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An

INDUSTRIAL REPORT

On

ARVIND LTD.

Submitted to

Ahmedabad UniversityH.L. Institute of Commerce

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ARVIND LTDA GLANCE

Type Public(NSE, BSE)

Founded 1931

Industry Textile

Products Denim, Knits, Khakhis,

ShirtingHeadquarters Ahmedabad

Revenue Rs 20billion

Website www.arvindmills.com

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INTRODUCTION

Arvind Ltd., was setup with the pioneering efforts of the Lalbahi brothers in 1931.

With the best of technology and business acumen, Arvind has become a trueIndian multinational, having chosen to invest strategically, where the demand has

been high and quality required has been superlative.

Arvind Ltd., has setup the pace for changing global customer demands for textiles

and has focused its attention on select core products. Such a focus has enabled

the company to play a dominant role in global textile arena. With its presence

across the textile value chain, the company endeavors to be a one-stop shop for

leading garment brands.

Styles may be short lived, but for well over decades Arvind has been defining and

shaping many a collection and trendsetting styles across the ramps and retail

outlets of the fashion capitals of the world. Arvind is today synonymous with a

vast range of lifestyle products- be it fabrics or brands.

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HISTORY OF ARVIND LTD.

1931

Arvind limited was setup by three brothers Kastubhai, Narottambhai and

Chimanbhai Lalbhai with a share capital of Rs 2,525,000(US$55,000) backed by

state-ofthe-art technology, with the aim to produce high end-superfine fabric.

1934

With sales reaching Rs 45.76 lacs, and a profit of almost Rs 3 lacs, Arvind

establishes itself amongst the foremost textile units in the country.

1986

An established leader in fine and superfine cotton fabrics for Indian market.

1987

The largest zero discharge green ETP facility in India

First company to bring international shirt brand Arrow in India and to start

dedicated retail outlet for Arrow brand.

1989

Largest Denim & Shirting in South Asia.

3rd largest senior capacity in the world

1997

First Indian company to veticalise the cotton textile business from cotton fields to

apparel retailing.

2008

First company to launch a pan Indian apparel outlet stores Megamart

Largest portfolio of International brands: Lee, Wrangler, Nautica, Jansport,

Kipling, Tommy, Arrow, US Polo, Izod, Pierre Cardin, Palm Beach, Cherokee, HartSchaffner Marx.

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The Lalbhais can trace their descent from Seth Shantidas (c.1590-1659), who was

a dominant figure in the business and civic life of the city. He enjoyed the

patronage of the Moghul emperors to whom he was a trusted jeweler. Shantidas

was amongst the prominent financers of his time as well..

The current surname, Lalbhai, is derived from Lalbhai Dalpatbhai the great great

great grandson of Khushalchand. Lalbhai was born around the time when the first

textile factory in the city went into production. The first manufacturing company

of the Lalbhai family, Saraspur Manufacturing Company was established in 1897.

It started with producing cotton yarn. The second company Raipur Mills was

established in 1905. Due to untimely death Lalbhai Dalpatbhai the reins of his

businesses were handed over to his young sons including a seventeen year old

Kasturbhai Lalbhai. Kasturbhai started the first large scale textile mill under thename of Asoka Mills in 1920. 1930-31 saw the resurgence of second Swadeshi

movement coinciding with the great depression. While different entrepreneurs

reacted to the situation differently Kasturbhai saw this as the decade of

prosperity and growth and established the flagship Arvind Limited in 1931 with an

authorized capital of Rs. 25.25 Lakh. Kasturbhai had also floated mills for families

of his three sisters under the name of Aruna Mills in 1928 and Nutan Mills in 1931

and Ahmedabad New Cotton Mills in 1938.

With the expansion Kasturbhai came to occupy the position of the biggest textile

magnate in the country. Few groups could claim to have made such great strides

during one of the worst periods in Indias industrial history.

With the retirement of Kasturbhai and his younger brother Narottambhai from

active business, the role of the patriarch fell on the shoulders of Arvindbhai. He

along with his brother Niranjanbhai and his cousins Ashokbhai, Ajaybhai,

Chinubhai and Vijaysinhbhai looked into the running of the textile mills,

Siddharthbhai headed Atul Products, and Shrenikbhai, Anilstarch. The group took

over a sick company called Ahmedabad Laxmi Cotton Mills Co. Ltd. and merged

with Arvind Limited and the unit was renamed as Ankur Textiles.

With the third generation of Lalbhais retiring from business Sanjay, Sunil and

Samveg Lalbhai, the fourth generation of Lalbhais, now oversee all the businesses.

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PRODUCTION AT ARVIND LTD.

ARVIND LTD., is established in Ahmedabad with the worlds most advanced

looms to produce best quality shirting products. Arvind Ltd., Ahmedabad hasestablished itself as one of the largest manufacturing center for fabric cotton

shirting.

