final project on century textiles industry ltd

INTRODUCTION:

The Indian textile industry is one of the oldest and most significant industries

in the country. It accounts for around 4 per cent of the gross domestic product

(GDP), 14 per cent of industrial production and over 13 per cent of the country's total

export earnings. In fact, it is the largest foreign exchange earning sector in the country.

Moreover, it provides employment to over 35 million people. The Indian textile industry

is estimated to be around US$ 52 billion and is likely to reach US$ 115 billion by

2012. The domestic market is likely to increase from US$ 34.6 billion to US$ 60

billion by 2012. It is expected that India's share of exports to the world would also

increase from the current 4 per cent to around 7 per cent during this period. India's textile

exports have shot up from US$ 19.14 billion in 2006-07 to US$ 22.13 billion in 2007-08,

registering a growth of over 15 per cent.

Century Textile and Industries is 113 years old textile, cement, paper manufacturing

and Export Company based in Mumbai. The main business activity involves manufacture

of cotton textiles, yarn, denim, viscose filament rayon yarn, tire-cords, caustic soda,

sulphuric acid, salt, cement, pulp, and paper. The company also has a substantial

dominance in the international textile markets and exports its products to more than 45

countries around the globe. Century Textiles & Industries Limited is an IS/ISO 9001:2000

and ISO 14001 company. Government of India also awarded with 'Three Star Export

House' status Century Textiles & Industries Ltd is one of the Asia’s largest

Composite 100% Cotton Textile Mill. The company is not only the trend setter in

Cotton Textiles but has also made a remarkable presence in Yarn, Denim, Viscose

Filament Rayon Yarn, Tyrecords, Caustic Soda, Sulphuric Acid, Salt, Cement and Pulp

& Paper. During the quarter company spends nearly Rs 625 crore in the first phase of

Century Mill’s land development in Mumbai. Company plans to build a hotel and a

commercial complex for IT & ITeS companies on 20- acre land. Company plans to start

commercial real estate development at its Worli mill land. During the quarter company

opens a new state-of-art mill in Gujarat. The Cement segment witnessed a revenue growth

of 31.4% yoy in Q2’10, followed by 23.9% yoy growth in the textile segment. The top line

of the company is expected to grow at a CAGR of 12% over FY08 to FY11E.

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INDIAN TEXTILE INDUSTRY:

The textile industry is the largest industry of modern India. It accounts for over 20

percent of industrial production and is closely linked with the agricultural and rural

economy. It is the single largest employer in the industrial sector employing about 38

million people. If employments in allied sectors like ginning, agriculture, pressing, cotton

trade, jute, etc. are added then the total employment is estimated at 93 million. The net

foreign exchange earnings in this sector are one of the highest and, together with carpet

and handicrafts, account for over 37 percent of total export earnings at over US $ 10

billion. Textiles,1 alone, account for about 25 percent of India’s total forex earnings.

India’s textile industry since its beginning continues to be predominantly cotton

based with about 65 percent of fabric consumption in the country being accounted for by

cotton. The industry is highly localized in Ahmadabad and Bombay in the western part of

the country though other centers exist including Kanpur, Calcutta, Indore, Coimbatore,

and Sholapur.

The structure of the textile industry is extremely complex with the modern,

sophisticated and highly mechanized mill sector on the one hand and the hand spinning

and hand weaving (handloom) sector on the other. Between the two falls the small-scale

power loom sector. The latter two are together known as the decentralized sector. Over

the years, the government has granted a whole range of concessions to the non-mill sector

as a result of which the share of the decentralized sector has increased considerably in the

total production. Of the two sub-sectors of the decentralized sector, the power loom sector

has shown the faster rate of growth. In the production of fabrics the decentralized sector

accounts for roughly 94 percent while the mill sector has a share of only 6 percent.

Being an agro-based industry the production of raw material varies from year to year

depending on weather and rainfall conditions. Accordingly the price fluctuates too.

