Internship Report

On

Decent Textiles

Marketing Division

Submitted by:

Waqas Ahmed

Date:

05-09-09

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Acknowledgement

I bow my head before almighty Allah with gratatitude. My indebt ness and

salute to many individuals who have helped shape this report cannot

adequately be conveyed in a few sentences. However, I must once again

recall my indebt ness to lot of former fellows and contemporary colleagues

who took the time and trouble during the last few days to speak to me about

the ways this text could be further improved. It is most appropriate to

mention the ingenuity of respected Senior, who provide me an opportunity to

enhance the management skills from a well established organization It is my

privilege and honors to my express my deep gratitude and in calculating

thanks to the DGM of Decent Textiles Faisalabad especially to Mr.Hassan

Mahmood and Mr.Kamran Ahmed who provided me an opportunity to work

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in the environment where quality is every thing. I bow my special thanks t o

Mr. Kashif Maqsood (Export Marketing Manager) who was very kind to me

during my job training period.

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Most respected Haji Bashir Ahmad Sahib the

Chairman of STIL whose benevolent attitude

and fair administration of the organization has

always the source of inspiration for the entire

staff of the organization.

The Holy Prophet Muhammad (S.A.W.) The greater Social

reformer and guide in every sphere of life. My affectionate

parents who taught me the first word of speak and supported

me morally and financially throughout my studies.

Thanks to My friends (Shiza,Saira,Mazhar and other class

mates)

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List of Contents

No. Contents Page No

1 Acknowledgment 2

2 Dedication 3

3 Textile Industry Uses 5

4 Textile Value Chain 6

4 Decent textiles 7

5 Mission Statement 9

6 Weaving Strategy 11

7 Dyeing and Stitching 12

8 Marketing Dept 13

9 Industrial Analysis 18

10 Company Analysis 29

11 Major Threats for the Textile Industry 38

12 A Snapshot of Textile Industry 41

13 Recommendations 44

14 Conclusion 45

15 References 47

Textile Uses:

Textiles have an assortment of uses, the most common of which are for

clothing and containers such as bags and baskets. In the household, they

are used in carpeting, upholstered furnishings, window shades, towels,

covering for tables, beds, and other flat surfaces, and in art. In the

workplace, they are used in industrial and scientific processes such as

filtering. Miscellaneous uses include flags, backpacks, tents, nets,

cleaning devices, such as handkerchiefs; transportation devices such as

balloons, kites, sails, and parachutes; strengthening in composite

materials such as fibre glass and industrial geotextiles, and smaller

cloths are used in washing by "soaping up" the cloth and washing with it

rather than using just soap.

Textiles used for industrial purposes, and chosen for characteristics

other than their appearance, are commonly referred to as technical

textiles. Technical textiles include textile structures for automotive

applications, medical textiles (e.g. implants), geotextiles (reinforcement

of embankments), agrotextiles (textiles for crop protection), protective

clothing (e.g. against heat and radiation for fire fighter clothing, against

molten metals for welders, stab protection, and bullet proof vests. In all

these applications stringent performance requirements must be met.

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Woven of threads coated with zinc oxide nanowires, laboratory fabric

has been shown capable of "self-powering nanosystems" using vibrations

created by everyday actions like wind or body movement

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Decent Textiles

Faisalabad

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Decent Textiles History:

The Decent Textiles was born in 1986 and is a reputable and leading

manufacturer of textiles (home textiles and made-ups).Decent Textiles

registered company in Pakistan and are listed on PTEA (Pakistan

Textiles Exporters Associations.

Decent Textiles was established in 1986 at Faisalabad and is one of the

oldest companies of Pakistan with vast years experience in textile

manufacturing. It was initially set up as a weaving project with 25,000

spindles and 600 looms. However, after decades of aggressive

expansion and modernization Decent Textiles has dimished it and

vertically integrated home textiles company with state of the art

capabilities for stitching. The company has a diverse customer base

with sales in export markets. The main international markets include

Asia, Europe, USA and Australia.

