A Project Report On

A PROJECT REPORT ON

“Comprehensive Study of all functional areas” FOR “SUPREME FILAMENTS(P)LTD."

Submitted to C K SHAH VIJAPURVALA INSTITUTE OF MANAGEMENT

IN PARTIAL FULFILLMENT OF THE REQUIREMENT OF THE AWARD FOR THE DEGREE OF

MASTER OF BUSINESS ADMINISTRATION

Under Gujarat Technological University

UNDER THE GUIDANCE OF

Faculty Guide Company guide Dr.Kerav Pandya Mitul Mehta Prof. CKSVIM Production Head

Submitted by PRIYANK SHAH Enrollment no: 117050592031 M.B.A-SEMESTER - III

C K Shah Vijapurwala Institute of Management M.B.A PROGRAMME Affiliated to Gujarat Technological University Ahemdabad July2012

PREFACE

The student of M.B.A. 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(P)ltd..

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.

ACKNOWLEDGEMENT

I am highly thankful to Mr. Ajay R Gupta for allowing me as a trainee for summer internship of 45 days i.e., from 18 th June to 28 July 2012 in addition to helping me in my practical studies at the M.B.A and study the entire organization and various aspects of managerial functions. They provided me many details and enlighten me in preparation of this project report.

I take this opportunity to thank our Dr. Kerav pandya who had guided me throughout the project and gave me valuable suggestions and encouragement.

DECLARATION

I, Priyank shah, hereby declare that the report for “summer training project” entitled “ Comprehensive Study of all functional area ” is a result of my own work and my indebtedness to other work publication references, if any, have been duly acknowledged.

Place: Vadodara Date :

Priyank shah

EXECUTIVE SUMMARY

The Supreme filaments(P)ltd. 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(P)ltd. 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 segments and to become cost efficient to remain competitive in the market.

INDEX Chapter Subject Page no. 1 Textile Industry 1 1.1 Indian Textile Industry 2 1.2 Textile Industry 3 1.3 History of Textile Industry 4-6 1.4 Current Scenario For Textile Industry 7-8 1.5 Latest News In Textile Sector 9 1.6 Polyester Industry 10 1.7 Advantages of Polyester 10-11 Vis-à-vis Cotton 1.8 Per Capita Consumption 12 1.9 Unique Characteristics of Polyester Fiber vis-à-vis 13-14 Cotton Fiber 2 Introduction to the Company 15 2.1 Business Overview 16 2.2 History & Major Events 17 2.3 Business Strategy 18 2.4 Brief Details About POY Manufacturing Unit 19 2.5 Infrastructure Facility 20-24 2.6 Future Prospects 25 2.7 Licensed Installed capacity & Capacity Utilization 25 3 Production Department 26 3.1 Proposed Product POY 27-32 3.2 Existing Product for PTY 33-35 4 Human Resource Department 36 4.1 Recruitment 37 4.2 Selection 37 4.3 Training & Development 37 4.4 Communication 38 4.5 Performance Appraisal 39 4.6 Compensation 39 4.7 Employee Benefits & Services 39 4.8 Organizational Chart 40 4.9 Distribution Channel 40 4.10 Department 41 5 Marketing Department 42 5.1 Market For PTY & POY 43 5.2 Distribution channel 43 5.3 Competition 44 5.4 Approaches to Marketing & Proposed Marketing Setup 44 5.5 Competitive Strengths 45 5.6 SWOT Analysis 46-48 6 Finance Department 49 6.1 What is Finance? 50 6.2 key Activities of the Financial Manager 51 6.3 Emerging role of Finance Manager in India 51 6.4 Insurance 51 7 Suggestions 52-53 8 Conclusion 54-55 9 Bibliography & References 56-57

CHAPTER – 1 TEXTILE INDUSTRY

1.1 Indian Textile Industry

Textile Industry is one of India’s 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 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

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 $ 150 billion by 2015 of which the share of garments will be US $ 70 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 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.

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 vertical loom, 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 warp

4 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 of manufacture.

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.

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 mechanism 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.

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.

Hoptonmill

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 superb range of ladies' apparel fabrics in cashmere and

6 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.

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

7 domestic measures and weak domestic infrastructure in several developing and least developed countries.

The elimination of quota restriction will open the way for the most competitive 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 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.

1.5 Latest News in Textile Sector

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 of garments on the basis of composition of textiles. After the phasing out of quota regime under the multi-fiber pact, India can envisage its textile sector becoming $200b industry by 2014. This will include exports of $100b. 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. 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. 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.

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

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 cotton’s 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.

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. 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 India’s 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.

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 fashion trends, 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. Men’s 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.

