Post on 03-Jun-2018
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PROJECT PROPOSAL FOR
PANIPAT CLUSTER
Department of Industries
Government of HaryanaPrepared by: Access Consultancy Services
www.accessconsulting.in
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CLUSTER PROFILE
Primary stakeholder of cluster comprise of
manufacturers and exporters of home furnishingproducts. The cluster has
3000 manufacturing units
300 registered export units
Turnover of Rs. 11,000 crores per annum
Export oriented units with annualturnover of Rs. 3000 crores
Units catering to domestic market have
an annual turnover of Rs. 8000 crores
Employment: 50,000 persons
Cluster caters to both domestic and international markets
Products: Carpets, durries, rugs, blankets (acrylic, shoddy and woolen),
upholstery, curtains, bed sheets etc.
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1 INTRODUCTION
2 KEY CHALLENGES3 CLUSTER DEVELOPMENT APPROACH/PROCESS4 GLOBAL SCENARIO (HOME FURNISHINGS/CARPETS)
5 CLUSTER SCENARIO/PROFILE6 SWOT ANALYSIS/NEED ASSESSMENT7 PROJECT PROFILE
8 PROPOSED FACILITIES9 PROJECT COST & MEANS OF FINANCE
10 ENVISIONED IMPACT ASSESSMENT
STRUCTURE OF THE PRESENTATION
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INTRODUCTION- PANIPAT CARPET CLUSTER
INDIAS GLOBAL SHARE IN TUFTED CARPETS IS 8.5%
WE ARE RANKED 5TH IN GLOBAL EXPORTS
ANNUAL GROWTH HAS BEEN NEGATIVE (-2%) OVER 2005 TO
2009-10
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KEY CHALLENGES
LONG PRODUCT DEVELOPMENT TIME
LONG LEAD TIME
10% YARN WASTAGE
NO PROFESSIONAL DESIGN CENTER
LIMITED CARPET WIDTH < 10 FT
AUTO SECONDARY BACKING NOT AVAILABLE
AUTOMATIC PRINTING FACILITY NOT AVAILABLE
CLUSTER IS INTO PRICE BASED COMPETITION NOT DIFFERENTIATION BASED (DESIGNSAND BRANDING)
SHORTAGE OF SKILLED MANPOWER
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GLOBAL SCENARIO-HOME FURNISHING
S.NO. EXPORTERSVALUE EXPORTED IN 2009,
IN USD THOUSAND
ANNUAL GROWTH IN
VALUE
2005-2009 (%)
SHARE IN WORLD
EXPORTS
(%)
1 CHINA 1331471 5 36.1
2 INDIA 1022263 -3 27.83 TURKEY 158823 1 4.3
4 VIETNAM 122257 29 3.3
5 GERMANY 99654 21 2.7
INDUSTRY WORLD LEADER MARKET
SHARE (CHINA)
INDIAS MARKET SHARE
HOME FURNISHING 36% 27%
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GLOBAL SCENARIO-CARPETS (TUFTED)
INDUSTRYWORLD LEADER
MARKET SHARE
(BELGIUM)
INDIAS MARKET
SHARE
CARPETS (TUFTED) 18% 8.5%
S.NO. EXPORTERSVALUE EXPORTED
IN 2009 (USD
THOUSAND)ANNUAL GROWTH
IN VALUE, 2005-
2009 (%)SHARE IN WORLD
EXPORTS (%)
1 BELGIUM 2056714 -2 18
2 CHINA 1491264 15 13
3 TURKEY 1075733 15 9.4
4 NETHERLANDS 1000220 1 8.7
5 INDIA 978190 -2 8.5
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CLUSTER SCENARIO CURRENT PRODUCTION:
30% OF CLUSTERS ANNUAL
PRODUCTION IS EXPORTED.
CARPETS ACCOUNT FOR MORE
THAN 25% OF EXPORTS.
BLANKETS 50%. BED SHEETS 16%
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STRENGTHS
TRADITIONAL BRAND STRENGTHS.LOCATED NEAR DELHI .
PRESENCE OF SUPPORT INSTITUTIONS.
CLUSTER CURRENTLY CATERING TO THEEXPORT MARKET.
MARKETING INFRASTRUCTURE IN PLACE.
WEAKNESSESLIMITED RANGE OF PRODUCTS.
LOW FACTOR PRODUCTIVITY.