The main key to success is to keep close relationship with Spinning, Weaving,

Processing units and monitor production cycle first hand. They are working only

with the high-class quality manufacturing standards and dedicated to deliver the

best quality in the market as per expectations of customers.

A trendsetter and an innovator in the Indian Textile market , their expertise has

been brought to bear by their in-house research & development team. Theirinnovations have become milestones in the shirting as well as textile industry as

a whole.

World- Class Facilities:

ARVIND LTD. ,manufacturing facilities includes fully integrated plants in India,

deploying state-of-the-art technology modern quality management systems like

ISO 9001 and Environment Control Systems. All their plants are self-sufficient and

provide staff welfare measures such as education, housing, recreation and

support systems for employee.

There are ambulances and first aid facilities available throughout the day on

24*7 basis. There are multiple fire exits in the unit which guarantees safety of

the workers.

PRODUCTION CAPACITY AT ARVIND LTD.

UNIT PRODUCTION CAPACITYShirting 30 lakh meters/month

Khakis 17 lakh meters/month

Knit fabric 36 tonnes/month

Denim 20 million meters/month

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LOCATION OF INDUSTRYA very first important decision taken by an entrepreneur is about the choice of

location of their business. Location is the place of selection of the site where

entrepreneur are interested to establish industry. Plant location is place where

all internal and external factors are available. Location decision is vital because it

is the decision, which is to be taken once in lifetime of the industry.

The plant of Arvind Ltd. , is located at around half an hour from Ahmedabad city.

The address:

The benefits from this location are as follows:

Huge industrial area

Availability of skilled and unskilled labourers from nearby areas

Vicinity of national highway and helps decrease transportation cost and

fast distribution.

The area of Arvind ltd. is spread around 550acres of land and 275 acres of land isused for manufacting. The manufacturing is mainly divided into three sections.

The sections are: 1) Spinning

2) Weaving

3) Processing

ARVIND LIMITED,Santej, Nr. Khatraj Chokdi,

P.O. Khatraj,

Ahmedabad- 382721

Gujarat.

India

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PRODUCTION PROCESS

The process of manufacturing shirting fabrics involves following steps:

1. Grey Combing:

The cotton received as per specifications in different microns is

opened, scoured, dried, carded and combed. It includes removal of dust,

sweat, natural grease etc.

2. Carding :

Individualization of fibers is achieved and it also separates

vegetable matter. It converts loose fibers into a continuous silver for

subsequent process. It is done in the Blow room.

3. Tow to top Convertor:

Cotton is received in a raw form and is cut in the required length

to match with the fiber for homogeneous blending. So , it is made into rolls

of approximately 70kgs, which is made in nearly 5 minutes.

4. Dyeing:

Cotton thread are dyed separately in required colours.

5. Recombing & Spinning:During the dyeing process, certain degree of disturbances takes

place in the fiber. Hence parallelization is required. In recombing we

achieve this as well as remove short fibers to achieve better quality of yarn

and improve spinning performance. Depending on the count and blend, the

twist is also imparted to give adequate strength to the yarn. This is followed

by auto coning to remove spinning faults, if any ,and the final yarn is

assembled and twisted to make it suitable for weaving.

6. Wrap preparation:Sectional wraps are used and depending on the pattern

required in the fabric, the creel is arranged. The wrap beams are produced

followed by drawing, reaching and denting to prepare the beam for

weaving. For plain shirts direct wrapping is done whereas , for multi-

coloured shirts, sectional wraping is done.

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7. Weaving:

The weaving takes place on the loom with interlacement of wrapand

weft. Number of ends and picks are dependent on the count of weave

required.

8. Mending (Grey checking):

It is the manual operation carried out by trained workmen to

rectify spinning and weaving faults that may be present in the fabric.

9. Finishing:

It is divided into two areas, viz, wet processing and dry processing. In

wet processing, the fabric is washed with detergent to remove stains or

chemicals that are applied during earlier operations. It is also eliminates

stresses on the yarn spinning and weaving. In dry processing, the fabric is

set for dimensional stability, sheared to give fabric which is then pressed

and becomes ready for tailouring.

10.Inspection & folding

100% of the fabric is inspected and graded. The inspected fabric is

cut into length as per market requirement and delivered to warehouse.

QUALITY CONTROL AT ARVIND LTD.

Quality Checking:

First quality check done after drawing-in- process.

A skilled operator identifies such damages in fabric.

Damages may be of 20 different types.

The final quality checks is done after the mercerizing

process Thus more damages are identified & worked upon.

