Textile Sector

Technology Gap Assessment- technological opportunities available for achieving future PAT targets

National Workshop cum Technology Exhibition for Promoting Industrial Energy Efficiency

Harvinder Rathee Arvind Limited

7th November 2016 Contents

1: Introduction to Indian Textile Sector 2: Indian Textile Sector Categorization 3: Government of India’s Perform Achieve and Trade (PAT) Scheme: Textile Sector 4: Textile and Apparel market 5: Status of Technology in Indian Textile Sector 6: The need for technology interventions 7: Indian Government Initiative 8: Expectation from global Technology 9: An overview on Arvind Contents

Globally Largest cotton producer in the world First in global jute production Second largest textile fibre producer 12 % of Worlds Spindles capacity 6 % of Worlds Rotors capacity 9 Million Tons of fibre production in 2015-16 Second largest textile manufacturing capacity Globally Highest Looms capacity – 61% share Successfully placed its Innovative range of MMF textiles in almost all the countries largest exporter of yarn in the international market and has a share of 25% in world cotton yarn exports

Indian textiles sector has witnessed a spurt in investment during the last five years. The industry (including dyed and printed) attracted foreign direct investment (FDI) worth Rs 6,711crore (US$ 1.11 billion) during 2000 - 2014. Nationally

Contribution to Indian GDP 4 % Contribution to Indian Industrial 14 % Production Contribution in India’s Export 11 % Earning Contribution in Employment 2nd largest after Agriculture

India Planning Commission’s 12th Five Year Plan (2012-17) envisages India’s Exports of Textiles and Clothing at USD 64.11 billion by the end of March 2017 Contents

Categorization The Indian Textile industry is highly fragmented sector

Fully vertically integrated across the whole value chain and interconnected with various operations

small-scale, medium-scale, spinning, weaving, finishing, and apparel-making firms large-scale, non-integrated and enterprises.

Unorganized sector Includes Handlooms, Power loom, Hosiery, Knitting, Readymade Garments, Khadi, Carpet and Handicrafts manufacturing units

Organized Mill Sector comprises of spinning Mills, and Composite Mills where spinning, weaving, and processing activities are done. Categorization The Indian Textile industry is highly fragmented sector

The Fibre and Yarn Sector of Includes Textile Fibers, Natural Fibers such as Cotton, the textile industry Jute, Silk and Wool; Synthetic / Man-Made fibers such as Polyester, Viscose, Nylon, Acrylic and Polypropylene

The Man-Made Textile Includes Fibre and Filament Yarn manufacturing units of Sector Cellulosic and Non-Cellulosic origin. The Cellulosic Fibre/yarn Industry is controlled by the Ministry of Textiles, and the Non-Cellulosic Industry is controlled by the Ministry of Chemicals and Fertilizers.

Contents 1: Introduction to Indian Textile Sector 2: Indian Textile Sector Categorization 3: Government of India’s Perform Achieve and Trade (PAT) Scheme: Textile Sector 4: Textile and Apparel market 5: Status of Technology in Indian Textile Sector 6: The need for technology interventions 7: Indian Government Initiative 8: Expectation from global Technology 9: An overview on Arvind

Energy Energy consumed in textile industry is mainly thermal and electrical energy

Need to reduce energy consumption of this industry have assumed huge importance with the growth of energy prices, environmental constraints and legal obligations. PAT Cycle – I (Year 2009-10 to Year 2014-15)

Sector Notified DCs Energy Reduction Achieved Consumption Target (MTOE) (MTOE) (MTOE) Textile 90 1.2 0.066 Higher by approx 5.50 % 100% Reduction target for sub-group of textile sector-PAT Cycle 1 S. No. Sub Group No. of Textile units Target Range 1 Processing unit 20 1.63% to 7.31% 2 Spinning unit 37 2.07% to 9.93% 3 Composite unit 27 1.62% to 9.8% 4 Fibre unit 6 5.72% PAT Cycle – II (Year 2016 - 19) India's commitment during COP21 33-35% reduction in emissions intensity by 2030, compared to 2005 levels

40% of cumulative electricity installed capacity from non-fossil fuel based resources by 2030 Increase tree cover, creating an additional carbon sink of 2.5 to 3 billion tonnes of CO2 equivalent by 2030

Sector Notified DCs Energy Reduction Target (MTOE) Consumption (MTOE) Textile 99 1.48 0.087 5.58 % Contents

Indian Textile and Apparel market Total market size US$ 108 billion

Domestic consumption Exports US$ 68 bn. US$ 40 bn.

Apparel Home textiles Tech. textiles Textiles Apparel US$ 50 bn. US$ 5 bn. US$ 13 bn. US$ 24 bn. US$ 16 bn.

