Launching Jeans in U.K

Presented To:

Mr. Rana Shahzad

Presented By: Nouman Saleem (011114)

ACKNOWLEDGEMENT

All praises for Almighty Allah who is “THE CREATOR” of whole of the

universe and admires to our Holy Prophet Muhammad (Peace be Upon Him)

who taught us every thing of this life and the life thereafter.

Now it is our responsibility to convey the “WORDING OF SUCCESS” to

whole of the Ummah. As it was indicated in the last Address of our Holy

Prophet (Peace be Upon Him). And the graves of “FELLOW BEINGS” are

the proof of the completion of this responsibility.

I am thankful to my respected teacher Mr.Shahzad who taught us

“International Marketing ” with heart and also gave a guideline to this

report.

Executive Summary

This report is about launching the Denim Jeans in U.K.It includes the

following aspects.

Reasons for choosing this product

Trends in international market

Position of Pakistan in international market

Internal process

Machinery profile for Jeans

Legal environment of U.K

Political environment of U.K

Trade environment of U.K

Geographic environment of U.K

Major imports profile of U.K

Sheikh Garments

For manufacturing the Jeans and exporting it to other countries, I have

established a new garments unit named as Sheikh Garments.

The Product

The product my unit is manufacturing is Denim Jeans & we are exporting it

to U.K.

Why I Selected Jeans

I have selected the Denim Jeans for exporting it to U.K for the following

reasons.

The overall imports of U.K are very good.

Cheap labor is available for producing Jeans.

Resources are available for producing Jeans.

This industry is growing very fast.

Pakistan has good relations with U.K.

Where did the name Denim Jeans come from?

The phrase denim jeans is thought to derive from several sources. No one is

totally certain where the words come from. A majority of source books

suggest that denim derives from the English translation of the South of

France French phrase 'serge de Nîmes'

It may well be that the fabric which was made in France also had a version

made locally in England and was called by the same name of denim in the

same way that Cheddar cheese is called cheddar all over the world. The

Serge de Nîmes was originally a wool silk mix, twill weave. Certainly by the

19th century in England denim had a white warp and a navy woof (weft).

Denim was considered a hard wearing sturdy fabric, ideal for heavy

laboring.

Category 603

Denim is known as Category 603 in Pakistan and other countries.

Trend

The trend for jeans is increasing in the whole of the world. It is not only

popular in Pakistan but also in the whole world.

The Most Important Issue

Not only for the Jeans, also for all products, it’s essential to know your

product. I am a manufacturer and if I have no idea about the processing of

my product, then I cant run my business well.

Our Unit

We are the manufacturers and we give product to the wholeseller .He sends

the product to U.K. The main strength of this unit is derived from the

availability of a large variety of fabrics in normal twills.

Denims

Greenwood of USA and Legler of Italy’s denim manufacturing facilities

around Lahore and because of a large number of other Denim producing

units, normal denims and stretch denims of almost all weights and qualities

are available.

Administration

Patterns / Sampling

Cutting

Stitching

Laundry

Finishing

Quality Control

Stores

Boiler

Electricity / Generator

General Maintenance

Security

There are 250 people working for us divided into 8 departments excluding

security. These departments are administration, sampling, cutting, stitching,

washing, finishing, quality control and stores. Our employee turnover is low

and hence the skill level of our workers has grown with us. 

We are a stitching (BROTHER brand machines) and washing unit (NGAI

SHING, Hong Kong) based on 4000 pieces per day production of 5 pocket

basic jeans. This essentially means that as the style gets complex the

production per day drops accordingly.

We are constantly adding new and more modern machines to our unit to

enhance our production. Lately we have added a computer controlled

automatic Brother brand "Pocket Welt" machine for any trouser type back

pocket welts and flap attaching as we anticipate that the market is going to

demand these pocket types in the coming seasons.

Contact with Buyers

We contact the potential buyers through following sources.

We use secondary sources mostly

Trade fairs

Agents

E-Marketing

Personal contacts

Other sources

Competition

Internationally, we are facing competition from the following countries.

India

China

Bangladesh

Marketing Mix

Our product is a 5-pocket men’s jean. It can be made for any waist

and any length. The buyers from England send the sample & we

provide it accordingly.