1

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GLOBAL SCENARIO:

The textile and clothing trade is governed by the Multi-Fiber Agreement (MFA)

which came into force on January 1, 1974 replacing short-term and long-term

arrangements of the 1960’s which protected US textile producers from booming Japanese

textiles exports. Later, it was extended to other developing countries like India, Korea,

Hong Kong, etc. which had acquired a comparative advantage in textiles. Currently, India

has bilateral arrangements under MFA with USA, Canada, Australia, countries of the

European Commission, etc. Under MFA, foreign trade is subject to relatively high tariffs

and export quotas restricting India’s penetration into these markets. India was interested

in the early phasing out of these quotas in the Uruguay Round of Negotiations but this did

not happen due to the reluctance of the developed countries like the US and EC to open up

their textile markets to Third World imports because of high labor costs. With the

removal of quotas, exports of textiles have now to cope with new challenges in the form of

growing non-tariff / non-trade barriers such as growing regionalization of trade between

blocks of nations, child labor, anti-dumping duties, etc.

Nevertheless, it must be realized that the picture is not all rosy. It is now being

admitted universally and even officially that the year 2005 AD is likely to present more of

a challenge than opportunity. If the industry does not pay attention to the very vital needs

of modernization, quality control, technology up gradation, etc. it is likely to be left

behind. Already, its comparative advantage of cheap labor is being nullified by the use of

outmoded machinery.

With the dismantling of the MFA, it becomes imperative for the textile industry to

take on competitors like China, Pakistan, etc., which enjoy lower labor costs. In fact the

seriousness of the situation becomes even more apparent when it is realized that the non-

quota exports have not really risen dramatically over the past few years. The continued

dominance of yarn in exports of cotton, synthetics, and blends, is another cause for worry

while export of fabrics is not growing. The lack of value added products in textile exports

do not augur well for India in a non-MFA world.

Textile exports alone earn almost 25 percent of foreign exchange for India yet its

share in global trade is dismal, having declined from 10.9 percent in 1955 to 3.23 percent

in 1996. More significantly, the share of China in world trade in textiles, in 1994, was

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13.24 percent, up from 4.36 percent in 1980. Hong Kong, too, improved its share from

7.06 percent to 12.65 percent over the same period. Growth rate, in US$ terms, of exports

of textiles, including apparel, was over 17 percent between 1993-94 to 1995-96. It

declined to 10.5 percent in 1996-97 and to 5 percent in 1997-98. Another disconcerting

aspect that reflects the declining international competitiveness of Indian textile industry is

the surge in imports in the last two years. Imports grew by 12 percent in dollar terms in

1997-98, against an average of 5.8 percent for all imports into India. Imports from China

went up by 50 percent while those from Hong Kong jumped by 23 percent.

Global factors influencing textile industry :

The history of the textile and clothing industry has been replete with the use of

various bilateral quotas, protectionist policies, discriminatory tariffs, etc. by the developed

world against the developing countries. The result was a highly distorted structure, which

imposed hidden costs on the export sectors of the Third World. Despite the fact that

GATT was established way back in 1947, the textile industry, till 1994, remained largely

out of its liberalization agreements. In fact, trade in this sector, until the Uruguay Round,

evolved in the opposite direction. Consequently, since 1974 global trade in the textiles and

clothing sector had been governed by the Multi-fiber agreement, which was the sequel to

an increasingly pervasive quota regime that began with the Short-term arrangement on

cotton products in 1962 and followed by the Long-Term arrangement. After the

successful conclusion of the Uruguay Round in 1994, the MFA was replaced by the

Agreement on Textiles and Clothing (ATC), which had the same MFA framework in the

context of an agreed, ten year phasing out of all quotas by the year 2005. The section that

follows takes a brief look at the history of these protectionist regimes as also a more

detailed look at the MFA and the ATC.

