role of indian textile and apparel industry in changing global supply demand scenario
TRANSCRIPT
Texcon 2014
Theme Presentation
Role of Indian Textile and Apparel Industry in Changing Global Supply-Demand Scenario
Prashant Agarwal
Joint Managing Director, Wazir Advisors
15th October 2014
2
What it means for Indian
textile sector?
What are the emerging
sector trends?
Where does India stands
today vis-à-vis competition?
How big is the global market?
Defining Role of Indian Textile and Apparel Industry
B C D A
A. Overview of Global Market
4
Current global consumption of apparel is estimated at US$ 1.15 trillion
Canada US$ 30 bn.
USA US$ 230 bn.
Brazil US$ 60 bn.
EU US$ 355 bn.
Russia US$ 45 bn.
India US$ 46 bn.
China US$ 165 bn.
Japan US$ 110 bn.
Australia US$ 25 bn.
Rest of the World US$ 80 bn.
Global Apparel Consumption
2013 Market Numbers
Source: Wazir Advisors
5
From 2008 to 2013, the global textile & apparel trade has grown at a CAGR of 4%
Global Trade of Textiles & Apparel stands at US$ 781 bn.
Values in US$ Bn. Global Textile & Apparel Trade
643
558
642
751 728 781
2008 2009 2010 2011 2012 2013
4% CAGR
Data Source: UN Comtrade
6
Apparel market size will touch US$ 2.1 trillion by 2025
China 26%
EU-27 21%
USA 14%
India 9%
Japan 7%
Russia 5%
Brazil 5%
Canada 2%
Australia 2% RoW
9%
Values in US$ Bn.
Projected Apparel Market Size and Break-up
Market share 2025
Region 2013 2025 CAGR
EU-27 355 440 2%
USA 230 285 2%
China 165 540 10%
Japan 110 150 2%
Brazil 60 100 5%
India 46 200 12%
Russia 45 105 8%
Canada 30 50 4%
Australia 25 45 5%
Rest of the world 80 195 8%
Total 1,146 2,110 5%
Source: Wazir Advisors
B. India’s Positioning
8
India has a share of approx. 5% of global textile and apparel trade.
India’s trade has grown at 9% per annum from 1995 to 2013 while global trade during this period has grown at 5% per annum.
India became second largest exporter of textile & apparel in the world in 2013
8 11 17 27 33 40
304 363
504
642
728 781
1995 2000 2005 2010 2012 2013
India Exports Global Trade
Values in US$ Bn.
CAGR: 9%
Global Trade and Indian Exports of Textile & Apparel
Data Source: UN Comtrade
9
Current Indian domestic consumption of textile and apparel is estimated at US$ 63 bn.
Indian Domestic Textile & Apparel
Market
US$ 63 billion
Apparel
US$ 46 billion
Home Textiles
US$ 4 billion
Technical Textiles
US$ 13 billion
2 3 3 4 4 4 4 7 8 9 10 11 12 13
25 27 31 35
40 45 46 34
38 43
49 55
61 63
2007 2008 2009 2010 2011 2012 2013
Home Textile Technical Textile Apparel Total
Values in US$ Bn. Indian Domestic Textile & Apparel Consumption
Source: Wazir Advisors
11% CAGR
10
India’s Key Advantages
Key Strengths
Raw Material Availability
Inexpensive Trained Manpower
Presence of Complete Textile Value Chain
Government Support for Textile Sector
Market and Manufacturing Ecosystem
C. Emerging Sector Trends
12
Higher growth of synthetic fibre based categories
37% 36% 36% 35% 33% 31% 31% 30% 27%
36%
43% 44% 46% 48% 50% 50% 52%
59%
27% 21% 20%
19% 19%
19% 18% 18% 14%
2000 2007 2008 2009 2010 2011 2012 2020 (P) 2030 (P)
Cotton Polyester Others
Widening gap
Global Fibre Consumption Trend
60% 59% 59% 59% 58% 56% 55%
34% 35% 35% 35% 36% 37% 38%
6% 6% 6% 6% 6% 7% 7%
2000 2007 2008 2009 2010 2011 2012
Cotton Polyester Others
Globally polyester consumption is growing & will continue to grow further
But Indian textile industry is still Cotton focussed
Indian Fibre Consumption Trend
Continued… Data Source: PCI Fibres, Fibre Policy 2011 and Wazir Analysis
13
Higher growth of synthetic fibre based categories
India’s Trade Share in Top Traded MMF based Apparel Categories (2012)
Category End user Type Total Trade (US$ Bn.)