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1930 was a year the world suffered a traumatic depression. Companies across the globe began closing down. In UK

and in India the textile industry in particular was in trouble. At about this time, Mahatma Gandhi championed the

Swadeshi Movement and at his call, people from all India began boycotting fine and superfine fabrics, which had so

far been imported from England. In the midst of this depression one family saw opportunity. The Lalbhais reasoned

that the demand for fine and superfine fabrics still existed. And any Indian company that met this demand would

surely prosper. The three brothers, Kasturbhai, Narottambhai and Chimanbhai decided to put up a mill to produce

this superfine fabric. Next they looked around for state-of-the-art machinery that could produce such high quality

fabric. Their search ended in England. The best technology of that time was acquired at a most attractive price. And a

company called Arvind Limited was born

The Lalbhais A Historical Perspective

The Lalbhais can trace their descent from Seth Shantidas (c.1590-1659), who was a dominant figure in the business

and civic life of the city. He enjoyed the patronage of the Moghul emperors to whom he was a trusted jeweler.

Shantidas was amongst the prominent financers of his time as well. He played an influential role amongst the Jain

community of his time, and it was because of his influence at the Moghul court that Shah Jehan confirmed the rights

of the Jains over the ancient shrines of Shetrunjaya. His grandson, Khushalchand, (1680-1748) too occupied a place

of prominence in the business and social life of the city. He saved the city of Ahmedabad from the marauding

Maratha army in 1725 by paying a ransom of Rs. 5 Lakh on behalf of the whole city. For this act the grateful

mahajans promised in perpetuity, a small amount collected as town duties on goods entering the city to

Khushalchand and his family, and the title of Nagarsheth was bestowed upon him .

1931

Arvind Limited Limited is set up by three brothers Kasturbhai, Narottambhai and Chimanbhai Lalbhai with a share

capital of Rs 2,525,000 (US$55,000) backed by state-of-the-art technology, with the aim to produce high-end

superfine fabric.

1934

With sales reaching Rs 45.76 Lakhs, and a profit of almost Rs 3 Lakhs, Arvind establishes itself amongst the foremost

textile units in the country.

1986

- An uninterrupted record of not missing out on paying dividend to its shareholders.

- An established leader in fine & superfine cotton fabrics for Indian market.

1986

Renovision: First company to bring globally accepted fabrics Denim, yarn dyed shirting fabrics & wrinkle free

gaberdines to India.

1987

- The largest zero discharge green efluent treatment plant in India.

- Commitment to greener world

1987

- First company to bring International shirt brand Arrow to India

- First company to start dedicated retail outlets for Arrow brand.- Awarded various awards for Highest exports and ISO

1989

- Largest denim & shirting in South Asia.

- 3rd Largest denim capacity in the world

1997

First Indian company to verticalise the cotton textile business from cotton fields to apparel retailing.

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1997-1998

First company to introduce ERP SAP business solutions

2008

Company launches 'Megamart', now India's largest value apparel-retail chain

2008

Largest portfolio of International brands: Lee, Wrangler, Jansport, Kipling, Tommy, Arrow, US Polo, Izod, PalmBeach, Cherokee, hart Schaffner Marx

The underlying theme running across the broad spectrum of all business activities at Arvind is that of enhancing

lifestyles of people, across all diversities and demographics.

To serve that end, the corporate vision for Arvind states: 'We will enable people to experience a better quality of life by

providing enriching and inspiring lifestyle solutions'.

PHILOSOPHY

WE BELIEVE

In people and their unlimited potential. In content and focus in problem solving. In teams for effective performance.

In intellect & its power.

WE ENDEAVOUR

To select, train and coach people to obtain higher responsibilities. To nurture talent to build leaders for tomorrow's

corporation. To reward, celebrate and activate all intellectual business contributions.

WE DREAM

Of excellence in all endeavours. Of mutual benefit and prosperity. Of making the world a better place to live in. We

Make Things Happen.

Arvind has a strong Research and Development focus on process improvement, cost reduction and new productdevelopment. This is evident in the fact that Arvind continuously modifies its production process to enhance

flexibility on the use of various types and quality of cotton. To further meet customer needs, Arvind has also

introduced a new dyeing and processing method for denims.

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Date of Establishment 1931Revenue 517.174 ( USD in Millions )Market Cap 14780.6423821 ( Rs. in Millions )Corporate Address Naroda Road, , Ahmedabad-380025, Gujarat

www.arvindmills.comManagement Details Chairperson - Sanjay S Lalbhai

MD - Sanjay S LalbhaiDirectors - Bakul Dholakia, Bakul H Dholakia, G M Yadwadkar, Jayesh

K Shah, K M Jayarao, Munesh Khanna, R V Bhimani, R W Khanna,Renuka Ramanath, S R Rao, Sanjay S Lalbhai, Sudhir Mehta, TarunSheth

Business Operation TextileBackground Arvind was set up in the year 1931 by three brothers Kasturbhai,

Narottambhai and Chimanbhai Lalbhai with a share capital of Rs2,525,000 (US$55,000) to produce high-end superfine fabrics. It wasearlier known as Arvind Mills.