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COMPANY PROFILE:

Incorporated in the year 1897 as a Public Limited Company, Century Textiles and

Industries Limited had only one industrial unit – Cotton Textile Mills till 1951. Since then

the company has made rapid progress in widely diverse fields. At present, the company is

a trendsetter in cotton textiles and also has a remarkable presence in the yarn, denim,

viscose filament rayon yarn, tyrecords, caustic soda, sulphuric acid, salt, cement, and pulp

and paper industries. In 2008, the company added to its fold, a vertically-integrated textile

plant, Birla Century at Jhagadia, Bharuch, in the state of Gujarat. This is a fully composite

cotton textile plant from blow room to made-ups, stretching over an area of 100 acres with

an abundant supply of water. The company's 100-per cent cotton yarn unit is situated in

Madhya Pradesh, with a capacity of 24,960 spindles. Its denim unit is also situated in

Madhya Pradesh, with a capacity of 21 million meters of denim fabric per year. Viscose

filament yarn (VFY), tyrecord and chemicals are manufactured at Kalyan (near Mumbai)

in Maharashtra. The company has four cement plants at different locations, with a total

cement manufacturing capacity of 9.25 million tonnes per annum. The company is in the

process of increasing capacity to 10.00 million tonnes per annum by July 2013 and to 12.8

million tonnes per annum by March 2014, after completion of its expansion plan. The

company's pulp and paper plant has a rayon grade pulp capacity of 31,320 tonnes per

annum, writing and printing paper capacity of 1,97,800 tonnes per annum and capacity of

36,000 tonnes per annum for tissue paper. Century Pulp & Paper has recently set up a 500

tonnes per day multilayer packaging board plant adjacent to its existing pulp and paper

plant at Lalkua, Uttarakhand. The company is managed by a Board of Directors

comprising eminent industrialists, businessmen and dedicated professionals. The

Chairman of the Board is Mr. B.K. Birla.

Century Textiles produces 100% cotton fabrics. Century's cloth covers the length and

breadth of the Globe. In the highly competitive international markets, Century's cloth has

carved a niche for itself. In fact, Century Fabric has charmed its way into: Bahrain,

Bangladesh, Belgium, Canada, China, Comoros, Egypt, France, Germany, Honduras,

Hong Kong, Hungary, Indonesia, Israel, Italy, Japan, Jordan, Kenya, Kuwait,

Madagascar, Mauritius, Morocco, Nepal, Netherland, Panama, Portugal, Russia, South

Africa, South Korea, Singapore, Spain, Sri Lanka, Sweden, Switzerland, Taiwan,

Thailand, Turkey, U.A.E., U.K., Uganda and USA.

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VISION, MISSION AND VALUES:

Vision:-

To manufacture products comparable to international standards, to be customer-

focused and globally competitive through better quality, latest technology and continuous

innovation.

Mission:-

To manufacture world-class products of outstanding quality that gives our customers a

competitive advantage through superior products and value, so we can make every

customer smile.

To encourage people's ownership, empowerment and working under team structure.

To attain highest level of efficiency, integrity and honesty.

Values:-

Customer's satisfaction and delight.

Superior quality of performance.

Concern for the environment and the community.

Passionate about excellence.

Fair to all.

To provide a safe workplace and promote healthy work habits.

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MANAGEMENT OF THE COMPANY:

Management team: The company is managed by a Board of Directors, comprising eminent industrialists,

businessmen and dedicated professionals under the Chairmanship of Shri B. K. Birla.

The composition of the Board of Directors of the company as on May 15, 2013 is as

under:

Shri B. K. Birla, Chairman

Shri Kumar Mangalam Birla

Shri Pradip Kumar Daga

Shri Arvind C. Dalal

Shri Amal Ganguli

Shri B. L. Jain (Whole time Director)

All the divisions / plants are headed by highly qualified professionals as under:

Senior Executives:

Birla Century, Century Yarn and Century Denim

Shri R. K. Dalmia - Senior President

Shri D. K. Agarwal – President (Corporate Finance) & Secretary

Century Rayon, Tyrecord and Chemicals

Shri O. R. Chitlange – Senior President

Shri R. Lalwani - President (Commercial)

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Century, Maihar, Manikgarh and Sonar Bangla Cements

Shri B. L. Jain – Senior President

Century Cement and Sonar Bangla Cement

Shri Alok Patni - President (Works)

Maihar Cement Unit I

Shri R. K. Vaishnavi - President (Works)

Maihar Cement Unit II

Shri R. S. Doshi - Executive President (Commercial)

Manikgarh Cement Unit I

Shri P.S. Bakshi - President (Works)

Manikgarh Cement Unit II

Shri J. L. Tiwari - Senior Executive President (Plant)

Century Pulp & Paper

Shri Bipin Lal – C. E. O.