NO DIFFERENTIATED PRODUCT. REPETITIVE DESIGNS
SMALLER WIDTH CARPETS BEING PRODUCED
MANUAL, SPRAY LATEXING, SUB STANDARD QUALITY
TRADITIONAL PRINTING NOT VERY ACCURATE AND
APPEALING.
OPPORTUNITY
A NATURAL CLUSTER OF 1000 + MSME.
DIVERSIFICATION OF PRODUCTS.MOVING UP THE VALUE CHAIN.
CONSOLIDATION OF PRODUCT PROFILE.
UN-EXPLORED MARKETS ( AFRICA & LATINAMERICAS
THREATS
STIFF COMPETITION FROM CHINA.
FAST EVOLVING PRODUCTION TECHNOLOGIES.
VAST VARIETIES OF DESIGNS.
FASTER DELIVERY SCHEDULES.
QUALITY BACKING AND PRINTING TECHNOLOGY.
SWOT ANALYSIS
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NEED ASSESSMENT- GAP ANALYSISPRODUCT REASONS FOR LIMITED SUCCESS INTERNATIONALLY PREVALENT TECHNOLOGY
BATH
MATS &
RUGS
Absence of raw material bank (possibility
of cost cutting by7-10%)
Low accuracy of designs
Long product development cycle on
account of manual processes
Delayed shipments and limited sampling
techniques resulting in cost overrun
Use of CAD / CAM for product development for
more accurate designs and allows design
variations
CARPETS
Non availability of wide carpets on account
of lack of wide width looms
Low productivity
Non availability of faster printing faclitiesand techniques.
Inability to develop designs that cater to
changing global taste
High wastage involved in experimenting
with designs while replicating products
which have a growing demand ininternational market
Wide width tufting machine that ensures higher
productivity during mass production
Presence of modern weaving carpet units with
wide width looms which facilitate execution of
bulk orders.
Use of technology that involves shorter product
production cycle
CAD/ CAM allows experimenting with designs on
computer before actually replicating it on the
carpets.
Usage of automatic small tools in tufting,latexing and finishing resulting in standardization
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PROPOSED FACILITY-
CLUSTER STANDARD VS GLOBAL STANDARD
PROPOSEDFACILITY
CLUSTER STANDARD GLOBAL STANDARD
CARPETS 10 FT. X 12 FT. WIDTH UPTO 16 FT. AND MORE
10% YARN WASTAGE NEGLIGIBLE YARN WASTAGE WITH ADVANCED
PRODUCTION MACHINES
TUFTING 1 METRE PER DAY PERARTISAN
3-4 METRES PER HOUR
BACKING MANUAL SPRAY LATEXING. FULLY AUTOMATED SECONDARY BACKING
PLANTS. SUPERIOR & LONG LASTING FINISH
TIME OVER RUNS AND
DELAY IN DELIVERY
SHORTER PRODUCTION CYCLE RESULTING IN
REDUCTION IN COST OVER RUN AND ON TIME
DELIVERY
PRINTING TRADITIONAL MANUAL
DYEING
CHROMOJET / PRINTING MACHINE WITH
VERSATILITY OF COLOR AND SPEED.
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Introduction- Panipat Carpet ClusterEXISTING TECHNOLOGY -TUFTING
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EXISTING PRODUCTSCARPETS / RUGS GLOBAL RANGE OF PRODUCTSCARPETS / RUGS
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SKILLS DEVELOPMENT AND TRAINING
To address the need of the cluster for skilled man
power shortage and to enable them to work on
the proposed facilities. The SPV would undertakeimparting trainings on diverse skills required by
the cluster units
PROJECT PROFILE
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PROJECT PROFILE
Projectimplementation on
a 1 acre plot insector 28 Panipat.Land Allotted byHUDA, with acomfortable 3 yearpayment plan
LAND
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PROPOSED FACILITIES CFC
1. PRODUCT DEVELOPMENT
CAD & CAM CENTER WITH WIDE WIDTH TUFTED
SAMPLING MACHINE.
2. COMMON FACILITY CENTRE AUTOMATED BACKING PLANT.
CHROMOJET PRINTING.
3. SKILL DEVELOPMENT & TRAINING
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CARPETS- PRODUCT DEVELOPMENT
Cluster gets designs from buyers and tracemakers convert thesedesigns form paper to cloth
Mostly trial and error for product development
CAD / CAM is not used
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PRODUCT DEVELOPMENT
CAD & CAM Center
Relevant soft waresand related hard wareon whichdemonstrative tuftingof different pile heightand loops can be done.
