Profile No.
: 14 NIC Code: 14101
DENIM GARMENTS (JEANS, JACKETS, SHORTS)
1. INTRODUCTION:
Clothing is the basic necessity for humans. On one hand people want clothes of latest
fashion and design and on the other hand they don’t wish to take too much trouble
maintaining such clothes. Introduction of Denim in late 19 th century solved this
problem. Not only is denim a rough and tough fabric, it does not need much
maintenance. The current fashion in fact attaches higher value to denim garments
having worn out, faded and old look!
2. PRODUCT & ITS APPLICATION:
Denim fabric is generally made out of open end cotton yarn of coarse count. The
weave in classic denim of 14.5 oz. is two up one down giving a traditional look to the
fabric. With passage of time, light weight varieties of denim have been developed to
meet customer requirements of comfort, functionality, weather conditions, fashion
and cost etc. Present day denim fabric sometimes has blended fiber and Lycra or
Spandex fiber as well. Jeans, Tops or Jackets and Shorts are the key products made
out of denim fabric although there are several other articles made out of denim
fabric. Denim garments are worn by men, women and children alike.
3. DESIRED QUALIFICATIONS FOR PROMOTER:
Graduate in any discipline.
4. INDUSTRY OUTLOOK & TRENDS:
Denim is not only a fashion fabric, it is also a trendy fabric that reflects youthfulness
and modernity. Increasing acceptance of denim garments by people of all ages leads
to phenomenal rise in demand. The trend is expected to continue at least for few
more decades.
5. MARKET POTENTIAL AND MARKETING ISSUES, IF ANY:
As denim fabric is heavier and stronger compared to normal suiting or shirting, the
users feel comfortable going about their routine work without bothering about clothes
getting dirty or creased or torn. Usage of denim started with professions involving
tough manual work like cowboys, industrial workers and artisans. The comfort and
rough nature of the fabric soon attracted attention of all and sundry. Today, denim is
worn by almost every individual in the world in some form or the other. Even kids
garments are made out of light weight denim! Students and office goers try to keep
at least 4-5 denim garments in their wardrobe. The demand for denim garment has
been growing in sync with the population. Denim garments with attractive
embroidery and embellishments have become sophisticated fashion statements
instead of original rough and tough feel. As denim has become common man’s
garment, the quality and price varies extensively between a very low quality garment
costing just ₹ 250 to niche product in luxury segment costing as much as ₹ 5000.
The demand for denim is worldwide. Since the manufacturing process is labour
intensive, countries in Asia & Africa are more competitive when it comes to supplying
to Europe & American markets.
6. RAW MATERIAL REQUIREMENTS:
Main raw material required is denim fabric. Classic denim weighs 14.5 oz. per square
meter. There are light weight varieties of 13.5 oz., 12.5 oz., 11 oz., 9 oz. and 6 oz.
etc. also. Weight and construction of fabric (warp and weft ratio, type weave and
fiber used) depends on customer requirements. There are several denim
manufacturers in India and the fabric is easily available through network of dealers
and mill agents. Some mills deal directly with large garment manufacturers. Denim
garments have several accessories or embellishments like special coarse thread,
labels (size label, wash care label, brand label etc.), zippers and buttons (made of
plastic, metal & fabric). Labels can be of woven fabric, non-woven fabric, leather or
polyurethane. Sometimes the customers require special printing or embroidery work
on denim fabrics. Wholesalers of all these materials are found in every large city
although New Delhi, Mumbai, Ludhiana, Coimbatore and few other cities have several
dealers and importers of these consumables.
7. MANUFACTURING PROCESS:
Fabric received from the mill is inspected on the inspection machine and defects
marked with adhesive flags on the edge of the fabric. The fabric is then spread on
long table (usually 4 to 8 meters long) to form layers. Separately, patterns of card
board or metal sheet are prepared for each piece of a garment. These patterns are
laid on layers of fabric in such a way that wastage is minimized and fabric’s desired
warp and weft construction as well as design or pattern is achieved in critical parts of
the garment. Care is also taken to eliminate parts of fabric having major defects.
