Apparel Industry India and How to Increase It

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Apparel Industry India and How to Increase It Powered By Docstoc
					Investment Opportunities in Emerging Indian Market

               (Technical Textiles)


                    Presentation




                    March 19, 2010
               Contents             1




1   Where does India stand today?


2   Going Ahead


3   Conclude


4   About Technopak
                                2




Where does India stand today?
     Indian Economy is growing at a robust rate…                                                          3




                                                                                           GDP Growth
 9.30% 9.7%             9.1%                                                              9.0%   9.0%
                                                                     8.1%   8.5%   8.5%
                                                  7.9%
                                  6.1%                    7.2%
                     8.5%             6.1%
 7.10%                                                                             7.5%   7.5%    7.5%
                                                                     7.0%   7.0%
           6.3%                                                                     Private Consumption
                                                           5.2%
                                                  5.6%
                              2.9%
                                        1.6%


FY   2006 2007 2008 2009 2010 2010 2010 2011P 2012P 2013P 2014P 2015P
                          Q1 Q2

     Source: Ministry of Finance, Technopak Analysis and Estimates
     Real Growth Rates
      ..and has had a sustainable growth so far                        4




                         IIP (Index of Industrial Production) Growth
12%

10%

8%

6%

4%

2%

0%




 Source: Economic Survey of India
                      0
                          200
                                 400
                                                                       600
                                                                             800
                                                                                          1200
                                                                                                 1400
                                                                                                        1600
                                                                                                               1800
                                                                                                                      2000




                                                                                   1000
               1975                                                                                                          In „000s
               1976




Source: SIAM
               1977
               1978
               1979
               1980
               1981
               1982
               1983
               1984
               1985
               1986
               1987
               1988
               1989
               1990             Annual Automotive Production (India)
               1991
               1992
               1993
               1994
               1995
               1996
               1997
               1998
               1999
               2000
               2001
               2002
                                                                                                                                        The automotive industry is booming




               2003
               2004
               2005
               2006
               2007
                                                                                                                                         5
..along with the Healthcare industry              6



Indian Healthcare Market




                           Medical Value Travel
Increase in Infrastructure is facilitating growth                              7




                       Government Spending on Road and Transportation
                                     (INR ‘000 Crores)
  25

                                                                         20
  20
                                                               16
                                                    15
  15                                       13
                                    12
  10
                 7

    5

    0
              2004                 2005   2006     2007       2008      2009



Source: Economic Survey of India
…and the Agriculture industry   8
 Technical Textile Industry is growing even faster                                                          9



                           2001                                                 2009

  Auto                Vehicles                                  220%          Vehicles Produced:
Industry              Produced: 5mn                             Growth        11mn


Apparel               Industry Size                             210%          Industry Size
Industry              ~US$ 30 Billion                           Growth        > US$ 65 Billion


Healthcare            Industry Size                             240%          Industry Size
 Industry             ~US$ 20 Billion                           Growth        > US$ 50 Billion


Technical             Industry Size                             270%          Industry Size
  Textile             ~US$ 3 Billion                            Growth        > US$ 8 Billion
 Industry
   Source: Industry Reports, Technopak Analysis and Estimates            Source: IBEF, Technopak Analysis
 ..and is expected to become a US$ 15 Bn industry                                                              10




                                                Indutech
      Hometec            2007-08                   6%                    Hometec   2012-13
         h                                                                                   Indutech
                                          Mobiltech                         h                   6%
        12%                                                                13%
                                            8%               Clothtech                             Mobiltech
Clothtech                                                      15%                                    8%
  17%
                                                  Sportech                                            Sportech
                                                     7%                                                 7%
                                                Buildtech                                             Buildtech
                                                   5%                                                    4%
                                                 Meditech                                             Meditech
                                                    4%                                                   3%
                                                Protech                                             Protech
                                                   3%                                                 3%
                                               Agrotech       Packtech                           Agrotech
   Packtech                                                                                        1%
                                                 1%             39%
     36%
                               Oekotech        Geotech                               Oekotech    Geotech
                                 0%              1%                                    0%          1%

                  US$ 8.6 Bn                         CAGR: 11%               US$ 14.6 Bn
               INR 38,835 Crore                                            INR 65,722 Crore
    Source: Ministry of Textiles
Increase of Purchasing Power is a Good Indication                                                                                         11



                                                              Consumption per Capita v/s PPP GDP
                                                     4
                Consumption nonwovens (kg/capita)                                                                      N. America
                                                    3.5                                               Taiwan
                                                                                                  W. Europe
                                                     3                                                                Japan

                                                                                                                      Australia
                                                    2.5                                  S. Korea

