factory building is in progress and is expected

to be complete by January 2006. As per certificate received from VMS

Consulting Engineer dated 15th November 2005, civil work of the factory

building is completed to the extent of 90% and balance work is in

progress.

4) Plant & Machineries

The detailed break-up of Plant & Machineries required for the Project,

Plant & Machineries already received, orders placed for Plant &

Machineries and the quotations obtained for the balance Plant &

Machineries.

2.5 INFRASTRUCTURE FACILITIES:

1) Raw materials

The Company is presently engaged in the manufacture of Polyester

Texturised Yarn (PTY) and proposes to engage in the manufacture of

Partially Oriented Yarn (POY). The raw material requirements are asunder:



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For PTY:

The major raw material for manufacture of PTY is POY, which they

have been procuring from domestic suppliers viz. Reliance Industries

Limited, Indo Rama Synthetics Limited, Sanghi Polyester Limited, JBF

Industries Limited, Garden Silk Mills Limited, Gokulanand Textile

Industries, Nova Petrochemicals Limited, etc. However, there is an anti-

dumping duty on import of POY, due to which currently its import is not

financially viable.

Further, due to the abundant supply of the above raw materials from

the various manufacturers, Company would not have to depend on only

one or a limited number of suppliers/manufacturers. Since the major raw

material is available indigenously, there is no need to import the same.

However, now since Supreme Filaments Ltd moving towards

backward integration and setting-up their own POY manufacturing unit at

Village Kim, the future demand for POY shall be met out with this new

project only.

The other raw materials like antistatic Oil, Packing materials such

as Paper tubes, boxes, polythene bag, strapping rolls, etc. are also easily

available locally. They are already procuring the raw materials from

various suppliers for their existing operations; hence they do not foresee

any problems in procuring the required quantity of raw materials in future

also.



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For POY:

The major raw material for manufacturing POY is Polyester Chips.

These chips are crystallized, dried, extruded to manufacture POY, which

is further processed to manufacture PTY. There are various suppliers of

Polyester Chips in the domestic industry like Rajshree Polyfil, JBF

Industries Limited, Indo Rama Synthetics Limited, Modern Petrofil,

Reliance Industries, etc. Further, Polyester Chips can also be imported

freely.

The other raw materials like Packing material such as Paper tubes,

boxes, polythene bag, strapping rolls, etc. are also easily available locally

and Spin Finish Oil is easily available in the domestic market and can also

be imported freely.

With the abundant supply of the above raw materials (both for POY

& PTY) from various manufacturers, Company would not have to depend

on only one or a limited number of suppliers / manufacturers.

2) Utilities

a) Power



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Existing facilities (for PTY) Company has three Units for

manufacture of PTY. The connected power load of each of these units is

as

Under:

(a) Unit I: 500 KVA

(b) Unit II: 1400 KVA

(c) Unit III: 2500 KVA

The local authority of Surat, for which Company has the necessary

registration, provides the power facility. As a stand by arrangement,

Supreme Filaments Ltd installed D.G. sets of the following capacities at

the Units:

(a) Unit I: 380 KVA capacities

(b) Unit II: 1200 KVA capacity (Two D.G. sets of 600 KVA Capacity

each)

(c) Unit III: 1700 KVA capacity (Two D.G. sets of 600 KVA Capacity

each and one DG set of 500 KVA Capacity)

Requirement of power and its arrangements for the Project (for

POY)

The Estimated power requirement for manufacture of POY is

estimated at 7MVA, which will be provided by the local authority of

Surat. Company has already received an in-principle approval for 10MVA



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load on 66 KV systems from the Administration of Surat Electricity

Department. As a stand by arrangement, Company also Installed 5 D.G.

Sets of 4 X 1100 KVA & 1 X 1250 KVA.

b) Water

Existing facilities (for PTY)

The present manufacturing process does not require any water.

However, the cooling system requires water, which is met out through the

bore well. Further, the requirement of water for drinking and civic uses is

also met through the bore well.