Our pricing ranges mostly from 4.7$ to 6.7.it is based on the length

and waist of Jeans. We deal in $ and not in the pounds.

We don’t need too much promotion. It’s done by fairs, e.commerce,

agents etc.

We export the product to U.K.The distribution channel is as follows.

MANUFACTURER (COMPANY)

WHOLESELLER

JEANS SEND TO U.K

Internal Process

It is as follows.

Sample

Cutting

Stitching

Washing

Pressing and labeling

Finishing

Dispatched to store

Packing and containers

Explanation

The sample is first send by the buyer. It’s called a gold seal sample.

In cutting dept, one piece is placed on the other and in this way a

bundle of 50 Jeans is made. Then the cutter cuts it.

In the stitching dept, front end or the upper part is made. Then

backend is made and they are assembled together in the assembly end.

Then the belt is made.

Washing can be done by simple garment wash or through the stone

wash and chemicals. It is done according to the buyer’s request.

In Pressing and Labeling dept, the Jeans are pressed and then labeled

for identification.

In finishing dept, the quality of jeans is checked and mistakes are

rectified.

Then the Jeans dispatched to the store.

Then packing is done. It is done according to the buyer’s request.

Then they are sent to the containers.

Machinery Profile

We are currently using the following machines.

Stitching Unit:

Lock Stitch 84 units

Double needle 16

Safety 5 threads 12

OverLock 3 threads 11

Loppers 02

Waist Belt 03

Belt attaching 04

Bartacks 12

Shank Buttoning 05

Plastic Buttoning 02

Feed of the Arms 10

Eyelets 04

Pocket welting 01

Pockets hemming 02

Elastication 02

Flap attaching 02

Total 170

Laundry:

Washing Machines

Double Chamber 800 lbs 3

Single Chamber 400 lbs 3

Dryers 1

Extractors 4

Total 10

Boilers:

2 Tone Capacity 1

Small Units 2

Total 3

Pressing:

Steam Vacuumed pressing tables 4

Normal pressing tables 7

Steam press 12

Total 23

Quality Control

Raw Material

All of the raw materials pass through a rigorous quality inspection and

materials not found within the acceptable criteria of our set quality standards

are rejected.

Production

A well-trained staff is deployed to ensure that quality produced is within the

set parameters of our quality standard.

Workers Training

Each of the worker is trained, tested and absolutely familiarized with the

jobs he has to perform. He/She is not deployed unless Quality Control

Department is satisfied of his/her ability to meet our quality standard.

Cost Schedule for One Piece

Fabric Rs .130Accessories Rs.15Thread Rs.10Stitching Rs.20Overhead costs Rs.15Quota for 1 year Rs.20Total Rs 210 or 3.5$

External Environment of U.K

SUMMARY

The United Kingdom (UK) is the world's fourth largest economy, and is a

trading nation with a generally open market and a "level playing field". The

UK is a member of the European Union (EU), but has not committed to

signing up for the Euro. It attracts U.S. exporters and investors as a place in

which to do business, because of the common language, a similar legal

framework and business practices, and relatively low rates of taxation and

inflation. Once here, it is easy for American firms to use the UK as a

gateway to the rest of the EU. There are very few sectors in which foreign

ownership is limited, and no restriction on the repatriation of capital and

profit. Within the EU, the British Government supports the rights of any

company registered in the UK, irrespective of the nationality of its ultimate

parent.

ECONOMY

The United Kingdom is the fourth largest economy in the industrialized

world. With the heavy emphasis on privatization and lowering of taxes in the

last twenty years, the wide economic cycles that characterized the economy

of the 1970's and early 1980's have become more moderate in scope.

The UK is entering its ninth consecutive year of economic expansion,

although growth has slowed in concert with the economies of the other EU

countries. The main economic focus of the Labour government, re-elected in

May 2001, is welfare reform, trade liberalization, productivity improvement,

and possible entry into the single European currency (Euro).