The company has largest portfolio of International brands such as Lee,Wrangler, Nautica, Jansport, Kipling, Tommy, Arrow,

Arvind was set up in the year 1931 by three brothers Kasturbhai, Narottambhai and Chimanbhai Lalbhai with a sharecapital of Rs 2,525,000 (US$55,000) to produce high-end superfine fabrics. It was earlier known as Arvind Mills.

The company has largest portfolio of International brands such as Lee, Wrangler, Nautica, Jansport, Kipling,Tommy,Arrow, US Polo, Pierre Cardin, Palm Beach, Cherokee, hart Schaffner Marx

Arvind has an employee strength of 14000 people as workmen and over 2700 people appointed as management staff.

Business Division

Denim- It produces a wide range of denims such as ring denim, indigo voiles, organic denim, bi -stretch denim and fairtrade certified denim. Arvind is the 3rd largest producer of denim in the world. It has an export network in over 70countries. It caters to clients like GAP, VF Corporation, Levi Strauss, Abercrombie & Fitch, Calvin Klein to name a few.

Shirting- Under this category its product portfolio consists of fabrics with non-iron properties, mechanical finishes, printedfabrics apart from the cotton and cotton blends in linen, lycra, polyester, modal, silk, etc with varieties in yarn dyeds andsolids. It has clients namely Polo, Ralph Lauren, ESPRIT, GAP, FCUK, Zara, Pull & Bear, Louis Philippe, Van Heusen,

Allen Solly, Color Plus, Parx and Park Avenue.

Khaki- It is the only khaki division in South East Asia with an annual production capacity of 21 million meters. Its productmanufactured under this range are chinos, canvas, ribstop, HBT, tussore, cavalry, structures and dobbies.The clientele forthis product are J Crew, Ralph Lauren, Banana Republic, Ann Taylor, Liz Clairborne,(US), Marks & Spencer, Pull & Bear,Benetton, Grotto Gas, Diesel, Madura Garments, Color Plus (India) to name a few.

Knits- It has annual knitting capacity of 10,000 tonnes. Apart from basic knitting techniques, it is also mastered inspecialty knitting techniques such as yarn-dyed auto stripers, jacquards, and stretch fabric.

Voiles- Arvind is the market leader in the manufacture of voiles with an annual capacity of 33 million meters. Thecompany's voiles are basically used for blouse materials and sold through a network of 150 dealers in India. It also exportsvoiles to Switzerland, Sri Lanka and countries in the Middle East.

It also manufactures readymade garment such as jeans, shirts, and knits.

Milestones

In the year 1986 Arvind became first company to bring globally accepted fabrics denim, yarn dyed shirting fabrics andwrinkle free gaberdines to India.

It was first company to bring International shirt brand Arrow to India in 1987.

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Arvind was first company in India to introduce ERP SAP business solution during 1997-1998.

It was first to launch a pan-India apparel outlet store Megamart in the year 2008.

Outlook

Arvind has entered into an agreement with US-based Philips-Van Heusen to market its IZOD sports lifestyle brand in Indi

Product Name Year MonthSales

QuantitySales

Value(Rs.Million) % of STO

Cloth2010 03 12.72 15127.50 65.25

Garments 2010 03 1.92 5552.50 23.95

Knit Fabric2010 03 0.22 516.80 2.23

Yarn2010 03 0.25 364.10 1.57

Misc Sales2010 03 0.00 364.00 1.57

Utility2010 03 0.00 297.40 1.28

EPABX2010 03 0.02 193.90 0.84

Grey2010 03 0.08 54.60 0.24

Delta2010 03 0.01 46.40 0.20

Others 2010 03 0.00 5.60 0.02

Grey2010 03 38008.00 2.00 0.01

IT Services2010 03 0.00 0.10 0.00

Yarn2010 03 0.00 0.00 0.00

Cloth2010 03 0.00 0.00 0.00

Spindles2010 03 0.00 0.00 0.00

Rotors2010 03 0.00 0.00 0.00

Stitching Machines2010 03 0.00 0.00 0.00

Knitting Machines 2010 03 0.00 0.00 0.00

Looms2010 03 0.00 0.00 0.00

EPABX/RAX System Lines2010 03 0.00 0.00 0.00

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S.No Name Designation

1Sanjay S Lalbhai Chairman

3Sanjay S Lalbhai Managing Director

2R V Bhimani Company Secretary

4Sudhir Mehta Director

5Bakul Dholakia Director

6Munesh Khanna Director

7Renuka Ramanath Director

8G M Yadwadkar Nominee Director - IDBI

9Jayesh K Shah Director - Finance & Chief Financial Officer

10R W Khanna Nominee Director - EXIM Bank

11Jayesh K Shah Director - Finance & Chief Financial Officer

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