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Fastener India- Market Overview 2009
Fastener Asia Pacific
112/04/132
Market Overview - India
• Market Overview – India
» Garment and apparel industry market size is US$27 billion in 2008» Expected continuous growth for the coming years» By 2013, will expect its market size up to US$39.4 billion with an increase of 45.9%» Manufacturers in India
› Garment = 118083 ( 27.8% )› Accessory = 89641 ( 21.14% ) › Fabrics = 67010 ( 15.8%)› Clothing Accessory = 33581 ( 7.91% ) › Yarn = 30537 ( 7.20%) › Equipment = 25347 ( 5.97% )› Fibre = 21756 ( 5.13% ) › Leather & Footwear = 15335 ( 3.61% ) › Home Textiles = 13044 ( 3.07% ) › Dyes & Chemicals = 9682 ( 2.28 % )
» Location of factories› Bangalore, Chennai, Tirupur, Coimbatore, Madurai, Ahmadabad, Nagpur, Indore,Srinagar, Kanpur,
Kolkatta & Guwahati.
•
Fastener Asia Pacific Market Overview - Bangladesh
• Market Overview – Bangladesh» Garment and apparel industry ‘s market size is US$14.11billion in 2008» Annual growth rate is between 20-30%» Manufacturers in Bangladesh
› Garment › Jute and jute goods › Fibre › Leather & Footwear › Clothing Accessory › Home Textiles › Yarn › Dyes & Chemicals
» At present there are about 5000 garment industries in the country and 75 percent of them are in Dhaka» Location of factories
› Dhaka & ChittagongLocation (%of Industries)
IndustryDhaka
Dhaka Export
Processing Zone
Chittagong
Chittagong
Export Processing Zone others
Garments62.30% 4.70% 15.90% 9.80% 7.30%
Leather/Footwear87.50% 4.20% 4.20% 4.20%
Textiles29.40% 1.50% 9.60% 3.70% 55.90%
Fastener Asia Pacific
112/04/134
Market Update - India
• Market Update
» Our market share is being threatened since 2006 for the keep competition.
» Nomination program is no long popular for fasteners products
» Decision for fasteners product selection is down to the factory level
» Buyers are extremely price sensitive for the fasteners commodity items, there is almost no brand preference, price comes always the first
» AD’s share is getting very limited in the current emerging markets, share less than 5% market share on commodity items
Fastener Asia Pacific Fastener Distribution Channel in India
112/04/135
Fastener Manufacturer
Distributor / Stockiest
Sub Dealers / Reseller
Dealer / Channel Partner
End Customer
China / TSP / Saga
AD
AD
Arrow
Arrow
Arrow
Arrow
Arrow
China / TSP / Saga
China / TSP / Saga
Arrow
Arrow
AD
Fastener Asia Pacific
112/04/136
Directions & Strategies
• Distribution channel» Multi-reseller approach as for the huge market scale in India» Develop new resellers to expand our customer base and eliminate the risk on over-rely on
particular resellers who may or may not loyal to AD» Try to reach as much end users possible via different reseller network» Work closely with IBMD Sales team for market exploration on RBOs and Vendors levels
• Focus on garment and apparel industry» Maintain business on the product categories which AD still have values for the intensive
application on stone washing which requires higher quality and less price sensitive› PS, PSM, MCF, NPD(Tends) › Washing application:
» PS / PSM – 35%» TEND – 50%» Micro Pin – 15%
› Only big factories are using PS & PSM for washing› Washing process are mainly done through small washers or job workers in manual methods› Micro Pins were mainly used for washing 2 years ago but now have shifted to cheaper options like 7TEND
and 5TEND because of prices
» Develop alternative/strategic items to recapture the market share – SPC1763 & 7Tend
• Market Diversification to different industries» Promotion VNS solution for packaging in non-garment industries» Establish AD professional image on providing one-stop solution for packaging
Fastener Asia Pacific
112/04/137
New projects under progress for Packaging - VNS
Target Market Segment No. of Mfrs. Action Taken Target for 2010
Toy Industry 800 Approached toy association to get their data base and leads and promoted VNS to 30 factories.
15 units and ES
Hand Tool/Garden Tool 2500 Given demo to 20 manufacturers. 10 units and ES
Kitchen Cutlery 300 Trying to get more information 3 units and ES
Socks Industry 200 Trying to get more information 5 units and ES
Home furnishing Units 117 Market Research & Information under progress 5 units and ES
Car mattress mfrs. 100 Market Research & Information under progress 5-10 units and ES
Challenges for VNS:
-Extremely low labour cost in emerging market, local manufacturers are preferring for manual packaging method-Take time to educate the market to aware the importance of production cost saving, value-added from standardization & efficiency from automation and long-term benefits.>Figure support the result with on site demonstration>Trial sales in bundle selling with VNS + ES
Fastener Asia Pacific
112/04/138
• Major Competitors in the market :
» ARROW (NPD, PPD, GUN & ATACH)» TSP (PS, PSM)» SAGA (PS, PSM, MCF)» Local & others (NPD, PPD, GUN & ATACH)
• Competitors update:
» Earlier TSP used to sell their products through SAMTEX, but now they have opened their own office in India.