The two largest impacts on the British economy in late 2000 and early 2001

have been the global economic slowdown, including the downturn of the

U.S. economy, and the outbreak of foot and mouth disease. The slowdown

in the U.S. economy has the potential to contribute to a similar slowdown in

the UK economy, as UK exports to the U.S. are approximately 3% of overall

GDP. A U.S. slowdown could also contribute to a widening of the UK

current account deficit, which stood at 16.2 billion pounds sterling in 2000,

but which could widen to close to 20 billion in 2001. Moreover, over

investment in telecommunications infrastructure, including prices paid for

so-called third generation licenses by British firms, could exacerbate a UK

slowdown, as the companies involved struggle to service their debt.

The services sector, including finance, transport, storage, and

communications, accounts for almost 75% of the overall economy and

remains robust. In manufacturing, productivity has continued to increase, but

growth is slowing. The manufacturing sector, which accounts for 20% of

GDP, grew by only 0.7% in 2000. One of the major challenges facing the

Labour government is to improve this figure. It has signaled that it intends to

achieve this improvement by focusing on policies that promote greater

competition. Reductions in capital gains taxes, reform of insolvency laws,

and simpler taxes for small businesses are among the policies that will be

put forth by the new government in hopes of spurring productivity.

The UK has an essentially free and market-driven economy, with

independent regulatory bodies providing additional direction in those sectors

where private individuals are the principal users of the product or service.

Regulated industries include the privatized utilities: telecommunications,

electricity, water, and gas supply, and passenger rail transportation. The

Financial Services Authority regulates financial services, while the Office of

Fair Trading regulates consumer credit. Further liberalization of the financial

services, air travel, energy, and telecommunications sectors are all economic

goals.

The relationship with Europe also dominates the economic landscape of the

UK, particularly whether the United Kingdom should adopt the single

European currency (Euro). The Labour government has stated that a decision

on whether to join the Euro will be made on the basis of strict economic self-

interest, and only if approved by the electorate in a public referendum. Most

observers do not expect a referendum on the Euro before 2003 at the earliest.

Private sector production, transportation, warehousing, communications, and

distribution facilities in the UK are adequate, although some of the physical

assets employed show the need for repair and replacement. Much of the

responsibility for public sector infrastructure in the UK has been transferred

to the private sector, and to independent executive agencies that are

accountable.

To supplement government investment, the Public-Private Partnership (PPP)

initiative enables Private Finance Initiative (PFI) schemes that create viable

business entities from public assets at minimal cost to the government have

been developed. PFI schemes transfer ownership of public assets to the

private sector, as well as transferring financial risk and reward – i.e. the

private company has no recourse to the government if the business fails.

Information on the UK's economic performance and prospects is published

in the Bank of England Quarterly, and similar data can be obtained from

many of the major U.S. banks and investment houses

POLITICALENVIRONMENT

The exceptionally close and productive Anglo-American "special

relationship" is anchored by a long-standing and vibrant political and

security purpose, common values, close trade and investment links, and a

shared cultural heritage. At the government level, the strength of the

relationship ensures continued cooperation on a very broad range of foreign

policy.

No important local political issues affect the business climate in the UK as a

whole, although resolution of the peace process in Northern Ireland is

important for business sentiment. The Labour Government has said that, if

certain economic conditions are met, it will hold a referendum on joining the

EU Economic and Monetary Union (EMU) and accepting the Euro as a

common currency. The Conservatives, by contrast, are likely to oppose such

referendum..

An important EU issue is the prospect of harmonizing direct taxation

policies among member states, as in the recent case of savings withholding

tax. Labour and Conservatives alike oppose this, as both political parties are

committed to defending individual EU member states' tax powers.

TRADE REGULATIONS & STANDARDS

The UK has no significant trade or investment barriers, and no restrictions

on the transfer of capital or repatriation of profits. The very few barriers that

exist are the result of UK implementation of EU Directives and regulations,

and do not reflect UK Government intentions.

Customs duty is assessed on the fair market value of imported goods at the

time they are landed in the UK. The commercial invoice value is usually

accepted as the normal price, but if a preferential arrangement has been

established between the overseas supplier and the importer, or an unrealistic

value has been declared, HM Customs reserves the right to assess a fair

market value for duty purposes. The duty is payable at the time the goods are

imported, but established importers can defer payment for up to 30 days. In

addition to customs duties, an excise tax is levied on sales of alcohol,

tobacco, road vehicles, and oil and petroleum products.

