Weekly Market Outlook for 27 May to 31 May
Shiva Mills and Indian Textile Industry
Shiva Mills Limited is engaged in the business of manufacturing and marketing of Cotton Yarn. The company to take over the assets and liabilities of Spinning Unit I and certain windmills under the Scheme of Arrangement (demerger). The market cap of Shiva Mills Ltd is Rs.93 crore.
The spinning unit was started in 1989 in Dindigul, Tamil Nadu. The unit has a capacity of 39,072 spindles with a production capacity of 20 MT of cotton yarn per day. The unit specializes in the production of 100% cotton yarn for knitting mostly in counts of 20/1 to 40/1.
The unit has been modernized at periodical intervals with the latest machines by availing term loans under the Technology Upgradation Fund (TUF) scheme. However, Shiva Mills is currently debt-free.
Shiva mills have established strong brand loyalty, especially in major knitting centers like Tirupur and upcountry centers with migrant labor. Shiva Mills exports around 20 – 30% of cotton produced to Far East countries.
The company has also installed sophisticated testing equipment to test the quality parameters of cotton as well as yarn so as to maintain the highest quality standards. The Unit has implemented ISO 9001 2000 Standards certified by Det Norske Veritas of the Netherlands for quality standards.
The Indian Textile industry plays an essential role in the country’s economy and it is the largest and most labor-intensive manufacturing industry.
India’s textiles industry contributes 7% of the industrial output in value terms. It contributes 4% to the GDP of India and directly employs over 45 million workers mostly the rural poor and women. The textile industry is the second-largest producer of employment next to agriculture. The sector contributes 15% to India’s export earnings.
The future of the Indian textile industry looks promising, buoyed by strong domestic consumption as well as export demand. Ultimately, a spurt in demand is expected for cotton yarn both in the domestic and export markets.
According to the IBEF report, the size of India’s textile market was expected to touch $ 223 billion by 2021, growing at a CAGR of 10.23% over 2016. The Indian apparel market was expected to reach US$ 85 billion by 2021.
The new textile policy aims to achieve $ 300 billion worth of textile export by 2024-25 and create an additional 35 million jobs. By 2022, the Indian textile sector will require an additional 17 million workforce. Exports of textiles from India in FY20 stood at Rs.23 crore.
India’s home textile industry is expected to expand at a CAGR of 8.3% during 2014-21 and reach $ 8.2 billion in 2021 from $ 4.7 billion in 2014. India accounts for 7% of the global home textiles trade. Superior quality makes companies in India a leader in export – almost two-thirds of India’s export of textiles is to the USA and UK.
The upcoming textile policy is likely to focus on setting up manufacturing hubs for textile machinery with the help of foreign direct investments. Increased penetration of organized retail, favorable demographics, and rising income levels will drive the demand for textiles.
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