Growth pattern of domestic market Growth pattern of Indian T&A exports

US$ bn 68 12% 63 US$ bn. 15% 57 40 50 13 44 14 32 30 13 5 27 39 11 4 10 4 20 21 24 9 4 18 3 15 17 3 50 9 10 40 45 31 35 27 11 11 12 14 13 16

2008 2009 2010 2011 2012 2013 2008 2009 2010 2011 2012 2013 Technical Textiles Home Textiles Apparel Total Apparel Textiles Total But the Manufacturing Value Chain is unbalanced

Fibre Yarn Fabric Garments

Cotton fibre - 6.8 bn. Kg Spun Yarn- 5.3 bn. kg 64 bn. sqm 14.4 bn. pcs PET fibre - 850 mn. Kg MMF Yarn- 1.1 bn. kg

• Largest producer • Spindles- 50 mn. • largest no. of looms • 7th largest apparel of cotton globally • Leading spun yarn globally exporter in the – 26% share producer in the • Organized mill sector world with a share • 2nd largest world contributes only 5% of 3.7% of the producer of man- • Most cost • Low-tech looms total apparel trade made staple fibre competitive • Outdated processing producer machinery Global apparel consumption will cross US$ 2 trillion mark in 2025

Apparel market size projections In US$ billion Currently USA & EU are the largest apparel markets but it is Region 2013 2025 CAGR expected that per capita apparel spend will grow at a faster rate in EU 27 355 450 2% developing countries of BRIC, than their respective economies, whereas in developed countries it will be slower. China 165 643 12% USA 230 413 5%

Projected change in per Capita spend on Apparel Japan 110 140 2% 1,643 2013 India 46 179 12% 2025 1,221 Russia 45 141 10% 1,087 1,080 Brazil 60 86 3% 856 831 804 781 740 673 693 Canada 30 38 2% 454 377 Australia 25 36 3% 294 284 120 138 40 RoW 80 114 3%

Australia Canada Japan EU 27 United States Russia Brazil China India Global 1,146 2,058 5%

Source: Suvin Advisors Analysis Source: World Statistics Low Growth of China’s Exports will Create a Huge Trade Gap

Global textile and apparel trade projections

US$ 1700 bn. China

Other 600 exporters

US$ 760 bn. 305 1,100

455

2013 2025 (P) China’s 40% 35% share Globally consumption of polyester will increase further

• Till 2000, fibre consumption at global level was majorly cotton focussed. • By 2030, it is expected that consumption of polyester will be more than double to that of the cotton fibre.

59% Cotton Polyester Others 52% 50% 50% Widening gap 46% 48% 43% 44% between Polyester and Cotton fibre 37% 36% 36% 35% 36% 33% consumption 31% 31% 30% 27% 27%

21% 20% 19% 19% 19% 18% 18% 14%

2000 2007 2008 2009 2010 2011 2012 2020 (P) 2030 (P)

Date Source: PCI Fibres Contents

Technology in Indian Textile Industry Indian textile industry lagged behind other industrial sectors in terms of modernization. Indian manufacturer of textile industry is able to provide modern spinning machineries which do not have any technological gap

Weaving and Processing sectors wide technological gaps exists.

Gaps in technology as stated above have forced organized textile industry to go for high import of modern equipment enabling them to compete in export market. Contents

Technology intervention

Technology and process up gradation needs attention to achieve further energy efficiency.

Modern machinery with high productivity and less specific energy consumption

Dyeing machines with less liquor to material ratio

Heat recovery through hot effluent drain/ hot air exhaust

Stenters with exhaust humidity controller, VFD and exhaust heat recovery

Use of shuttle less looms Use of knotting machine, beat gaiting trolley, auto drawing machines in Weaving Technology intervention

Aerofoil design fans for Humidification Plants

High efficiency compressors with IE4 high efficiency motors with VFDs

Use of non-conventional energy like solar and biomass

Use of Diffused aeration in ETPs Contents

1: Introduction to Indian Textile Sector 2: Indian Textile Sector Categorization 3: Government of India’s Perform Achieve and Trade (PAT) Scheme: Textile Sector 4: Textile and Apparel market 5: Status of Technology in Indian Textile Sector 6: The need for technology interventions 7: Indian Government Initiatives 8: Expectation from global Technology 9: An overview on Arvind

Indian Government Initiative The Cabinet Committee on Economic Affairs, chaired by the Prime Minister of India, has approved the introduction of "Amended Technology Upgradation Fund Scheme (ATUFS)“ - A budget of Rs.17,822 crore ( USD 2.6 billion ) has been approved  Employment generation and export by encouraging apparel and garment industry, which will provide employment to women in particular and increase India’s share in global exports.