Auditors

M/s Dalal & Shah, Mumbai

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BUSINESS SEGMENTS:

The Company has made rapid progress in expanding and diversifying its

activities and today it is a well diversified conglomerate. The details of activities

presently being carried on by the Company are as under:-

Century Textiles and Industries' diverse business interests are driven by the following

divisions:-

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Birla Century:

Birla Century, a state-of-the-art, vertically integrated plant, was set up in 2008-2009

at Jhagadia, Bharuch, in the state of Gujarat.

Spread over an area of 100 acres, Birla Century uses sophisticated machinery to

produce a wide range of premium textiles – from suiting and shirting to fine fabrics and

household linen. Innovative finishes such as wrinkle-free, easy-care and anti-bacterial are

imparted to fabrics through world-class automated processing with eco-friendly, non-toxic

dyes and chemicals.

The plant is equipped with a modern mechanical and chemical laboratory to test

fabrics as per international norms and has a pilot sampling facility to provide quick

services for the development of samples. It is also equipped with an in-house design

studio, and a research and development centre for continuous innovation in designs as per

the latest international trends.

Products:-

Shirting: Our shirting comes with innovative finishes such as wrinkle-free, bio-polish and

crease resistance in whites, solids, yarn-dyed, dobby’s, structured etc in 100-per cent

cotton, cotton blends and linen.

Suiting: Our suiting is characterized by high dimensional stability, or, in other words, the

ability to retain its size and form. It is wrinkle-free, crease-recoverable, amazingly smooth,

and exudes a brilliant luster.

Fancy and finer varieties: We have a full range of products – poplins, cambric’s, lawns,

twills, mulls, voiles, dobby’s and slubbed dress materials for retailers and garment

manufacturers.

Bed linen: The home textiles division of Birla Century manufactures premium quality

household linen that is elegantly tailored for domestic and international markets.

Century Yarn:

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Century Yarn, a vertically integrated plant, was set up in 1994 at Satrati village in the

state of Madhya Pradesh.

The ultra-modern plant is equipped with 24,960 spindles for the manufacture of

cotton yarn and is on par with the best in the world. The plant has an optimum mix of

high-tech machinery and high-caliber personnel.

Products:-

Century Yarn offers 100-per cent cotton combed yarn in the count range of 20s to 40s

in singles and doubles. A variety of conventional cotton of varying fiber specifications are

used to create a better quality of yarn, that is suitable for producing world-class cotton

fabrics in its category.

Century Denim:

Century Denim, a vertically integrated plant, was established in 1997, at Satrati

village in the state of Madhya Pradesh. The ultra-modern plant is capable of producing 21

million metres of denim fabric annually.

A confluence of sophisticated technology and world-class industrial design, the plant

is an example of impeccable technological finesse. The plant is equipped with BARCO

hardware and functionalities and boasts a biological effluent treatment and reuse plant

with zero discharge.

Products:-

Century Denim manufactures fine denim fabrics, with liquid indigo sourced from

DyStar to achieve the perfect shade of blue. The division offers denim in indigo blue /

dark shades in flat and emerised finishes.

Cottons by Century:

A leader in the manufacture of cotton fabrics, it was a natural progression to

introduce Century's own range of readymade clothing. In 2002, Century ventured in to the

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readymade garment segment with superfine cotton shirts, T-shirts, trousers, kurtas and

accessories like ties, belts, handkerchiefs.

Initially, Century's products were sold through the exclusive brand outlets called

Mangal Paridhan. These outlets were later phased out when Century ventured into the

competitive world of retailing with its own brand – Cottons by Century.

Products:-

With contemporary styling and color, Cottons by Century features a range of distinct

and structured formal wear, chic and contemporary day wear as well as elegant evening

wear. The product range includes:

Men's wear: Shirts, trousers and casual wear

Women's wear: Formal wear, ethnic wear and western wear

Accessories: Ties, belts, socks, handkerchiefs and cufflinks

It also retails high-quality home fashion. Century's exclusive range of bed and bath

accessories adds that elusive touch of class and elegance.

Century Rayon:

Century Rayon was set up in 1956 at Kalyan, near Mumbai, in the state of

Maharashtra, to manufacture viscose filament rayon yarn.