This machine shall tuftthe latest designs forcluster members totake approvals fromtheir buyers
Wide Width TuftingSampling Machine.
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AUTOMATED PRINTING LINE
No Screens- no Limitationin pattern repeats
Design change on the fly
Full penetration
Pile weight 250 up to1500 g/m2
For polyamide, wool,
acrylic and (up to certainextent) polyester yarns
Complete print line fromone supplier
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PROJECT COST
&
MEANS OF FINANCE
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TOTAL PROJECT COSTS No Component Cost (Rs Crores)
1 LAND AND DEVELOPMENT COST 2.46
2 BUILDING 1.72
3 PLANT AND MACHINERY 13.86
4 MISC FIXED ASSETS 2.04
5 PRELIM AND PRE-OP EXPENSES 0.02
6 CONTINGENCIES 0.137 MARGIN FOR WORKING CAPITAL 0.27
TOTAL PROJECT COST 20.50
Source Amount (Rs Lacs) %Equity from cluster members 5.23 25.51%
Grant under CDP 13.50 65.85%
Grant from State Govt 1.769 8.63%
Total 20.50 100.0%
IMPLEMENTATION SCHEDULE
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SL ACTIVITY/MONTH JUNE JULY AUG SEPT OCT NOV DEC JAN FEB MAR APR MAY1 POSSESSION IN FAVOUR OF SPV.2 FOLLOW-UP FINAL SANCTION OF
GRANT.
3 TYING UP OF CONTRIBUTION OFSPV /STAKEHOLDERS.
4 COLLATE INFORMATION ONDEFICIENCIES
5 FOLLOW-UP FOR RELEASE OFGRANT.
6 PREPARATION OF DETAILEDDRAWINGS.
7 FORMATION OF PURCHASECOMMITTEE.
8 FINALIZE BOQ OF EQUIPMENTS9 SEEKING QUOTATIONS FROM
MANUFACTURERS & CALLING
TENDERS10 CONSTRUCTION OF FACILITIES.11 OBTAINING STATUTORY
CLEARANCES/ APPROVALS.12 PURCHASING OF MACHINERY
AND EQUIPMENT.13 INSTALLATION AND TRIAL RUN
OF MACHINERY AND
EQUIPMENT.14 PROGRESS REPORTS OF
IMPLEMENTATION SCHEDULE
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Working Assumptions
Year Capacity Utilization
1 50%
2 55%
3 60.50%
EXPENDITURE ASSUMPTIONS
RAW MATERIAL COST % OF SALES REVENUE 72%
MANUFACTURING OVERHEADS % OF SALES REVENUE 5%
ADMINISTRATION OVERHEADS AS A % OF PROJECT COST
0.64%
SALARY & WAGES AS A % OF TOTAL REVENUE 3.72%
LEASE RENTALS RS. 15,000 PER MONTH FOR USING THE LAND AREA
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Revenue Assumptions
Year SALES REVENUE
1 1500 LACS
2 1650 LACS
3 1815 LACS
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Key Financial Indicators
S No. Financial Indicators
1 Debt Service Coverage Ratio 4.53
2 Break Even Point 56.02%
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Bench mark The Henan province V/S
Panipat
Solution proposed
Raw material Yarn is cheaper, locally
available in cluster
Raw material bank
Marketing Group model Common brand name
Machinery Sophisticated, supports
standardization anddifferentiation
Wide width tufting
facilities, backing plant,Chromojet Printing
Printing Printing is done on
group approach
Chromojet Printing
Financial services Loans at 3-5% interest A financial servicesthrough SPV
Skill development Skilled labor Skill Development
centre to be set up by a
technical partner.
PERCIEVED I t
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PERCIEVED Impact
1 Enhanced growth of cluster in terms of technological
advancement.
Facilities at CFC will
encourage members toinvest in Automatic Tufting
Machines. 11 Members
already in discussions to
upgrade.
2 Scaling the value chain while being competitive innational and international market
Repetitive and very basicdesigns would not fetch
good price. Its expected to
increase revenues by at least
10%
3 New product development for higher unit valuerealization
Current system of designingshall be taken over by
4 Skill development initiatives for addressing the
manpower shortage in cluster
The quality of products shall
improve as the skill the skill
levels go up.
5 Design Center Expertise The design center shall workon creating newer varieties
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