TEXTILES LIMITED
GROUP 6
Abhigyanjit | Gwendoline | Leonore | Manorama | Mahesh | Monica | Sushmita
CASE FACTS
SITARAM TEXTILE MILLS
Government owned textile mill in India. Mostly operates in Kerala, Andhra Pradesh, Mangalore and
Tamil Nadu
Product mix consisted of a wide variety of cotton fabric in addition to yarn. Poplin was the best
selling fabric
Traditional channels of distribution that consists of agents, wholesale distributors and retailers
Overall growth in the past 15 years , the South Indian women ( age > 20 years) are
number of mills rose from 700 to 1416 major users of Underskirts, Salwaar Kameez
Though the capacity utilization of loom was was worn by women between 15 to 30 years
poor, Kerala fared better than the rest of the Men wear Dhoties inside home , outside they
country wore Pants elderly wore Dhoti even outside
As a result, the loom sector contributed to Dhoties and Lungies were more used in the
94% of the total cloth production, rest was lower strata and in rural areas
produced by the mills Purchase of uniforms was made from Schools
Government permitted only marginal or selected shops and private schools
expansion in weaving capacity for the preferred uniforms made from blends
organized sector, thus the weaving capacity Chudidar/salwar kameez were made from
for the mills got stagnated cotton, polyster and cotton polyester
This caused a growth in the decentralized Cotton was preferred for nightie
power loom and handloom sector, that gained Cotton was used equally for inner and outer
at the expense of the organized mills wear while polyester and blends were used for
outer wear
CONSUMER DEMANDS AND PREFERANCES
Cotton demand was increasing at slow pace. Non- About one third of population was unaware
Cotton Fibre’s demand was declining rapidly. of Power loom's contribution to India
Blended fabric was increasing in demand Higher income groups were inclined to
Major purchase for textile was for sarees, ready Branded items
made garment and shirting/ poplins For school uniforms, blends were mostly
Sales for lungies and long cloth was declining preferred
Sales increased for better quality poplins, poplins For industrial workers, uniform cotton cloth
of meters width, bizzie lizzi was demanded
Printed bedsheets were preferred over plain
bedsheets
Chudidars fabric was not in demand
because Garments from Ahmedabad &
Mumbai were cheaply available and fabric
required larger stock than garments of
equal varieties
Attribute based performance:
Kerala – quality (mills advantage)
Tamil Nadu, Karnataka – softness (cotton)
Andhra Pradesh, Kerala – stiffness of
polyester
COMPETITION
Why Lower priced variants available due to lower cost of labor in few places
Segment Competition
Poplin • Century and Umaid Mills are preferred in higher price range
• Process houses like Sreenivasa Processing or Balhotra Mills have stronger presence in South Kerala
• In interior areas Polyster viscose (Bizzi Lizzi) are replacing poplin demand
• Better turnover discounts for dealers are offered by Western India cotton mills in North Kerala
Fabric for Brassieres • Limited competition from low cost producers
• Ram Kumar Mills, Hindustan Spinning & Weaving Mills, Western Indian cotton are among competitors
Bedsheets & Lungis • Small manufacturers were exempted from 25% excise duty
• Low cost printed bedsheets available from Erode
Nighties • High demand for “Microsoft” brand nighties from Hindustan Cloth Manufacturing Pvt Ltd
Uniform Shirting & Suiting • Products from Davengeree and Hindustan Spinning & Weaving mills are preferred in the market
• Process houses providing Rs. 10-15 cheaper
• Lower priced items from Surat have strong market presence
High Quality Dhoties • Strong brand loyalty towards Century Mill’s “Param Sukh” in Cotton Dhoties segment
• In Chiffon and Blends market, Premier Mills commands brand loyalty
• In interior markets, lower priced brands had command
IMMEDIATE PROBLEMS / ISSUES TO ADDRESS IN THE
NEXT 1-3 YEARS
Operational Losses for the company 3 years in
row Growth of power loom sector in unorganized sector
• 1993-94: (-82.75lac) 1.Evasion of excise tax
• 1994-95: (-163.11lac) 2.Lower price due to lower labor costs
• 1995-96: (-148.23lac) 3.Lower cost is crucial for higher varieties of casements,
Poplins – main product; not generating enough mulls, long cloth, medium poplin
sales
Inability to contact schools and institutions effectively
• Break even at 190 million; current sales – 131.4 million
• Problem of stock accumulation Archaic distribution channel - no control over flow of goods
• Need to push existing items in product line
AP’s agent is indicating a drop in the overall demand for
Sitaram’s products. Also, Limited contribution by the Tamil
Severe competition Nadu agent
• From unorganized sector in low cost clothing Competition from other mills
• From organized sector in premium clothing (brand
name from high end brands) 1.Other mills are offering same product at lower prices
• From blended fabrics as substitutes (Underskirts 2.Also providing better credit terms for certain fabrics
earlier made from poplin, replaced by blends)