» SAMTEX is now selling 5TEND & 7TEND in their own brand name- SAMTEX
» Made in China PS (with or without brand) are being sold by dealers
» Major local producer,- Arrow has their own manufacturing facilities in Bangalore,India
» Anchor- No manufacturing unit so far in India, Pee-Vee is the main company who is importing this brand from China and selling it in India.
» SAGA ‘s dealer – Godolo & Godolo who are used to sell AD products in 2005
Competitors info
Fastener Asia Pacific Market share by Product Category
112/04/139
Fastener Asia Pacific
112/04/1310
Major product category & competitor information
Item Cat. ApplicationTSP/China/SAGA (Landed prices
to Dealers)
Arrow price to Dealer (Landed
prices)
AD Price to dealer (Ex-Works
HK prices)
AD Landed price (Ex-Works
HK+Freight+Import Duty+in land Haulage+Dist.
Margin)
Landed Price Difference
Price Difference in
%
Target Prices (Ex-Works HK)
Monthly Qty projection
(approximate qty)
PSM WashingUS$ 700/pc to US$ 750/pc
US$ 1100/pc US$ 1540/pcUS$ 840/pc
-54.5%
US$ 750 to US$ 800/pc
5 pcs
PSLabel Attaching &
WashingUS$ 0.60/k to US$ 0.70/k
US$ 0.60/k to
US$0.75/KUS$ 0.84/k to US$ 1.05/k
US$ 0.24/k 33%US$ 0.45/k
to US$ 0.50/k
37,500k
NPD WashingUS$ 0.50/k to US$ 0.60/K
US$ 0.50/k to US$ 0.60/K
US$ 0.50/k to US$ 0.60/k
US$ 0.70/k to US$ 0.84/k
US$ 0.20/k 29%US$ 0.35/k
to US$ 0.40/k
25,000k
MCF WashingUS$ 0.80/k to US$ 0.85/k
US$ 0.76/k to US$ 0.81/K
US$ 1.06/k to US$ 1.13/k
US$ 0.26/k 25%US$ 0.60/k
to US$ 0.65/k
20,000k
ATACH Label Attaching US$ 0.24/k to US$ 0.28/k
US$ 0.92/k to US$ 1.46/k
US$ 1.29/k to US$ 2.05/k
US$ 1.05/k 86%US$ 0.20/k
to US$ 0.25/k
40,000k
PPD Label Attaching US$ 0.14/k to US$ 0.20/K
US$ 0.34/k to US$ 0.53/K
US$ 0.48/k to US$ 0.74/k
US$ 0.34/k 73%US$ 0.15/k
to US$ 0.18/k
50,000k
Fastener Asia Pacific Price difference in %
112/04/1311
Fastener Asia Pacific
112/04/1312
Issues to be resolved to close the gap
Fastener Asia Pacific
112/04/1313
Actions to be considered
Big gap on pricesHigh Import Duty > Develop 2nd Tier Products as alternative/strategic items > Develop 2nd Tier Brand > Seek for OEM sources locally > JV manufacturing locally for long term
Service Level / offer in local currencyFlexibility on MOQ/Lead time
Payment Credit Term
After-sales and technical support locally
Commission request for the buyers
• > Develop good partner for such supports when we can allow them enough margin • > Expand potential reseller base to provide better local support and share our burden and risk
CounterfeitFake/counterfeit products ruin AD Brand/ Reputation
>Collect market information and counterfeit samples as evidence for legal action >Legal action for IP infringement >Promote strategic item- SPC1763 instead of ST15 in long term to rebuild the market confidence on AD- PS
Fastener Asia Pacific Landed cost calculation – Commodity items
ADHK >>>> Distributor >>>> End Usere.g. Plastic Staple ( SPC 1763) @US$0.60/K Ex-work HK+Freight (7%) +Import Duty (40%) +Local handling charge (2%) +Margin for resellers (15%) ------------------------------------------------------------------------------------------- End User price = 0.6 + 0.042 + 0.24 + 0.012 + 0.09 = US$0.984 / K
Fastener Asia Pacific
Import Duty Structure:
Simple Case: PSM - Plastic Staple Machine( ST 9000) : @USD 1100 / K Ex HK.
+ Freight (7%)
+Import Duty (40%)
+Inland Haulage (2%)
+Dist Margin (15%)
________________________________________________
End User Price = 1100 + 77 + 440 + 22 + 165
= USD 1804
Fastener Asia Pacific
• Thank you~