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; it’s 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-à-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 1.9 Unique Characteristics of Polyester Fiber Vis a Vis Cotton Fiber

Polyester Yarns is a substitute for cotton and other synthetic yarns because 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 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

CHAPTER – 2 INTRODUCTION TO THE COMPANY

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 manufacture fancy yarn for high value dress materials. The basic raw material for manufacturing PTY is Partially Oriented Yarn (POY). With an objective to avail benefits of backward integration by manufacturing 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 1998, 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.

In the year 2002-03, 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 2003-04, 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 2003-04, the funding assistance from The South Indian Bank Limited was taken over by State Bank of India. In the year 2004-05, 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 2007.

In the year, 2005-06 itself, they further planned to move into backward integration for production of POY, which is the key raw material for 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 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 the unit. This unit is located within 10 kilometers from our other existing units.

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.

The construction of factory building is in progress and is expected to be complete by January 2008. As per certificate received from VMS Consulting Engineer dated 15th November 2006, 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 as under:

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.

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.

1) Utilities

A) Power 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 21

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 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) 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 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

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:

Particulars No. of employees Managerial and Supervisory Staff 11 Office Staff 3 Peon 2 Total 16

For the New Project (for POY) The additional manpower requirements for the new project are as here under: Particulars No. of employees Managerial, Technical and Supervisory Staff 11 Skilled & Semi Skilled 91 91 Total 102

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.

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

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. 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 ORIENTED YARN (POY) Semi Dull Yarns with Round Cross-Section Denier Filaments 80 34 100 34 115 34 110 68 110 100 126 34 126 48 130 34 130 48 141 34 141 48 141 68 145 34 145 48 150 34 235 34 235 48 245 68 265 34

265 48 265 100 265 150 235 100 235 150 350 34 470 68 530 68 All yarns are interlaced for high speed processing

PHYSICAL PROPERTIES Product 115/34 235/34 126/34 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 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

CRYSTILIZER

DRYER

DRIED CHIPS HOPPER

EXTRUDER

CONTINUOUS POLYMER FILTER

MANIFOLD 29

SPINNING BEAM

QUENCHING CHAMBER

SPIN FINISH OIL APPLICATION

INTERMINGLING

WINDER

QUALITY & CHECKING

PACKING & DESPATCH

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.

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.

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 31

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.

• 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)

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 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

FEED ROLLER - 3

TAKE-UP

QUALITY CHECKING

PACKING & DESPATCH

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 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.

CHAPTER – 4 HUMAN RESOURCE DEPARTMENT

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(P)ltd. 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.

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 non–managerial 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(P)ltd. 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.

They are providing an open environment, which enabling free interaction between all levels. The communication is provided in the following manner:

Director

Manager

Master

Worker

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 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 3) Housing Facilities

4.8 ORGANIZATIONAL CHART

Director

Manager

Master

Worker

4.9 DISTRIBUTION CHANNEL

The Supreme filaments(P)ltd. distribute their products through the following two ways:

1) Directly to the viewers: -

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

CHAPTER – 5 MARKETING DEPARTMENT

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 its cost- effectiveness and domestic availability. Domestic availability of cotton also influences POY availability. As per the CRIS INFAC Report, POY demand is expected to grow at nearly 5.6 per cent in the medium term.

5.2 Distribution Channel

The Supreme filaments(P)ltd. 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.

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

1. Reliance Group, 2. Indo Rama, 3. Sanghi Polyester, 4. Century Enka, 5. 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 the major consumption centers of texturised yarn.

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 don’t have any export obligations. However, in future they may sell their products (both PTY & POY) in export markets also.

5.5 Competitive Strengths

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(P) LTD has a pro-active management and promoters have hands on experience in manufacturing and trading of textile products.

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(P) 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(P) LTD and so cost wise, SUPREME FILAMENTS(P) LTD may be cheaper.

2. Overseas market is highly competitive. Indian manufacturers including SUPREME FILAMENTS(P) 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.

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

4. Government’s policy for interest subsidy will facilitate SUPREME FILAMENTS(P) LTD’s 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(P) LTD enjoys cost advantages, which will enable it to withstand competition.

CHAPTER – 6 FINANCE DEPARTMENT

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 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

1.2 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

1.3 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 : -

All units have been insured through United India Insurance Co. Limited and all the policies are valid as on date.

CHAPTER – 7 SUGGESTIONS

The Supreme filaments(P)ltd. is mainly covering the whole market. Thus it could capture more the national market.

The Supreme filaments(P)ltd. should make their product available in more areas.

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

The Supreme filaments(P)ltd. 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(P)ltd. is a progressive company having a mass production.

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(P)ltd. 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

The Supreme filaments(P)ltd.