Facility for the Project (for POY)

The manufacturing process will require only around 10 kiloliters

dematerialized water, however for industrial purposes we require water

around 390 kiloliters per day. Requirement of water for drinking and civic

uses will be around 100 kiloliters per day. Thus the total requirement of

water is around 500 kiloliters per day, which will be easily met through

the bore well.

c) Compressed Air, Fuel

Existing facilities (for PTY)R.K. College of Business Management 43


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Compressed Air is required to intermingle the yarn, which is

generated by air compressors. Company has already installed air

compressors at all the three existing units.

Facility for the Project (for POY)

Compressed air is required for machines as well as for

intermingling the yarn, which is generated by air compressors. Company

has already taken care of air compressors in the cost of project and the

same are being procured.

d) Transportation

Existing facilities (for PTY)

Company has three Units for the manufacture of PTY; two units at

Village Karanj and one unit at Village Kim. Further, the new unit at

Udhna for manufacturing POY is within 30 kms. From all the existing

units. Karanj is about 40 kms. From Surat, the nearest railway station.

Usually, most of the raw materials are purchased from depots at Surat,

Ahmedabad and Mumbai. Due to proximity of the new unit, Company

does not envisage any problem in transportation of POY from the new site

to our existing units at Surat. Similarly, Polyester chips, which are the

main raw material for manufacturing POY, can be procured either from

the neighboring cities or even can be imported, there are abundant



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transport operators and the necessary road infrastructure is in place to

facilitate easy transportation.

TRUCK / CONTAINER LOADS

16 KG BOBBIN 1X20 1X40 LOCAL TRUCK

No. Of Cartons 208 416 130

Gross Wt. (Tones) 13.7 27.5 8.7

Net Wt. (Tones) 12.5 25.0 7.8

e) Manpower

Existing arrangements at Existing Units (for PTY)

For three existing Units, which manufactures PTY, totally Company

has 81employees, details of which is mentioned hereunder:

Particulars No. Of Employees

Particulars No. of employees

Managerial, Technical and Supervisory Staff 17

Skilled 55

Semi Skilled & Unskilled 9

Total 81



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Further, Company has also engaged Semi Skilled & Unskilled contract

labour, which are around 125 in total.

At Company Registered Office Company has the following manpower

at the Registered Office:


Managerial and Supervisory Staff 11Office Staff 3

Peon 2

Total 16

For the New Project (for POY)

The additional manpower requirements for the new project are as here

under:


Managerial, Technical and Supervisory Staff 11

Skilled & Semi Skilled 91 91

Total 102



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The recruitment for the new project is already in process.

Semi-skilled and unskilled labour required for the new project, will be

recruited locally as per the requirement.

Further, Company do not envisage any difficulty in recruiting /

hiring additional manpower as and when required, as manpower is easily

available due to concentrated industrialization in the nearby areas.

2.6 Future Prospects

After completion of the current backward integration project for

manufacturing POY, they believe that they would be having better

margins for their existing product PTY. Further, they would be able to

cater to the additional demand of POY from other texturisers, who are into

manufacturing of PTY. Better margins along with additional sales of POY

will result into overall increase in sales volume along with better returns

for their shareholders.



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2.7 Licensed & Installed Capacity and Capacity Utilization:

No license is required under the Industries (Development &

Regulation) Act; 1951, therefore the details of licensed and installed

capacity are not applicable to us. However, we have filed the required

Industrial Entrepreneurs Memorandum (IEM) with the Government of

India, Ministry of Commerce & Industry, Secretariat for Industrial

Assistance and obtained the acknowledgement dated for our Project being

set up at Unit IV.

CHAPTER 3

PRODUCTION DEPARTMENT



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3.1 Proposed Product POY

Polymer in the melted form from polycondensation section is

cooled in polymer cooler, filtered and after pressure boosting it is

distributed to the spinning manifolds and then to the spinning positions.



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The polyester melt from spinning position is extruded through spinnerets

by variable speed driven spinning pumps. The extruded filaments are

cooled by precisely controlled conditioned and filtered air in quench

chamber. The filaments are then passed through the finish application

system. The filaments are taken on take up winders and finally wound on

bobbins. The yarn produced is extremely fine and the unit of fineness is

denier. The spinnerets and spinning manifold are jacketed and heated with

dowtherm vapour.