Over the years, the division has grown and diversified. Today it is one of the largest

producers of viscose filament yarn (VFY) in India. In 1963, the company commenced

production of viscose tyre yarn and industrial yarn, followed by the production of caustic

soda in 1964. At Century Chemicals, Jamnagar (Gujarat), the company produces industrial

salt mainly for captive consumption.

Century Rayon exports its products all over the world. Tyre yarn is mainly exported

to Western Europe and Japan where it is used as a reinforcement material in ultra high-

performance passenger car tyres. Rayon filament yarn, which is used for textiles and

apparel application, is exported to North Africa, North and South America, and Western

Europe.

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Products:-

Century Rayon manufactures high-quality VFY, continuous spun yarn, rayon tyre

yarn and a number of chemicals.

Century Cement:

Century Cement, a state-of-the-art cement plant, was established in 1974 at Baikunth

(Tilda), Raipur, in the state of Chhattisgarh.

Set up with the initial capacity of 0.6 million TPA of Portland cement, today, the

plant produces 100-per cent blended cement with a total capacity of 2.1 million TPA. The

cement plant is equipped with a captive power plant to ensure uninterrupted power supply.

The company sells its cement under the brand name Birla Gold.

Products:-

Century Cement produces 100-per cent blended cement, i.e. Portland Pozzolana

cement and Portland slag cement.

Maihar Cement:

Maihar Cement operates two cement manufacturing units that are located at Maihar,

Satna, in the state of Madhya Pradesh. The total installed capacity of the division is 3.8

million tonnes of cement per annum.

Maihar Cement Unit I

In 1980, the company established a Portland cement plant at Maihar with a capacity

of 0.8 million tonnes per annum. The present capacity stands at 1.80 million tonnes per

annum.

Maihar Cement Unit II

In 1995-96, another Portland cement plant was established with a capacity of 1

million tonnes per annum, adjacent to the existing plant at Maihar. The present capacity is

2 million tonnes per annum.

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Products:-

Maihar Cement is a pioneer in the production of blended cement namely, Portland

Pozzolana cement.

Manikgrah Cement:

Manikgarh Cement was established in the year 1985 at Gadchandur, Chandrapur, in

the state of Maharashtra.

This high-tech cement plant had an initial capacity of 1 million TPA which has been

expanded to its present capacity of 1.9 TPA.

Products:-

Manikgarh Cement produces ordinary Portland cement and Portland Pozzolana cement.

Century Pulp & Paper:

Century's rayon and/or paper grade pulp, and writing and printing paper unit was

established in 1984 at Lalkua, near Nainital in the state of Uttarakhand.

Its second paper unit, based on bagasse manufacturing, is adjacent to the existing

pulp and paper plant at Lalkua. It was established in 1995. The company also has a prime-

grade tissue paper plant at Lalkua.

The company's fiber line (pulp plant), with a capacity of 1.62 lac tonnes per annum,

and multilayer packaging board plant, with a capacity of 1.8 lac tonnes per annum, are

near completion. Production has begun and is expected to stabilize in due course.

Products:-

The division's range of products includes a large variety of writing and printing

paper, tissue paper and paper board. The company also manufactures raw material for

viscose filament yarn, staple fiber and paper grade pulp.

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SWOT ANALYSIS:

Meaning:

SWOT is an acronym for Strengths, Weaknesses, Opportunities and Threats. By

definition, Strengths (S) and Weaknesses (W) are considered to be internal factors over

which you have some measure of control. Also, by definition, Opportunities (O) and

Threats (T) are considered to be external factors over which you have essentially no

control.

A SWOT analysis can be carried out for a product, place, industry or person. It

involves specifying the objective of the business venture or project and identifying the

internal and external factors that are favorable and unfavorable to achieving that objective.

The technique is credited to Albert Humphrey, who led a convention at the Stanford

Research Institute (now SRI International) in the 1960s and 1970s using data from Fortune

500 companies. The degree to which the internal environment of the firm matches with the

external environment is expressed by the concept of strategic fit.

Setting the objective should be done after the SWOT analysis has been performed.

This would allow achievable goals or objectives to be set for the organization.