                                                     2
                                                                                                    Greece
                                                    1.5
                                                                                            Czech Republic
                                                     1
                                                                                    Argentina, Brazil, Colombia, Venezuela,
                                                                                    Chile, Mexico
                                                    0.5
                                                              India
                                                     0
                                                          0       5000   10000   15000    20000      25000    30000    35000      40000
                                                                                 PPP GDP per capita (US$)
 With India‟s increasing GDP, the growth in nonwovens consumption is also
 expected. As a nation‟s PPP GDP and Per Capita Income increases the
 consumption of nonwovens is also expected to increase.
 Source: INDA
               12




Going Ahead…
                                            With Strong Fundamentals Still In Place                                                                                           13



                                                        Rising Incomes                                                             Rapid Urbanization

                                             Per Capita Income US$)                                                        Urban % of total population
                              1,200                                              1,140
                                                                                              50
                                            CAGR – 10%                                                                                                                   42
Figures in US $




                                                                        961
                                                                                              40                                                                    35
                                                          797                                                                                                 31
                               800                                                                                                                       27
                                             640                                              30                                                 25
                                                                                                                                         23
                                                                                                                             18     20
                                                                                                                      18
                                                                                              20
                               400
                                                                                              10
                                 -                                                                    0
                                            FY 04        FY 07         FY 08E    FY 10E            1950 1960 1970 1980 1990 2000 2010 2020 2030
    Source: RBI                                 Per Capita Income US$)                        Source: Census   % of total population

                                Indian consumer is evolving
                                                        Young Population                                                    Dropping Dependency Ratio
                                 Comparison of Population and Median Age                                              Urban Population Across Age Group
        Figures in millions




                                                                                               Figures in millions
                                 2,000                                                                               200

                                 1,500                                                                               150

                                 1,000                                                                               100

                                      500                                                                             50

                                       -                                                                               0
                                                India          China       USA      Japan                                  1961 1971 1981 1991 2001 2011E 2016E

                                Source: UN              2000     2025     2050              Source: UN                            0-14   15-39        40-59   60+
     ….India will Become 4th Largest Economy                                                         14
                                                                                                    14



     2009 GDP (in US$ Tn)                                  2025 GDP (in US$ Tn)
    India       1.2                                     Brazil       3.6
   Brazil        1.6                                   Russia        3.6
 Russia          1.6                                      UK         3.7
      UK           2.7                                 France        4.0
 France            2.9                                   India       4.5
Germany             3.7                               Germany         4.8
   China               4.3                              China                         16.5
    USA                                   14.2           USA                                 21.7

            0                 10                 20              0   5      10   15    20     25
 Source: World Bank, Technopak Analysis
 Real Growth Rates
                With increase in Medical Awareness…                                                              15




                International Per Capita Healthcare Expenditure                Indian Healthcare Market
                                                                  3163   300
United States                                                                                             272
                                                        2548
                              935                                        250
    Australia
                                              1929
                        411
 South Africa                                                            200
                      258
                       312
      Mexico                                                             150                     136
                      270
                       327
       Brazil                                                            100
                      270
                                                                                        68
                  177               Long way to catch
       China
                 101                   up to other                       50     34
                 62                    developing
        India
                20                     economies                           0
                                                                               2008    2013     2018      2023
            0      500    1000    1500    2000    2500   3000   3500
   Per Capita Private Expenditure   Per Capita Government Expenditure
    All Values in US$ PPP
     Healthcare is a necessity and people are not sacrificing on spending on health.
     Direct consumption by the Consumer spending is driving Technical Textiles as well.
     The consumer is spending more and is expected to spend more on Healthcare.
            ..and other user industries growing                                                                          16



       Indian Organized Retail Market                                Indian Healthcare Market (US$ Bn)
                 (US$ Bn)                                     100
80                                                                                                             80
                                                     67        80                                     70
60                                            56                                            61                  62
                                         45                    60                   53                 54
                                  35                                        46               47
40                         27                                       40               41
                  21                                           40    31      35
      15   17
20
                                                               20                                          8        10
0                                                                       3       4       5        7
     2007 2008 2009 2010 2011 2012 2013 2014                   0
                                                                     2009   2010    2011       2012   2013     2014
     Indian Food Industry Market (US$ Bn)                              Indian Healthcare Market
     350                                      314                      Healthcare Delivery Market Size
     300                                                               Organised Healthcare Delivery Market Size
                                250
     250   210
     200                                           157
     150                                                            Total Food Industry size
                 89               100
     100                                                 63
                      24                32                          Food Processing
      50
                                                                    Industry size
       0                                                            Organized Sector Food
                2007              2009             2015             Processing
                               ..and with a high consumer confidence                                                                                                                                        17