PRODUCT RANGE - PARTIALLY ORIENTEDYARN (POY)

Semi Dull Yarns with Round Cross-Section

Denier Filaments

80 34

100 34

115 34110 68

110 100

126 34

126 48

130 34

130 48

141 34

141 48

141 68

145 34145 48

150 34

235 34

235 48

245 68



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265 34

265 48

265 100

265 150

235 100235 150

350 34

470 68

530 68

All yarns are interlaced for high speed processing

PHYSICAL PROPERTIES

Product 115/34 235/34126/34

Denier Avg.2%

Avg. 2%

Tenacity (gpd) Min.

2.5

Min. 2.5

Elongation % Avg.5.0

Avg. 5.0

Finish % 0.05 0.05

Uster % Max.1.2

Max. 1.2

Producers sell POY to texturising units, which process POY and sell

it to weavers largely in the power-loom sector where it may be woven

with other yarns. Texturisers can be either spinner texturisers (POY

manufacturers who also have some texturising capacity) or independent



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texturisers. The unit, being set-up at Kim, will have a POY manufacturing

capacity of 60,000 T.P.A. of POY (capacity based on manufacturing

average 150 Denier), of which about half of the production (at a

manufacturing capacity of 85%) will be used for captive consumption for

manufacturing PTY, and the balance production will be sold off in the

domestic market. We propose to use Polyester Chips as a raw material for

manufacturing POY.

Manufacturing Process of POY


POLYESTER CHIPS UNLOADING& TRANSFER

WET CHIPS HOPPER


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CRYSTILIZER

DRYER

DRIED CHIPS HOPPER

EXTRUDER

CONTINUOUS POLYMER FILTER

MANIFOLD

QUENCHING CHAMBER

SPINNING BEAM

SPIN FINISH OIL APPLICATION

INTERMINGLING

WINDER

QUALITY & CHECKING


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Explanation of the Process POY: -

Company proposes to manufacture POY from Polyester Chips.

These chips are purchased from indigenous suppliers and stored in go-downs. The chips are then sent through pneumatic conveying system to

storage silos/hoppers from where they are fed to the wet chips hopper.

From wet chips hoppers chips are fed to the Crystalliser. The chips

are crystallized inside the Crystallizer where the crystalllinity of the chips

are increased before feeding into the Dryer so that lump formation does

not take place during drying.


PACKING & DESPATCH


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After that the crystallized chips are fed to the Dryer where hot air is

passed for reducing the moisture within chips. Moisture removal from

Polyester chips is very critical in regard to its running at Spinning and

subsequent processes The dried chips are then fed into the Dry chips

hopper (DCH) where a particular quantity of dried chips are stored and fed

to the Extruder through the pipeline for melting and extrusion.

In the Extruder, there are different heating zones, which are heated

with electric heating coils and the temperature in different zones is

controlled. The chips are melted in these zones and the molten polymer is

formed. The temperature and pressure control at all the stages is an

extremely important aspect of the melting process as this has impact on

the final properties of the yarn.

The molten polymers are then passed through the Continuous

Polymer Filter to trap any unwanted impurities of polymer. The filtered &

molten polymer is passed through the Manifold (melt distribution pipe) at

a particular temperature, which is maintained by Dowtherm Oil in vapour

form. This melt is then passed through the Spinning Beam at a particular

temperature and pressure, where a precise quantity of melt is taken by

Metering Pump and fed to the spin packs containing Filters and

Spinnerettes. From the Spinnerettes, polymer melt is extruded in the shape

of fine capillaries and cooled by cool and dust free air in quenches

chambers. Cool air solidifies the melt and the melt takes the shape of yarn.



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From Quench, the raw yarn is passed through Spin Finish Oil Applicators,

where spin finish oil imparts the lubricity, anti-static property in the yarn

for better performance in the subsequent process. After spin finish oil

application, the yarn passes through Inter Floor Tubes and is moved to

Intermingling Devices for intermingling, where air at a specified pressure

imparts knots in the yarn for better running on texturising machines. From

Intermingling devices, the yarn is moved to Take-Up Winders for winding

on paper tubes.