Several layers of fabric are cut simultaneously through a vertical motorized blade and
pieces of garments obtained. Stitching of garments is done in assembly line mode
wherein each worker stitches only some parts of the garment and unfinished garment
moves forward from table to table in the assembly line. Therefore cut pieces from
cutting table are distributed to the respective workers and then the garment
assembly starts from 1st worker and reaches the last stage where it gets fully
stitched. The stitching on denim garment is mostly done through double needle
machines to give unique look of parallel coarse thread on the garment although some
operations are also done through single needle machines. After stitching, the
garments are washed in tumbler wash machines. Sometimes special chemicals or
pebbles are added in the wash cycle to achieve desired shade, fade or worn effect on
the garment. Denim garments of different colors were in vogue some years ago but
the trend has stopped now and only classic blue and black is used in varying shades.
After washing and drying, the garments are cleaned by removing loose threads and
dirt with blower, steam pressed and packed. Garments are manufactured in sets of
different sizes, colors and design/patterns as per customer requirements and stacked
accordingly in the storage shelves.
8. MANPOWER REQUIREMENT:
The enterprise needs 72 employees at full capacity, as detailed below:
Sr. No. Designation of Employees Monthly
Number of employees required
Salary ₹
Year-1 Year-2 Year-3 Year-4 Year-5
Variable Labour / Workers:
1 Machine Operators 12,000 24 28 32 36 40
2 Helpers 8,000 12 14 16 18 20
sub-total 36 42 48 54 60
Fixed Staff Costs:
1 Factory Manager 35,000 1 1 1 1 1
2 Packing Staff 8,000 4 4 4 4 4
3 Purchase Executive 20,000 1 1 1 1 1
4 Marketing Executive 20,000 1 1 1 1 1
5 Accounts Executive 20,000 1 1 1 1 1
6 Commercial Assistant 12,000 1 1 1 1 1
7 Security Guard & Peons 10,000 2 2 2 2 2
8 Driver 12,000 1 1 1 1 1
sub-total 12 12 12 12 12
Total 48 54 60 66 72
9. IMPLEMENTATION SCHEDULE:
Selection and procurement of machines takes 2 to 3 months. Recruitment of
manpower also takes about 2 months. Reasonable planning can help complete the
project in about 4 months.
Time Required
Sr. No. Activity
(in months)
1 Acquisition of premises 2
2 Construction (if applicable) -
3 Procurement & installation of Plant & Machinery 3
4 Arrangement of Finance 2
5 Recruitment of required manpower 2
Total time required (some activities shall run concurrently) 4
10. COST OF PROJECT:
The project is expected to cost ₹ 90.16 Lacs as detailed below:
Sr. No. Particulars ₹ in Lacs
1 Land -
2 Building -
3 Plant & Machinery 47.75
4 Furniture, Electrical Installations 6.30
Other Assets including Preliminary /
5 10.00
Pre-operative expenses
6 Margin for Working Capital 26.11
Total 90.16
11. MEANS OF FINANCE:
Bank term loans are assumed @ 60% of fixed assets. The proposed funding pattern
is as under:
Sr. No. Particulars ₹ in Lacs
1 Promoter's contribution 51.73
2 Bank Finance 38.43
Total 90.16
12. WORKING CAPITAL CALCULATION:
The project requires working capital of ₹ 55.55 Lacs as detailed below:
Sr. No. Particulars Gross Amt. Margin % Margin Amt. Bank Finance
1 Inventories 15.04 40% 6.01 9.02
2 Receivables 44.55 40% 17.82 26.73
3 Overheads 6.49 100% 6.49 -
4 Creditors -10.52 40% -4.21 -6.31
Total 55.55 26.11 29.44
13. LIST OF MACHINERY REQUIRED AND THEIR MANUFACTURERS
Rate Value
Sr. No. Particulars UOM Qty.
(₹) (₹ in Lacs)
Plan & Machinery / equipments
a) Main Machinery
15.0
i. Single needle machines + Accessories (Heavy Duty) Nos 75,000 11.25
0
15.0
ii. Double Needle machine + Accessories (Heavy duty) Nos 1,00,000 15.00
0
iii. Zig Zag stitching machine Nos 2.00 75,000 1.50
iv. Fabric Cutting table + Machine LS 1.00 1,00,000 1.00
v. Over lock machines No 2.00 75,000 1.50
Rate Value
Sr. No. Particulars UOM Qty.