                       India ranks second in global consumer confidence survey

                                                                                           Consumer Confidence
                      140

                      120
Consumer Confidence




                      100                                                                                                                                                                          88

                        80

                        60

                        40

                        20

                          0
                                                 Indonesia




                                                                                                       Canada




                                                                                                                                                                                           Japan
                                         India




                                                                                 HongKon

                                                                                           Australia




                                                                                                                                                                                                   Global
                                                                       Zealand




                                                                                                                Sweden




                                                                                                                                              China




                                                                                                                                                                        Germany

                                                                                                                                                                                  France
                                                             Denmark




                                                                                                                         Pakistan




                                                                                                                                                      Spain
                                                                                                                                    Finland




                                                                                                                                                              US

                                                                                                                                                                   UK
                                Norway




                                                                        New
                                                                                    g




                      Source : AC Nielsen, Global Consumer Confidence Report 2008
…India can lead the World in Technical Textiles                                  18



         Status of Technical Textiles Industry Globally
                   • Driven by Developed economies
Consumption        • High consumption in China with increase in infrastructure

                   • Mainly in Developed Countries
 Production        • China becoming a production base

                   • BRIC countries
Present Focus      • To increase awareness of potential customer



                  • Driven by Developed economies and Developing economies
Consumption         of China and India

                  • Mainly in Developed Countries
 Production       • India and China are production bases

                  • BRIC countries
Present Focus     • To innovate products that will facilitate sustainability
               19




Summing up….
  Indian Companies will be at the forefront                            20




         Krishna Maruti
                               These companies
Supreme nonwovens industries
                               have the potential
                                   to grow




                                         We are waiting for P&G’s,
                                          Kimberly Clark, EBYL’s,
                                         J&J’s of India in Technical
                                                   Textiles
                   21




I Invite players
    …to be a part of Slowdown Proof Industry                                                            22


                                                                                       Freudenberg
                     1400                                                              DuPont
                                                                                       Kimberly-Clark
                     1300
                                                                                       Ahlstrom
                     1200

                      1100                                                             PGI

                     1000

Performance                  900
of leading
                             800
Technical
Textile                      700
companies
                             600

                             500

                             400

                             300
              US$ Millions




                             200

                             100

                               0
                               2002   2003   2004   2005   2006   2007   2008   2009
                  23




About Technopak
                          About Technopak               24




 Specialist management consulting firm with focus on
  • Retail
  • Textile and Apparel
    – Technical Textiles
    – Apparel Operations
    – Textile Operations
  • Consumer goods
  • Healthcare
  • Education
  • Food
                          Service Locations                                                             25



 Technopak has offices in Gurgaon, Bangalore and Thane (Mumbai Region) in India
  and serves various clients across the world as represented below:




                                            UK
                                            France

                                        Italy
         USA                                         Turkey
                                                                 Pakistan
                                                                        Gurgaon    China
                                                       Bahrain
                                                                      INDIA  Bangladesh
                                                          Dubai                       Hong Kong
                                  Senegal                          Thane Bangalore
                                                                                  Cambodia
                                                                                             Japan
                                                 Kenya                        Sri Lanka



                     Brazil                                       Mauritius

                                                                                            Australia
7                                                  Technopak                                                               26




    Professional consultancy firm with vast experience in Indian and Far East market networks        Business Segments



                                                     Technopak
                                 “Specialize in medium to large industries”

        Business strategy         Performance enhancement         Consumer Insights &                Capital advisory
                                                                   Start up assistance


     Specialises in               Specialises in                Specialises in                  Specialises in
      Corporate strategy          Organization                 Shopper insights               M&A
                                    effectiveness
      Organic growth strategy                                   Trend insights                 Due Diligence –
                                   Productivity                                                  commercial & financial
      Growth through                                            Design & innovation
                                    enhancement
       partnership & JVs                                          insights                       Fund Raising
                                   Supply chain
      Value based                                               Design & build start-up        Corporate Finance
                                    improvement
       management                                                 organization
                                   Cost & capital
                                                                 Assist in installing
                                    effectiveness
                                                                  business infrastructure
                                   Sourcing effectiveness
Representative Clients of Technical Textile Group   27
                       Representative Clients                                  28




Ministry of Textile




                                       Cotton Council Intl

Ashima Group          Vardhman




                                        EPZDA Mauritius




                                        Grasim Industries    Gokaldas Images




                                         JCT Limited
                                            29




              Thank You!



            Prashant Agarwal
Senior Vice President, Technopak Advisors
   prashant.agarwal@technopak.com
             +91-9871195008

				
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