Strengths: characteristics of the business or project that give it an advantage

over others

Weaknesses: are characteristics that place the team at a disadvantage relative to

others

Opportunities: elements that the project could exploit to its advantage

Threats: elements in the environment that could cause trouble for the business

or project

Identification of SWOTs is important because they can inform later steps in planning

to achieve the objective.

First, the decision makers should consider whether the objective is attainable, given

the SWOTs. If the objective is not attainable a different objective must be selected and the

process repeated. Users of SWOT analysis need to ask and answer questions that generate

meaningful information for each category (strengths, weaknesses, opportunities, and

threats) to make the analysis useful and find their competitive advantage.

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http://en.wikipedia.org/wiki/Strategic_fit

http://en.wikipedia.org/wiki/Fortune_500

http://en.wikipedia.org/wiki/Fortune_500

http://en.wikipedia.org/wiki/SRI_International

http://en.wikipedia.org/wiki/Albert_S._Humphrey

Strengths:

Integrated player with low-cost sourcing capabilities.

Unique brand positioning.

Experienced and efficient management.

Design and merchandising expertise, with a pulse on fashion.

Wide apparel range.

Abundant raw material availability that helps industry to control costs and reduces

the lead-time across the operation.

Low cost skilled labor provides competitive advantage to industry.

Presence across the value chain.

Growing domestic market.

Strong backward integration.

Third largest cotton producer as well the largest area under cultivation.

Increasing presence across entire value chain.

Cheap and skilled manpower.

Sharp reduction in borrowing costs.

Recent government efforts to promote the industry.

Truly vertically integrated from raw material to finished products.

Steadily diversified its raw material base to include man-made fibers such as

Polyester, viscose, acrylic, polypropylene etc. as well as other natural fibers.

Flexible in terms of production quantity and lead time.

Having powerful and good brand image in terms of cement and textiles.

Today “Birla Gold” is a very popular brand because of its consistency and services

at par with all other brands.

“Cottons by Century” is also one of the popular brands having a distinctive range

of clothing and even bed and bath accessories.

Century is an independent and self-reliant industry.

Industry has a large and diversified segment that provides wide variety of products.

Growing Economy and Potential Domestic and International Market.

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Weaknesses:

Continuous weakening of the Indian rupee against the US dollar has impacted the

cost of pulp and sulphur thus further increasing the already high production cost.

High cost of labor remains a cause of concern, which has further gone up

with increase in dearness allowances.

The business of the company is largely depends on the economic

conditions of US and European Countries as it export a large portion of its

products to those countries.

It is a highly Fragmented Industry.

Industry is highly dependent on cotton.

Lower productivity in various segments.

Lack of technological development that affect the productivity and other activities

in whole value chain.

Unfavorable labor laws.

Infrastructural Bottlenecks and Efficiency such as, Transaction time at ports and

transportation time.

Lack of trade membership, which restricts to tap other potential market.

Lacking to generate economies of scale.

Higher indirect taxes, power and interest rates.

There is declining in mill segments.

Effect of historical government policies.

Cost competitiveness.

Tech obsolescence despite of measures such as TUFS. Quality is not consistent.

Caters mainly to the low-end class.

Low level of training.

The export-import policy of India changes too frequently due to which it becomes

very difficult for importers to import goods.

Delay in delivering the goods at the right time.

Lack of advance processing capabilities.

Knitted garments manufacturing has remained as an extremely fragmented

industry. Global players would prefer to source their entire requirement from two

or three vendors and the Indian garment units find it difficult to meet the capacity

requirements.

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Knitted garments still remaining as a SSI domain.

Labor force giving low productivity as compared to other competing countries.

Low bargaining power in a customer-ruled market.

India seriously lacks in trade pact memberships, which leads to restricted access

to the other major markets.

Urgent need for labor reforms in India.

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Opportunities:

The growing retail market in India.

The cement industry is expected to witness an increase in demand due to

fund allocation to the Bharat Nirman Scheme which is a time bound plan for

building rural infrastructure.

Expanding into new geographies.

Brand image and Market Size.

The revolution in organized retailing would increase the consumption of apparel

and made-ups.