 Promotion of Technical Textiles, a sunrise sector, for export and employment  Encouraging better quality in processing industry and checking need for import of fabrics by the garment sector.  Promoting conversion of existing looms to better technology looms for improvement in quality and productivity Contents 1: Introduction to Indian Textile Sector 2: Indian Textile Sector Categorization 3: Government of India’s Perform Achieve and Trade (PAT) Scheme: Textile Sector 4: Textile and Apparel market 5: Status of Technology in Indian Textile Sector 6: The need for technology interventions 7: Indian Government Initiative 8: Expectation from global Technology 9: An overview on Arvind

Expectations from Global Technology

Focusing on the requirement of the large segment of the users

The technological solutions should be suitable to enhance energy efficiency

Enhance the Productivity

Enhance the Quality of Product

Technology with Environmental Compliance improve the competitiveness of industry through acquisition of state-of-art technologies. Contents 1: Introduction to Indian Textile Sector 2: Indian Textile Sector Categorization 3: Government of India’s Perform Achieve and Trade (PAT) Scheme: Textile Sector 4: Textile and Apparel market 5: Status of Technology in Indian Textile Sector 6: The need for technology interventions 7: Indian Government Initiative 8: Expectation from global Technology 9: An overview on Arvind

Arvind an Overview Who we are? Interests in Textiles, Retail, $1.3Bn Advanced materials, Founded in 1931 Indian conglomerate Environmental solutions and Real estate

Among Global top 5 Our fabric can go around the earth Every 2 seconds organized Denim manufactures and an Arvind manged brand apparel is pioneers of Denim in India ~6 times sold in India

Own or manage 1 lac acres Largest 22 global patents 30 brands of farmland under Fire Protection Fabric for environmental (International and organic cultivation Producer in India solutions domestic) in India 1 Comprehensive range of products

Denim 1 • Complete range of commonly available denim 1,879 • Speciality products: Prints, Selvedge, Neo Corduroys, Thermolite, 100 Mn mtr Coolmax, Cordura, Kevalar, Dual FX, Lycra Beauty

Wovens • Fabrics: Modern fabrics like Modal, Tencel, Excel, Bemberg, 2 Lycra and range of chemical and mechanical finishes 2,015 • India’s first ammonia mercerization plant 117 Mn mtr • Patented tech to impart structural stability & superior hand-feel Knits • Basic & specialty: Jersey, Pique, Rib, Interlock, Yarn-dyed, 3 Auto stripers, Jacquards & stretch 302 • Fibers: Cotton, Excel, Viscose, Modal, Polyester 9400 Tons • Finishes: Mercerization, Brushing, Peaching etc Voiles • Products: Voiles, Long Cloths, Dress Material, Blouse 4 material 345 • Fabrics: 100% cotton, Polyester viscose blend, Polyester 42 Mn mtr cotton blend Garments • Products: Shirts, Denims, Knits, Suits 5 • Facilities: In house washing and embroidery 883 • Studio Astitva: Design and development cell for Lifestyle 22 Mn pcs Apparel - shirts

FY16 Sales Value (Rs crore) 85 years of innovation and leadership

Launch of True Blue with Sachin Established India’s and India’s first Launch of largest state of the Omni- channel Advanced Profits of Rs. art facility for JV with Launch of E- Material 2.82 lakhs in 2 Sanjay Lalbhai led shirting, garbardine Tommy Commerce Division years Reno-Vision and knits Hilfiger Business

1934 1980 1998 2003 2008 2014 2016

1935 1931 - 1991 2000 2007 2010 2015 1980

Foremost Launch of Launch of The Fabric World’s 3rd Mega Mart Arvind Store Laid the manufacturer Largest foundation of Denim Launched GAP, Arvind Mills with a Producer Launch of TCP, Aeropostale share capital of Garment Sephora Rs. 25.25 lakhs Exports

Division

Certifications

ISO 14001 SA 8000 ISO 9001 ISO 50001 BS OHSAS 18001 Industry leading practices to ensure environmental sustainability

Water One of the largest Use of Sewage water 100% process water Zero Liquid Discharge from nearby communities as from recycled water at plant in Asia at shirting unit process water at Voiles plant Denim laundry facility

Energy India’s most energy Specific energy One of the largest solar efficient textile unit, consumption reduced roof-top plant in Gujarat awarded two years in a row by 20% over last four years

Chemicals Robust quality check In house state of the Globally first textile mill to sign a pact towards zero established for incoming art IQC lab discharge of hazardous chemicals chemicals 1 Relationships with global iconic bands running into decades … Thank You!

Harvinder Rathee [email protected] +91 9714698399