A limited range of goods requires import licenses, which are issued by the

UK Department of Trade and Industry's Import Licensing Branch. These

include firearms and explosives, nuclear materials, controlled drugs and

certain items of military equipment.

The UK participates in the Wassenaar Arrangement for the control of dual-

use exports, the Australia Group (AG) for the control of chemical and

biological weapons, and the Nuclear Suppliers' Group (NSG) for nuclear-

related goods, preventing the export of restricted goods and technology to

countries of proliferation concern. The UK also supports United Nations'

sanctions restricting exports to certain other destinations. Although sensitive

to the extraterritorial application of U.S. law in export controls, the UK

authorities cooperate with the U.S. in preventing the re-export of sensitive

goods and technology of U.S.-origin to unauthorized destinations, when the

enforcement action is based on multilateral controls.

The documents required for shipments include the commercial invoice, bill

of lading or air waybill, packing list, insurance documents, and, when

required, special certificates of origin, sanitation, ownership, etc.

A copy of the commercial invoice should accompany the shipment to avoid

delays in customs clearance. No special form of invoice is required, but all

of the details needed to establish the true value of the goods should be given.

At least two additional copies of the invoice should be sent to the consignees

to facilitate customs clearance. Consular documents are not required for

shipments.

Origin, weight and dimension, chemical composition and appropriate hazard

warnings are required for consumer protection purposes on any product

offered for retail sale. If the product cannot be labeled or marked, the data

may be included on any packaging or accompanying printed material or

product literature. Although metric units of weight and dimension are

required, the continued use of labels with both metric and standard U.S.

units is permitted. This continued freedom is supported by importers, and

also by British exporters of products destined for the U.S. market. European

and British clothing and shoe sizes are differently marked, and special

provision may have to be made for retail labeling of apparel.

Prohibited imports include AM citizens band radios, switchblade knives,

devices that project toxic, noxious or harmful substances (e.g., tear gas),

counterfeit coins and currency, and certain types of pornography.

The UK supports the use of ISO, EU and national standards, with the higher

standard superceding the lower as soon as it is issued. Although industry-

specific standards and approvals have no legal standing, they are often

accepted as an assurance of product quality if no relevant national standard

exists. Such acceptance, though, is invalidated when a national, EU or ISO

standard.

ECONOMIC AND TRADE STATISTICS

COUNTRYDATA

-- The UK population is estimated to be just under 60 million people.

-- The population is forecast to reach 63.6 million people in 2021. This 6 per

cent increase over the next 21 years equates to annual population growth of

just0.3percent.

-- The UK is a constitutional monarchy. The Head of State is Queen

Elizabeth II. The head of government is Prime Minister Anthony (Tony)

Blair. The monarch is hereditary; the Prime Minister is the leader of the

majority party in the House of Commons (assuming there is no majority

party, a prime minister would have a majority coalition or at least a coalition

that was not rejected by the majority). The legislative branch consists of two

chambers: the elected House of Commons (659 members) and the unelected

House of Lords (686 members as at June 18, 2001. The number varies as

peers are created). In addition to the UK government in London, there are an

elected Scottish Parliament in Edinburgh, an elected Welsh Assembly in

Cardiff, and an elected Northern Ireland Assembly in Belfast.

The official language is English. Welsh is spoken by a substantial minority

in Wales, and Gaelic by a minority in Scotland. In addition, there are many

large communities in the UK whose first language is not English. Numerous

languages are spoken in London, including thirty-three for which there are

resident populations of 10,000 or more.

--GDP(2000)=$1,355billion

--EstimatedGDP(2001)=2.3%

-- Government spending is estimated to be 39.7 per cent of UK GDP

-- Inflation: The underlying rate of inflation in the UK is forecast to be 2 per

cent in 2001. This compares to the UK government's target of 2.5 percent.

Samples of Our Product

Pictures of Processing

Sources of information

Internet

Journal

Books

Visit to a manufacturing unit (Delta Garments)