Growth rate of Domestic Textile Industry is 6-8% per annum.

Large, Potential Domestic and International Market.

Product development and Diversification to cater global needs.

Elimination of Quota Restriction leads to greater Market Development.

Market is gradually shifting towards Branded Readymade Garment.

Increased Disposable Income and Purchasing Power of Indian Customer opens

New Market Development.

Emerging Retail Industry and Malls provide huge opportunities for the Apparel,

Handicraft and other segments of the industry.

Greater Investment and FDI opportunities are available.

Huge demand for value added goods in all major countries.

Relocation from high cost economies.

Large and relatively untapped domestic market

Large Indian Expatriate community. Hence there is large demand for Indian

Garments.

Rate of import duties is minimal.

Bilateral Agreements on Avoidance of Double Taxation and Prevention of Fiscal

Evasion with respect to taxes on income and capital have further opened the

Opportunity for higher export for the garment sector.

Extensive commercial interactions have greatly helped

Increased use of CAD to develop designing capabilities and for developing greater

options.

Company need to concentrate on new product developments.

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India's global share is just 3% while China controls about 15%. In post-2005,

China is expected to capture 43% of global textile trade.

Domestic market extremely sensitive to fashion fads and this has resulted in the

development of a responsive garment industry.

Low per-capita domestic consumption of textile indicating significant potential

growth.

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Threats:

Exports have declined due to lack of demand and financial crisis in USA, Europe

and Japan.

Lower price of imported yarn and availability of polyester yarn at a cheaper price

continue to pose a high risk.

The demand for rayon tyre yarn continues to remain depressed in view of

the sharp decrease in

Consumption by the automobile industry, which is witnessing a recessionary trend.

Inventory management.

Since the company is in fashion business, there is risk of obsolescence if

the fashion trends change.

Competition from other developing countries, especially China.

Continuous Quality Improvement is need of the hour as there are different demand

patterns all over the world.

Elimination of Quota system will lead to fluctuations in Export Demand.

Threat for Traditional Market for Power loom and Handloom Products and forcing

them for product diversification.

Geographical Disadvantages.

International labor and Environmental Laws.

To balance the demand and supply.

To make balance between price and quality.

Competition in post-2005 is not just in exports, but is also likely within the country

due to cheaper imports of goods of higher quality at lower costs.

Standards such as SA-8000 or WARP have resulted in increased pressure on

companies for improvement of their working practices.

Alternative competitive advantages would continue to be a barrier.

Need to improve the working conditions of those who are involved in this

profession.

Tackle Chinese aggression over the International market.

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NET SALES OF THE COMPANY:

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VALUATION:

At the market price of Rs.508.00, the stock trades at 10.89x and 9.71x for FY10E

and FY11E respectively.

EPS of the company is expected to be at Rs.46.63 for FY10E earnings and

Rs.52.31 for FY11E earnings.

On the basis of price to book value, the stock trades at2.47x and 1.97x for FY10E

and FY11E respectively.

The top line as well as bottom line of the company is expected to grow at a CAGR

of 12% and 20% respectively over FY08 to FY11E.

Company plans to start commercial real estate development at its Worli mill

land, which will offer additional growth opportunities as rentals harden.

The Company has taken possession of 159 acres of land for setting up the

grinding unit at Sagardighi in Dist. Murshidabad, West Bengal.

The grinding unit with a capacity of 1.50 million tonnes capacity per

annum is expected to be operational within a period of about two years from

the date of placement of orders for the plant and machinery which are

expected to be finalized within next three months.

The company plans to set up 100 tons a day prime grade tissue paper plant at a

total capital outlay of Rs 1.75 billion.

The expansion of their Paper unit for manufacturing Paper from waste paper with a

capacity of 211 tonnes per day is now running smoothly and is presently producing

over 80,000 tonnes of Recycle based Paper.

The expansion of cement manufacturing capacity by installing a new clinker line

of capacity of 2.50 million tonnes and an equivalent cement grinding facility

adjacent to the existing plant of Manikgarh Cement at Gadchandur, Maharashtra

along with a captive thermal power plant of 40 MW.