The above yarn winded on paper tubes is moved through trolleys for

Checking and Quality Control section, where all recommended standard

checking / testing and quality gradation, lot no., etc. are carried out. From

Checking and Quality Control section, material is moved to the packing

section for Packing, and then it is moved to Dispatch section for delivery.

Technology

A continuous polymerisation process produces yarns.

Strict quality control of denier orientation and spread, along with

computer-controlled draw force testing, ensures maximum

consistency of yarn performance during and after texturising.

All critical yarn proprietary such as draw force, tenacity, elongation,

uster and shrinkage are closely monitored and controlled.

A special proprietary spin finish protects the color and lubricity of

the yarn over long periods of storage.



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Controlled interlace in filaments as well as the special finish enable

the yarns to be texturised at speeds of 750 mpm and above.

Polyester yarns are produced exclusively from PTA (Pure

Terephthalic Acid) to ensure a pure, uniform polymer of remarkable

whiteness.

3.2 Existing Product (for PTY)



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Currently, Company manufacturing of Polyester Texturised Yarn,

which is mainly used for manufacturing apparels i.e. shirting, suiting,

ladies dress material, etc. Company use POY as main raw material for

manufacturing PTY. Polyester Texturised Yarn is obtained after further

processing of POY.

Synthetic textiles due to their many inherent advantages, have long

replaced the conventional fabrics made from natural fibers. As a result the

demand for synthetic fabrics made from man-made fibers has been long

established and is steadily rising over a period of years.

Synthetics are the most versatile of clothing materials. They are

popular due to their durability, low maintenance, capacity to take various



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colors, resistant to heat and dirt etc. Another advantage of synthetic fiber

is their ability to mix well with natural fibers like cotton.

Process Description of PTY


POY LOADING ON CREEL

FEED ROLLER - 1

PRIMARY HEATER

COOLING PLATE

POSITORQUE UNIT

FEED ROLLER - 2

INTERMINGLING

SECONDARY HEATER

OIL APPLICATION


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Explanation of the Process PTY: -

Texturising is a process to develop the warmth properties by

increasing the bulkiness of yarn. In this process, POY is used as a raw

material. POY packages are loaded on the Creel from where yarn is taken

off from POY packages, through the

Feed Roller -1 on a controlled speed and fed to the Primary Heater(heating system) and passed through Cooling Plate for heatsetting purpose.

During this heat-setting process, yarn is drawn to a required draw ratio by

the help of Feed-roller-2 and twisting / de-twisting process is carried out


FEED ROLLER - 3

TAKE-UP

QUALITY CHECKING

PACKING & DESPATCH


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by the Positorque Unit simultaneously, which is placed between Cooling

Plate and

Feed Roller - 2. Due to this twisting/de-twisting under the heated

condition a loop type structure is formed in the yarn, which increases the

air pocket and hence the bulkiness. Then this yarn is passed through

Intermingling Device, where with the help of air at a required pressure,

knots are developed, which helps the yarn for better running in the

subsequent process.

From Intermingling Device, the bulked yarn is fed in the Secondary

Heater for setting purpose. The texturised yarn is thenpassed through

Feed Roller-3 and Oil Application system to apply coning oil for

protecting the yarn surface from wear and tear in the subsequent process.

Then this yarn is wound on Paper-tubes in Take-Up. After a pre-set time

the packages are doffed at a particular doff weight and sent for quality

checking and packing as per the quality gradation norms. The packed

boxes are then weighed and stored in a Storage area for final dispatch to

the market.



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CHAPTER 4

HUMAN RESOURCE DEPARTMENT



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4.1 RECRUITMENT

Recruitment is a process to discover the sources of manpower to meet

requirements of the staffing schedule and to employ effective measures for

attracting that manpower in adequate numbers to facilitate effective

selection of an efficient working force. Recruitment needs are of three

types planned, anticipated and unexpected.

The Supreme Filaments Limited recruits the workers after taking an

interview. In interview, they check the nature of the person i.e., whether

they like or dislike the work. They appoint that person who has the

hardworking nature.