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Mission Statement:

At Decent we aim to serve the needs of our customers. At the same time

we hope we are creating an environment where talented and

exceptional people want to work. We are committed to providing our

employees with opportunities for personal and professional growth that

they can find nowhere else. We are dedicated to operating our facilities

with the utmost respect for the communities and environment in which

we live and work.

Corporate mission:

· Put the customer first always.

· Be flexible to the customer’s needs.

· Adhere to the highest quality standards.

· Think innovatively but make informed business decisions.

· Delivery Results

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Decent Weaving

Strategies:

Decent weaving strategies are given

below.

Decent Textiles diminished the weaving

sector as it continues to use

outsourcing by hiring qualified

purchase managers dealing with direct

or indirect contact with the leading

fabric manufacturer to purchase

according to the need of customer by

efficiently using the company capital.

Decent Dying Strategies:

Decent Textiles processed its textile goods from the well equipped

processing mills like Arshad Corporation Limited, Kamran Textiles,

Noor Fatima Textiles and others.

Decent Stitching Unit:

We have well furnished stitching centre fully carpeted more than 100

machine. We have facility to ship any made order with in committed set

time. In view of all above mentioned. We want to enter in to business

with your esteemed organization and request you to inform us present

requirements with full specification to quote you our best workable

prices and for dispatch of required samples.

Decent Textiles Departments:

Decent Textiles has been divided into following major departments.

Marketing Department

Shipping Department

P.P.C Department

Finance Department

Purchase Department

Decent Textiles Marketing Department:

Marketing Department of Decent Textiles mainly consists of export

zone, Marketing Department control by qualified persons with vast

experience of international marketing. Department is control by one

head which is the director of export department Miss Tanzeela Javed

under supervision of Arshad Gulzar Chief Executive of the company

International or Export Zone:

In international zone sales personnel attract and contact the foreign

customers to sell their textile products. Two personnel focus on

European countries & African countries. While on other hand, two

personnel focus on USA and Asian Countries.

Payment methods:

In export zone, different payment methods are used which are given

below

L/C (30 days, 60 days, 90 days, 120 days, 150 days)

CNF

C&F

CIF

B/L

Trust system

Competition:

At international level there are number of suppliers from around the

globe who are exporting the fabrics to other countries with a high

quality and at low price. If we look at Asian countries then there names

are mentioned below.

Bangladesh

China

Vietnam

Pakistan

India

Iran

These countries are providing the fabric to European countries as well

as USA and African countries. Bangladesh is the only country who is

providing best quality of the fabric and selling it highest sale pricer. On

other hand, Pakistan is producing poor quality and selling their fabrics

in USA which is the lowest price. The main reason of the poor quality is

the lack of investment whether they are foreigners or local. Investors

are not interested to invest their capital since Pakistan is facing great

difficulties in both government sectors and private sectors.

In local market there are number of units which are competing with

each other. There are big giants of the local market of textile industry

of Pakistan. The major competitors of Decent Textiles are

Noor Fatima Textiles

Gia textiles

Arshad corporation

Niagra textiles

Technology:

Decent Textiles outsourcing by latest enhanced and well equipped

processing houses which have the latest technology in the textile

industry.

Marketing Financials:

Since Decent Textiles does not too much pay attention on marketing

and advertising of their textile products, that’s why there is little bit

marketing financials are being happened. Fairs are the only way of

market the product to direct buyer.

Target Market:

The target customers of Decent Textiles in Europe are

Hotels and hospitals use and home

textiles

For garments they are focusing on chef wears.

Where as in international market:

USA

European

countries

Distribution

Channels:

Decent Textiles is using

only two channels for its

distribution

internationally.

Two methods are

mentioned below.

Agent Buyer

Decent Buyer

Decent

Industrial Analysis:

PEST Analysis:

Political Factor:

Uneven political conditions, deteriorating law and order situation and

instability in gas and electricity prices are adversely affecting the textile

sector, while government has hardly taken any step to give some relief

or incentives to the mill owners.

Textile mill owners and exporter have strongly denounced the recent 31

percent increase in the gasoline prices and demanded from the

government to withdraw the recent increase and take serious steps to

help textile industry survive through difficult times

According to the sources, if prices continue to increase at current rate,

the textile industry would find it difficult to survive as the recent

increase has already proven deadly and many mills have started to

shutdown in the wake huge price increase.