(₹) (₹ in Lacs)
vii. Button hole & stitching machines Set 1.00 2,50,000 2.50
viii. Washing machine - commercial Nos 4.00 1,50,000 6.00
b) Ancillary machinery
i. Lab Equipments LS 1.00 3,00,000 3.00
ii. Steam Iron, Blower etc. LS 2.00 1,00,000 2.00
iii. Trolleys & material handling LS 1.00 4,00,000 4.00
sub-total Plant & Machinery 47.75
Furniture / Electrical installations
a) Computer and printer Set 2.00 50,000 1.00
b) Office Tables, Chairs LS 1.00 1,00,000 1.00
c) Inspection, packing & storing tables Nos 6.00 25,000 1.50
35.0
d) Storage Racks Nos. 8,000 2.80
0
sub total 6.30
Other Assets
a) Rent Deposits 2.00 1,25,000 2.50
b) Delivery Van 1.00 7,50,000 7.50
sub-total Other Assets 10.00
Total 64.05
Single Needle and Double Needle stitching machines are available from following
suppliers. They have offices across several cities in India. There may also be other
local machinery manufacturers offering alternate machines of various makes and
models.
IIGM Private Limited
Springdale No. 51,
Residency Road, 3rd cross,
Bangalore 560025
www.iigm.in
Juki India Private Ltd
1090/I, Ground Floor,
18th Cross, Sector III,
HSR Layout,
Bangalore 560102
www.jukiindia.com
Brother International (India) Pvt Ltd
Unit No.408, 215, Atrium B-Wing,
4th floor, Opp. Sangam Cinema,
Andheri Kurla Road, Andheri (East),
Mumbai 400093
www.brother.in
14. PROFITABILITY CALCULATIONS:
Sr. No. Particulars UOM Year-1 Year-2 Year-3 Year-4 Year-5
1 Capacity Utilization % 60% 70% 80% 90% 100%
₹. In
2 Sales 356.40 415.80 475.20 534.60 594.00
Lacs
Raw Materials & Other direct ₹. In
3 303.69 354.30 404.92 455.53 506.15
inputs Lacs
₹. In
4 Gross Margin 52.71 61.50 70.28 79.07 87.85
Lacs
₹. In
5 Overheads except interest 38.93 38.93 38.93 38.93 38.93
Lacs
₹. In
6 Interest 8.05 8.05 8.05 8.05 8.05
Lacs
₹. In
7 Depreciation 4.62 4.62 4.62 4.62 4.62
Lacs
₹. In
8 Net Profit before tax 1.11 9.90 18.68 27.47 36.25
Lacs
The above calculations are based on assumed unit sales price varying from ₹ 500 to
₹ 600 for various products. The key raw material is assumed at a cost range of ₹ 200
to ₹ 250 per meter. Electricity tariff is assumed at ₹ 8 per KwH.
15. BREAKEVEN ANALYSIS:
The project shall reach cash break-even at 53.48% of projected capacity as detailed
below:
Sr. No. Particulars UOM Value
1 Sales at full capacity ₹. In Lacs 594.00
2 Variable costs ₹. In Lacs 506.15
3 Fixed costs incl. interest ₹. In Lacs 46.99
4 BEP = FC/(SR-VC) x 100 = % of capacity 53.48%
16. STATUTORY/ GOVERNMENT APPROVALS:
The project does not require any specific government approval. Registration with
MSME is optional. An Entrepreneur may be required to obtain Shops & Establishment
Registration and Professional Tax registration by local Municipal authorities.
Registration under Factories Act, Provident Fund Act and ESI provisions would be
required depending upon the number of employees, the location, the level of
mechanization and the age of the enterprise. Entrepreneur may contact State
Pollution Control Board where ever it is applicable.
17. BACKWARD OR FORWARD INTEGRATION:
As the machines used in the project are versatile, the Entrepreneur can also consider
manufacture of home furnishing articles like bed sheets, pillow covers, wall hangings
etc. depending on opportunities in the market he / she is familiar with.
18. TRAINING CENTERS/COURSES
Udyamimitra portal ( link : www.udyamimitra.in ) can also be accessed for
handholding services viz. application filling / project report preparation, EDP, financial
Training, Skill Development, mentoring etc.
Entrepreneurship program helps to run business successfully is also available from
Institutes like Entrepreneurship Development Institute of India (EDII) and its affiliates
all over India.
Disclaimer:
Only few machine manufacturers are mentioned in the profile, although many
machine manufacturers are available in the market. The addresses given for
machinery manufacturers have been taken from reliable sources, to the best of
knowledge and contacts. However, no responsibility is admitted, in case any
inadvertent error or incorrectness is noticed therein. Further the same have been
given by way of information only and do not carry any recommendation.