4.2 SELECTION

Selection is the process of choosing the most suitable persons out of all the

applicants. In this process, relevant information about applicants is

collected through a series of steps so as to evaluate their suitability for the

job to be filled. Selection is a process of matching the qualifications of

applicants with the job requirements.

The Director of the company does selection. The director appoints the

manager after taking the personal interview. They require the minimum

experience of 3 years in textile related industries.



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4.3 TRAINING & DEVELOPMENT

Employee training is distinct from management development. Training is

a short-term process utilizing a systematic and organized procedure by

which nonmanagerial personnel learn technical knowledge and skills for

a definite purpose. On the other hand, development is a long-term

education process utilizing a systematic and organized procedure by which

managerial personnel learn conceptual and theoretical knowledge for

general purpose.

The Supreme Filaments Limited is not providing the training to their

workers. Because work of them is fully automated. So that they do not

need to train them over there.

4.4 COMMUNICATION

Communication is the process through which an individual can exchange

their beliefs, things, information, and experience to others. In simple

words, it is the process of exchanging the information from one person to

another.



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They are providing an open environment, which enabling free interaction

between all levels. The communication is provided in the following

manner:

The communication process is done through the above diagram i.e., the

director passes the information to the workers through the manager. The

director tells to the manager, then manager tells to the master and then

master tells to the workers.

4.5 PERFORMANCE APPRAISAL

Performance evaluation or performance appraisal is the process of

assessing the performance and progress of an employee or of a group of

employees on a given job and his potential for future development. It


Director

Manager

Master

Worker


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consists of all formal procedures used in working organization to evaluate

personalities, contributions and potentials of employees.

Performance appraisal is done to appraise or analyze the performance of

the worker. Here, in this company, to appraise the performance of the

worker is not as easy as in the other industry. Because most of the work is

done automatically. So there is less work among the workers.

4.6 COMPENSATION

Incentive wages refer to performance-linked compensation paid to

improve motivation and productivity of employees. It implies monetary

inducements offered to employees to perform beyond acceptance

standards. It is related directly or indirectly to productivity and

profitability of the enterprise.

They are providing compensation to their workers up to 5 percentages on

extra production.

4.7 EMPLOYEE BENEFITS AND&SERVICES

They are offering following certain services to their employees.

1) Bonus

2) Medical Insurance



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3) Housing Facilities

4.8 ORGANIZATIONAL CHART

4.9 DISTRIBUTION CHANNEL

The Supreme Filaments Limited distribute their products through the

following two ways:

1) Directly to the viewers: -


Director

Manager

Master

Worker


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The company is sold some of their products to the customers i.e., the

viewers directly.

2) Through the brokers: -

The company has 70 to 75 brokers recently. It is sold their other products

to the customers i.e., the viewers through the brokers.

They are giving 1 percentage to the brokers as a brokerage rate.

4.10 DEPARTMENTS

They are providing following areas or departments:

1) Administration Department

2) Production Department

3) Human Resource Department

4) Packing Department

5) Storage Department

6) Dispatch Department



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CHAPTER 5

MARKETING DEPARTMENT



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5.1 Market for PTY and POY

The manmade fiber industry holds encouraging prospects in

meeting the clothing needs of the growing population of the country. Until

a few years ago, synthetic languished in the shadow of natural fibers and

could find respectability only in blends. However, the durability,

affordability and ease of use of synthetic fabrics, pushed synthetics into

the limelight. Modern fashion designers have taken to synthetic fabrics in

a big way and synthetics are riding the wave of popularity.

As textiles are an essential requirement next to food for human

beings, manmade fibers have filled-in the gap created by the almost

stagnant production of natural fibers like cotton and wool and the fast

growing demand of the ever increasing world population.

The demand of POY has increased over the years mainly due to itscost-effectiveness and domestic availability. Domestic availability of

cotton also influences POY availability. As per the CRIS INFAC Report,



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POY demand is expected to grow at nearly 5.6 per cent in the medium

term.

5.2 Distribution Channel

The Supreme Filaments Limited distributes their products through the

following two ways:

3) Directly to the viewers: -

The company is sold some of their products to the customers i.e., the

viewers directly.