Indian Trade (US$ Bn.)
Share
Jerseys, pullovers, cardigans, waistcoats - Knitted 18.05 0.03 0.20%
Overcoats, capes, cloaks, wind-cheaters, etc. M/B Woven 6.58 0.001 0.02%
Overcoats, capes, cloaks, wind-cheaters, etc. W/G Woven 5.94 0.001 0.02%
Dresses W/G Woven 5.1 0.35 6.90%
Trousers, bib and brace overalls, breeches and shorts M/B Woven 4.85 0.07 1.40%
Blouses, shirts and shirt-blouses W/G Woven 4.3 0.37 8.60%
Dresses W/G Knitted 4.07 0.06 1.50%
Major Trends Focus Sector
Increasing women participation in workforce Western office wear
Increasing awareness towards fitness Active-wear/ sportswear
Awareness of Indian women towards health and hygiene Women hygiene product
India’s emergence as global automobile manufacturing hub Technical textile products
Stricter compliance norms towards worker’s health and safety Protective wear products
Indian exports needs to be focused on following MMF based product categories, which can give an exponential growth to the India’s T&A exports.
India’s presence is insignificant in some of the major MMF based product categories
Consumption of Polyester based products will increase in domestic market as well
Note: M/B – Men’s/Boys’; W/G – Women’s/Girls’ Data Source: UN Comtrade
14
• There is clear trend of consolidation in global textile and apparel trade, where fewer and fewer countries are having share of some significance in total trade.
• In US and EU markets also, the concentration of textile and apparel imports has increased with top 10 supplier countries reaching 78% and 84% respectively in 2013.
Supply base consolidation by buyers
Countries having more than 3% Share in Global Exports
Buyers are now seeking for long term arrangement with fewer suppliers
Italy
3%
China & HK
4%
6%
8%
9%
3%
1995
Germany
3%
23%
3%
6%
4%
29%
Belgium
Turkey
Japan
Korea
France
USA
Others
India
UK
Germany
USA
Italy
2000
France
India
Turkey
Mexico
Korea
China & HK
38%
Belgium 3%
3%
24%
6%
5%
5%
3%
3% 3%
7%
Others
China & HK
Korea
2005
3%
India
Turkey
USA
39%
3% 3%
Others
Belgium
France
Italy
Germany
29%
4%
5%
3%
7%
4%
38%
4%
5%
5% Germany
India
China & HK
2010
4%
Others
Italy
40%
4% USA
Turkey Turkey
Italy
Others
Germany
India
43%
2013
China & HK
5%
4%
4%
5%
39%
Data Source: UN Comtrade
15
17 48
4,359
8,126
1995 2001 2007 2013
US Apparel Imports from Vietnam
3,264 4,458
7,819
12,234
2000 2005 2010 2013
Bangladesh’s Apparel Exports to EU-27
72 84 82 35 32 48 19 21 42 4 4
5 16 21
25 85 145
221 231
308
423
2004-05 2010-11 2013-14
India’s Textile and Apparel Exports to Japan
Apparel
Fabric
Fibre
Made Ups
Others
Yarn
Total
19%
53%
Before FTA
After FTA 11%
5%
11% Before CEPA
After CEPA
Trade agreements to play an important role
Vietnam has emerged as the 2nd largest apparel supplier to US
Bangladesh has become 2nd largest non-European apparel supplier to EU market
India’ trade has also significantly grown after IJCEPA
United States is negotiating for Trans Pacific Partnership (TPP) agreement with 11 other countries throughout the Asia-Pacific region. The inclusion of a significant apparel producer, Vietnam in this free trade agreement will provide it with great advantage in markets of Canada, Australia and Japan.
Another FTA on the horizon - TPP
Data Source: Office of Textile and Apparel (OTEXA), Eurostat and Ministry of Commerce, Govt. of India
Values in US$ Bn.
D. Way Ahead
17
Growing Indian economy will lead to higher domestic demand.
Flexibility and long term partnership with retailers will be new success mantra.
For exports, establishment of larger, integrated set-ups will be required.
Collaboration between SMEs and larger units as their market front end.
Way Ahead
Invest big and take advantage of ‘Make in India’ focus
Thank you for your attention!