It was also witnessed that due to prices increase in gas has not only

adversely affected the productivity of the textile industry but has also

caused sudden increase in the production cost and has badly affected

the economy of the country.

On the other hand, textile and the other exporters also facing a lot of

challenges due to increase in the production cost of the specific export

goods, while such hurdles badly affected the Pakistani exporters to

meet the challenges and compete in the local and international

markets. Exporters are demanding that government should give them

facilities to cope with the existing challenges and not get involved in

favoritism.

The main political factors which are attracting the industries and as

well as for the whole world are

Musharaf’s Seat

Arrested Judiciary

Benazir Bhutto murdered

The murder of Benazir Bhutto was infuriated matter. Number of people

came out with a great anger and numbers of textile companies were

burnt by them, just like in Karachi happened. The other issue was neat

& clean elections of 2008. no doubt that elections were being held neat

and clean but the opposition did not accept the results and new

government is still try to control the factors which are creating

disturbance. As it is mentioned above that the govt. of Pakistan

increased the prices of Gasoline and petroleum, which are the basic

needs for the textile industries. In July 2008, the textile companies in

Faisalabad shutdown their companies against the 31% increments in

prices of Gasoline, also increased the prices petroleum by 10 rupees.

Still no satisfied procedure has not been implemented by the Govt. of

Pakistan

Tight monetary policy also creates a lot of hurdles for textile sector

and exporters, and rapidly growing interest rates of the banks is

causing the shut down the power looms, and it also crushing down the

textile industry and exporters, added sources.

The industrialists rejected the imposition of 10 percent withholding tax

on electricity bills, small and medium industries, and power looms,

while they demanded withdrawals of 10 percent withholding tax

immediately for the survival of the industrial sector of Pakistan.

Then again, the government is failed to decrease the every day

increasing trade deficit. Textile sector of Pakistan contributes huge

amount in the economy of the country serious measures are needed for

its revival.

Economical Factor:

Economical factors are also disturbing the all industries of Pakistan as

well as the textile industry.

From 1999 to 2008 the inflation rate has been increased by 100%. The

last and current Government has been failed to control the economy. As

the prices have been increased, the suppliers try to get and save more

profit from their investments. That’s why prices are decided and put

with a high return in terms of profit.

Before 2008, textile industry was getting number of incentives from the

government just like R&D (Research & Developments) and subsidies on

the utilities. But some companies misused these opportunities and

unfortunately Govt. pulled back these types of incentives.

The main problem with the textile industry is shortage of electricity,

gasoline and petroleum, due to which Textile industry is bearing too

much cost that why they have to increase their prices to earn profit or

for break-even. There are some companies which have their own

electricity plants but they have to spend a lot of money to run them.

Other problems which are facing by the textile industry of Pakistan are

Non-availability of skilled labors.

· Labors cost is increasing rapidly

· Loosing quality of its products in both markets domestically

and internationally

· Poor monitory and Fiscal policies of the

Govt. of Pakistan

Uneducated people

· Investors are pulling out their capital

from the market quickly

· Foreign Investments are not coming

towards Textile industry

These are the factors which are disturbing the textile industry strongly

economically.

Sociological Factors:

Textile industry affecting the society and environment in number of

ways, some of them are mentioned below.

· ¾ Polluting the air by pushing out ruins of chemicals. Different

gases in air react with these ruins which become dangerous for

human beings.

· ¾ No proper system to throw out the useless materials and

chemicals.

· ¾ Most of the useless materials and acids are thrown into the

fields which are react or disturb the agricultural products seriously.

· ¾ Since the cost of the production and labor cost are increasing

day by day. That’s why the final product cost is also increasing

that’s why people are buying low quality products and not

spending too much to purchase.

¾ Textile companies are firing the labors and employees as well

because of high production cost and salaries that’s why the

unemployment rate is increasing day by day which is not good for

the industry as well as for the country.