4) Through the brokers: -

The company has 70 to 75 brokers recently. It is sold their other products

to the customers i.e., the viewers through the brokers.

They are giving 1 percentage to the brokers as a brokerage rate.



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5.3 Competition

The main players in the POY industry are raw material suppliers,

manufacturers (converting PTA/ DMT and MEG into filament yarn) and

texturisers. POY is largely sold to texturising units, who process it and sell

it to weavers (largely power-loom).

Reliance, the largest player in POY, has integrated backwards and

produces the raw material it requires, while the other players either import

it or source it from the domestic markets.

Five major players dominate the POY sector like that

i. Reliance Group,

ii. Indo Rama,

iii. Sanghi Polyester,



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iv. Century Enka,

v. JBF Industry Limited

Industries, accounting for nearly 60 per cent of the total industry capacity.

5.4 Approaches to Marketing and Proposed

Marketing Set-up

Existing Set-up

Company has an established client base and they are marketing their

products through various dealers and distributors in Surat, Mumbai,

Ahmedabad, Bhiwandi, Ludhiana, Secunderabad, Meerut, Panipat, Delhi,

Bhilwara, Erode, Salem, Coimbatore, Ichalkaranji, Malegaon and Calcutta

markets. Their manufacturing locations are considered suitable in view of

the demand and supply position of PTY, as their manufacturing units are

located at Kim (Surat), which is near to Selvasa Mumbai, Ahmedabad themajor consumption centers of texturised yarn.



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They also have a godown at Bhiwandi from where the goods are

transported to the prospective customers.

Proposed Marketing Set-up

Out of the proposed production capacity of 60,000 T.P.A. of POY,

Company propose to consume 25,500 T.P.A. of POY (at a manufacturing

capacity of 85%) for manufacturing PTY at existing texturising units

located at Silvassa, and the balance quantity of POY will be sold in the

local market to other texturising units. Company has already received

proposals from few prospective buyers for the purchase of additional

quantity of POY and Company negotiating with these prospective buyers

to tieup the additional production.

Export Possibilities and Export Obligations

Currently, their entire existing production of PTY is sold locally and

as on date, they dont have any export obligations. However, in future they

may sell their products (both PTY & POY) in export markets also.

5.5 Competitive Strengths



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Company faces competition from large and integrated players.

Further, smaller producers of PTY & POY also create competition for

them, but, considering the size and barriers for new entrants in the

industry, the competition from smaller producers is minimal.

Company is in medium size as compared to the market leaders like

Reliance Industries Limited. However, after completion of their Project

involving backward integration, Supreme Filaments Ltd will become one

of the major producers of POY & PTY in the country.

Suprem Filament propose to utilize about 50% of the production (at 85%

of manufacturing capacity) as raw material for their other three units at

Surat. Further Company has been receiving enquiries for their products

from buyers. Hence, Company does not envisage any major competition

threat from other players in the market.

5.6 SWOT ANALYSIS

STRENGTHS:

1. SUPREME FILAMENTS LTD has a pro-active management and

promoters have hands on experience in manufacturing and trading of

textile products.



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2. The Group has agents for domestic sales as well as export of processed

fabrics.

3. The Company has been exporting fabrics and other finished goods since

last 4 years and is better positioned for developing the market for export of

Denim Fabric, Bottom Weight Clothes and Processed Fabric.

4. The Project is eligible for interest subsidy of 5 % under TUFS and

would also earn approximately 8 % duty drawback for export.

5. The Company would be manufacturing Denim Fabric, Bottom Weight

Clothes and Processed Fabric, which is in demand across the Globe.

6. The Plant will be set up in Surat, which is said to be a major textile

center of the country and thus has easy access to raw material and skilled

labour.

WEAKNESSES:

1. SUPREME FILAMENTS LTD will be competing with established

players like Arvind Mills Ltd, Ashima Ltd and Bombay Dyeing &

Manufacturing Company Ltd. However these Companies have higher

fixed cost vis-a-vis SUPREME FILAMENTS LTD and so cost wise,

SUPREME FILAMENTS LTD may be cheaper.