The Company’s ready to wear products under the brand name “Cottons by

Century” are now well known among leading national brands. With the new super

fine fabrics on offer from “Birla Century”, the Apparel Division is poised to create

its own niche in the high-end customers.

The land development at Worli, Mumbai, where Century Mill was situated, is

under process for various commercial uses and permissions from Municipal

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Corporation, Government of Maharashtra and other related agencies are being

pursued so as to commence physical construction work in the near future.

We recommend a “BUY” on the stock with a target price of Rs.570.00 for

medium to long term.

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BALANCE SHEET AS AT 31st MARCH, 2013

PARTICULARS31.03.2013

Rs in Crore31.03.2012

Rs in CroreI EQUITY AND LIABILITIES

Shareholders’ Funds(a) Share Capital 93.04 93.04(b) Reserves and Surplus 1711.91 1805.88

1804.95 1898.92Non-Current Liabilities

(a) Long Term Borrowings 3148.15 1977.10(b) Deferred Tax Liabilities (Net) 242.92 262.74(c) Other Long Term Liabilities 38.80 20.08(d) Long Term Provisions 363.61 319.59

3793.48 2579.51Current Liabilities

(a) Short Term Borrowings 1212.50 1444.80(b) Trade Payables 359.87 307.55(c) Other Current Liabilities 987.22 968.83(d) Short Term Provisions 102.40 92.50

2661.99 2813.68TOTAL 8260.42 7292.11

II ASSETSNon-Current Assets

(a) Fixed Assets(1) Tangible Assets 4229.28 4103.99(2) Intangible Assets 3.11 3.48(3) Capital Work-in-Progress 1710.76 1111.92(4) Intangible Assets Under Development 0.48 1.73

5943.63 5221.12(b) Non-Current Investments 73.78 69.28(c) Long Term Loans and Advances 290.45 288.03(d) Other Non-Current Assets 19.64 16.69

383.87 374.00Current Assets

(a) Current Investments - 2.07(b) Inventories 1203.79 1095.24(c) Trade Receivables 408.01 333.45(d) Cash and Bank Balances 53.49 50.09(e) Short Term Loans and Advances 237.76 198.86(f) Other Current Assets 29.87 17.28

1932.92 1696.99TOTAL 8260.42 7292.11

RECOMMENDATIONS:

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Setting up Textile Industries oriented SEZs.

Starting up new courses like Textile Manufacturing and Textile Technology at ITIs

and Engineering Institutes.

Liberalized labor laws, tax and other benefits of a Special Economic Zone need to

be implemented.

Access to high quality and cost effective manpower.

Excellent connectivity by road, rail and airports.

Single window clearance.

CONCLUSION:

The Indian textile industry has a significant presence in the Indian economy as well as

in the international textile economy. Its contribution to the Indian economy is

manifested in terms of its contribution to the industrial production, employment

generation and foreign exchange earnings. The industry also contributes significantly

to the world production of textile fibers and yarns including jute. In the world textile

scenario, it is the largest producer of jute, second largest producer of silk, third largest

producer of cotton and cellulosic fiber\yarn and fifth largest producer of synthetic

fiber\yarn. Textile Industry is providing one of the most basic needs of people and the

holds importance; maintaining sustained growth for improving quality of life. The

Government of India has also included new schemes in the Annual Plan for 2007-08 to

provide a boost to the textile sector. These include schemes for Foreign Investment

Promotion to attract foreign direct investment in textiles, clothing and machinery etc.

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REFERENCES:

www.tradeget.com www.ibef.org

www.ceturytextind.com

www.bharattextile.com

www.texprocil.com

www.economywatch.com

www.marketresearch.com

pd.cpim.org

meaindia.nic.in

ezinearticles.com

www.indialine.com

www.articlesbase.com

www.studymode.com

www.fibre2fashion.com

www.craftsinindia.com

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http://www.craftsinindia.com/

http://www.fibre2fashion.com/

http://www.studymode.com/

http://www.articlesbase.com/

http://www.indialine.com/

http://www.marketresearch.com/

http://www.economywatch.com/

http://www.texprocil.com/

http://www.bharattextile.com/

http://www.ceturytextind.com/

http://www.ibef.org/

http://www.tradeget.com/

final project on century textiles industry ltd

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