Technological Factor:

The technology has been improved and updated in the textile industry of

Pakistan and some of the companies in textile industry are acquiring

these technologies. By using new technology not only they improve

their quality and efficiency but also improve their production as well as

reducing the cost of production.

PORTER Analysis:

Bargaining power of Buyer:

It has been seen from last 3 years that buyers are becoming anger and

having problems to purchase the desired products from textile industry of

Pakistan. There are several issues which are affecting the textile industry

seriously and industry is bearing losses since 2005.

The bargaining power of buyers is increasing day by day. The buyers are

demanding more and improved quality in very cheaper prices, whether

customers are from foreign or are from local markets. The competition at

international level has been increased too much. If we look at a glance to

USA exports of textile industry from all over the world and especially from

Asian countries then we can easily found that Pakistan is offering most less

export prices to USA which is 0.91 US dollars per meter. But other countries

are getting more than these prices and in these countries; Bangladesh is top

Although Pakistan is offering the lowest prices but due to poor quality and

present condition of the textile industry as well as of Pakistan present

condition are the main reasons that Pakistan is loosing its customers.

Bargaining power of Suppliers:

Bargaining power of suppliers is increasing of textile industry day by day.

The Govt. of Pakistan is playing very important role in this activity. As we all

know that inflation rate is running upwards like a rocket and utility costs are

also increasing day by day. Couple of days ago, Govt. increased the prices of

Gas by 31% and all textile mills of Faisalabad strike against this huge

increments. Now the cost of petroleum has also been increased due to which

affecting the manufacturing costs of the companies.

The costs of Yarns and chemicals which are used to dye the cloth and for

sizing process have also been increased. Textile companies are bearing too

much manufacturing costs, if they come to increase their prices then there is

a major threat that customers can move to other companies weather it is

foreign marker or local market.

Threats of new Entrants:

There is no threat of now entrance. If some one wants to enter in this

industry, that company has to face number of competitors which are the big

giants of that industry. On the other hand they have to purchase the latest

technology, Fuel prices, high labor costs, opportunity cost etc. and major

issue is that inflation is increasing day by day and instability of Pakistan Govt.

Threat of Substitutes:

There is no threat of substitute. Because Textile products and cloths are the

basic necessity of the human life and customers cannot move to other

products by leaving textile products.

SWOT ANALYSIS

STRENGTHS

Adequate financial resources

Specialized in printing

Have a diversified units of industries

Good market image

Competent management and

workers

Have ability to compete with

competitors

In home facility of production

Loyal customers

Loss sustaining capacity

WEAKNESSES

Uncertain chances of promotion

Salary package less attractive

Centralized decision making

Lack of a proper human resource

system, hence employees are not

motivated to develop their creative

and innovative abilities.

Due to high turn over the

organization is not enjoying the

economy of scale.

OPPORTUNITIES

Large scale productions because of

new market coverage and increasing

demands

Introduction of new variety in

garments

Extension of fashion-designing &

stitching departments

THREATS

GST and WTO pose biggest threats

Instability of prices due to currency

devaluation

Entrance of new and quality

conscious competitors.

Low price offered by the competitors

Strong promotional activities by the

competitors to convince buyers .

New quality, environmental and

social accountability standards

overhead are increasing rapidly.

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Major Threats for the Industry:

Rising in cost of Energy and workforce:

Rising input and energy costs coupled with higher financial charges

have deteriorated overall sectors performance in the last couple of

years. On the other hand investment on balancing, modernization and

renovation (BUR) of textile has been continuously declining since 2004-

05 after a record of $928.6 million investment in a year. The main

reason for depression in this economic lifeline of the country is the rise

in bang interest rate, decrease in cotton production, high cost of

energy, long hours of load shedding, and higher wages of skilled

workmen as compared to Pakistan's international competitors and

general law and order situation of the country.

Rising in freight charges:

As the prices of petroleum is increasing rapidly, domestically and

internationally which are affecting the company’s cost of freights. Due to

increments in manufacturing cost & freights, the profit ratio has been

decreased because customers are demanding the better quality

products of textile in low cost. That’s the reason that Pakistan’s textile

price is the lowest price in world at export level which is $0.91.