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2. Overseas market is highly competitive. Indian manufacturers including

SUPREME FILAMENTS LTD have advantages over others on account of

their lower operating cost.

3. The success and viability of the project depends to a good extent upon

the interest subsidy of 5% available from Textile Upgradation Fund of

Govt. of India and duty draw back on account export sales.

4. The Company has no spinning unit to meet for its raw material

requirement.

5. Fashion trend in overseas market changes very fast.

OPPORTUNITY:

1. With closure of many production centers in Europe and USA on

account of stringent pollution control norm, high cost labour and raw

material. This opens up tremendous opportunity for Indian manufacturers

for supplying Denim and Bottom Weight Clothes and Processed Fabrics to

those countries.

2. Quota system shall go away by the end of 2004, which will make global

sourcing easier. Many foreign customers will take a relook at their supply

chain to get quality products from India.



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3. Interest rates are gradually falling, making new investments more

affordable.

4. Governments policy for interest subsidy will facilitate SUPREME

FILAMENTS LTDs cost reduction.

THREATS:

1. The domestic demand-supply scenario is expected to be balance even

through a number of capacity expansions are expected to be implement by

various companies over the years.

2. The player with lower production costs would be in a position to utilize

capacities optimally. SUPREME FILAMENTS LTD enjoys cost

advantages, which will enable it to withstand competition.



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CHAPTER 6

FINANCE DEPARTMENT



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6.1 What is Finance? : -

Finance may be defined as the art and science of managing money. The

major areas of finance are:

1) Financial Services: -

It is concerned with the design and delivery of

advice and financial product to individuals, business and governments



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within the areas of banking and related institutions, personal financial

planning, investments, real estate, insurance and so on.

2) Financial Management: -

It is concerned with the duties of the financial

managers in the business firm. Financial managers actively manage the

financial affairs of any type of business, namely, financial and non-

financial, private and public, large and small, profit- seeking and not-for-

profit. They performed such varied tasks as budgeting, financial

forecasting, cash management, credit administration, investment analysis,

funds management and so on.

In recent years, the changing regulatory and economic

environments coupled with the globalization of business activities have

increased the complexity as well as the importance of the financial

managers duties. As a result, the financial management function has

become more demanding and complex. It provides an overview of

financial management function. It is organized into seven sections:

Relationship of financial and related disciplines

Scope of financial management

Agency problem

Organization of the finance manager in India

An overview



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6.2 Key Activities of the Financial Manager: -

The primary activities of a financial manager are:

1) Performing financial analysis and planning

2) Making investment decisions

3) Making financing decisions

6.3 Emerging role of Finance Managers in India: -

Reflecting the emerging economic and financial environment in the post-

liberalization era, the role/job of financial managers in India has become

more important, complex and demanding. The key challenges are, inter-

alia, in the areas specified below:

1) Financial Structure

2) Foreign exchange management

3) Treasury operations

4) Investor communication

5) Management control

6) Investment planning

6.4 Insurance: -



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All units have been insured through United India Insurance Co.

Limited and all the policies are valid as on date.

CHAPTER 7

SUGGESTIONS



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The Supreme Filaments Limited is mainly covering the whole

market. Thus it could capture more the national market.

The Supreme Filaments Limited should make their product

available in more areas.



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They should take mass promotion activities with more frequency in

a year.

They should speed up the research and development. And

information should also be achieved of product in domestic market.

CHAPTER 8

CONCLUSION



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The Supreme Filaments Limited is a one of the popular company in

a surat for producing a POY (Partially Oriented Yarn) and PTY

(Polyester Texturised Yarn).

The Supreme Filaments Limited is a progressive company having a

mass production.



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They have an average of 70 to 75 brokers. So it has covered almost

the full local market.

As every coin has two sides, the Supreme Filaments Limited has

both positive as well as negative side/impact.

The positive impact of the company is that it is producing in a bulk

and selling in a bulk. So it has good market.

On the other hand, the negative impact of the company is that it is a

local company. So it has feared from the other reputed company.

CHAPTER 9

BIBLIOGRAPHY & REFERENCES



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The Supreme Filaments Limited

Financial ManagementM Y Khan and P K Jain

Fourth Edition



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