Political Instability:

The decades-old Pakistan based international textile buying houses have

shifted to India, Bangladesh and Middle Eastern countries due to

uncertain political situation. Just like Judiciary Issues of Pakistan,

President Pervaiz Musharaf issues, blames of European countries and

specially America of Terrorism against Pakistan and other major issue of

Benazir Bhutto murder and elections of Feb 18 2008. It’s true that

elections were being held calmly and

clearly, after elections new government changed the already existing

policies which impact all the sectors of Pakistan including Textile. The

prices of utilities and petroleum were increased by govt. rapidly which

was pushed down by force before the elections.

The new govt. has also banned to export the raw cotton to the world’s

countries by saying that export of raw cotton has been banned due to

the increments in the prices of raw cotton should not be more export

infect it should be used domestically because textile companies and

baring high raw material cost due to which sales prices at domestic and

internationally level are increasing day by day. Now the prices definitely

come down at domestic level and production cost should be reduced.

Internationally Competition:

The decades-old Pakistan based international textile buying houses have

shifted to India, Bangladesh and Middle Eastern countries due to

uncertain political situation. The traditional buying houses of Pakistani

products have told Pakistani producers / manufacturers to come to their

new countries of residence along with their products/samples if they

wanted to get supply orders. Since the removal of quota regime,

Pakistan's textile sector has been facing intense competition from

neighboring countries on export front.

.

The major competitors of Pakistan Textile Industry are given below

with their selling prices in US states.

Country Prices ($)

Pakistan 0.91

India 1.91

China 1.5

Bangladesh 2

Vietnam 3

Note: The above mentioned prices are in dollars and are per square

meter.

Same thing is happening with Pakistan textile industry in the other

countries of the world as well as for the company.

Research & Developments:

State Bank of Pakistan (SBP) has informed the Economic Coordination

Committee (ECC) of the Cabinet that the textile industry was grossly

misusing the research and development (R&D) fund, and the

government should review its policy of injecting billions of rupees for

protecting this inefficient sector of the economy. Previously, the textile

industry was enjoying refund and rebate facility on exports, however,

this policy was discontinued in

2006-07 on reports that a number of inefficient textile units were

getting huge fake refunds,misusing the facility. Now ECC took SBP

Governor's views very seriously and asked the Ministry of Finance

(MOF) to come up with some other strategy to help the textile industry

to become more result-oriented to compete with other players in the

world market.

As the Govt. is not supporting the textile industry for Research &

Development to improve the industry, companies are also not much

paying attention to the Research & Development. That’s why investors

are not investing too much in this industry and industry is not able to

acquire or purchase the new technologies to improve their productivity,

efficiency, quality and saving the manufacturing costs.

Conclusion:

In August of 1947, a Islamic country was founded in south Asia with the

name of Pakistan. Pakistan has its own and unique history whether you

talk about its culture, people, handicrafts, environments, government,

weather, industry, or technology.

Pakistan economy is one of the growing economies in the world and

attracting foreign investments from many sides of the world. But this

growth is increasing gradually.

Pakistan industry has been faced a lot of problems and different types

of ups and downs in its history. But from year 2000 to up till now,

Pakistan industry is facing more than these all problems. Textile

industry is one of these industries which is facing these problems.

Textile industry is contributing to Pakistan’s GDP near about 8.65% and

in total exports, it is contributing near about 62%. The overall

worldwide share in exports of textile products is near about 14% which

is decreasing slowly but surely.

Right now Pakistan textile industry is facing a lot of problems which

are directly related to government. The major problems are mentioned

below.

Musharaf’s impeachment

New government rules and regulations

Increments in costs of raw materials

Increasing cost of Gas and Petroleum

Decrement in foreign investment

Political instability

These are the major problems which are facing by the textile industry

of Pakistan.

References:

www.aptma.org.pk/

www.saleemtex.com/

www.ptea.org/

www.alibaba.com/countrysearch/PK-suppliers /

Textile _Fabric.htm l

www.fibre2fashion.com/news / textile -

news / pakistan /

www.wikipedia.com

www.bharat textile .com/newsitems/

2003963

www.gia.com.pk/ www.iptu.co.uk