Karnataka: the textile capital of India

Global Investors’ Meet - 2012

Page 2Textiles & Apparels Karnataka: Textile

Karnataka: flourishing with a magnitude of opportunities in textile and apparel

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0100200300400500600

Handloom Powerloom Spinning Processing Garments Technical Textile

US$

mill

ion

Government has targeted investments of US$ 1,041-million in apparel and textile sectors between 2011-12 and 2012-13

Projects at costs of US$ 192-million available for immediate investment

Bellary Textile Park for denim manufacturing US$ 41.67-million

Chickballapur Textile Park for garmenting US$ 41.67-million

Premadurai Exports Mega Project US$ 41.67-million

Ambaji Enterprises Mega Project US$ 21.88-million

Pashupathi Polytex US$ 20.83-million

Gulbarga Textile Park for garmenting US$ 14.58-million

Davangere Cluster Park US$ 10.42-million

Technical Textile Machinery / Weaving Park Mega Project -

Page 3Textiles & Apparels Karnataka: Textile

Why Karnataka?

• India’s textile industry contributes ~14% to industrial production, 4% to GDP and 17% tocountry’s export earnings.

• At 9 million hectares, India constituting 25 per cent of the world’s total cotton cultivation area.

• India is the second-largest producer of silk in the world after China and seventh-largestproducer of wool in the world; major sourcing base for international retail players

• Textiles provide direct employment to over 35 million people in India

• Largest producer & exporter of silk & silk products in India; Accounts for 65% share inraw silk production of the country; 24.21% share in value of exports of Silk goods from India

• Contributes approximately 6% to the total cotton production of the country andapproximately 12% of India’s total wool production

• Ready made garments constitute approximately 3.6% of total exports from the State

• One of largest employment generating industries after agriculture with approximately 386,000manufacturing units engaged at the organized and unorganized level

Textiles industry value chain and key segments

Raw material Ginning Spinning Weaving

/ KnittingProcessin

g

Garment/ Apparel

productionProcess

Cotton, jute, silk, wo

olFibre* Yarn Fabric Processed

fabric

Final garment/ Apparel

Output

* Including cotton, jute, silk, wool and manmade fibres

• Woollen textiles• Silk textiles

• Jute textiles• Technical textilesYarn and fibre segment

The major sub-industry sectors for textiles in India include:

Cotton/ Man-Made Fibre Textiles Mill Industry Man-Made Fibre / Filament Yarn Industry

Wool and Woolen Textiles Industry Sericulture and Silk Textiles Industry

Handlooms Handicrafts

Jute and Jute Textiles Industry Technical textiles

Textile Capital of India

Karnataka accounts for 20% of the national garment production valued at around US$ 1.56-billion and 8% of the national exports

Page 4Textiles & Apparels Karnataka: Textile

Abundant raw material and intellectual capital: promote industry’s growth

• Workforce of approximately 55,000 weaverfamilies with handlooms and over one millionpower-looms in state

• 105 Skill Development Centers and 240 privatetraining centers funded by Department ofHandloom and Textile have trained 66,000workers

Cotton-producing districts

Wool-producing districts

Silk-producing districts

Cotton & Wool-producing districts

Skilled manpower

• 6% of India’s cotton production: Area of533,000 hectares yielded 10,360,000 bales of170 kg lint in 2010-11, with annual cottonproduction growing by 37.4% due to increase inarea and yield efficiency

• 65% of India’s raw silk: At end of September2010, area under mulberry cultivation in thestate was approximately 66.89 thousandhectares and raw silk production was 3.55metric tonnes

• Sericulture employs approximately432,000 people in the State

• 66 cocoon markets and 10 silk exchangesfacilitate silk trade

Ample raw material

Capacity of 0.9 million bales

Capacity of 8,241 metric tonnes

Capacity of 5.3 million kilograms

Activity Districts Production Capacity

Spinning 9 1.17 million spindles

Powerlooms 19 0.9 mio looms

Handlooms 15 0.8 mio looms

Processing 3 65 million meters p.a.

Garmenting 20

Page 5Textiles & Apparels Karnataka: Textile

Policy and intellectual capital: facilitating an investor-friendly environment

• Capital investment and other special subsidies

• Entry tax and stamp duty reimbursements

• Power subsidies

• Subsidy for Land/Shed allotted through KIADB/KSSIDC

• Market development of new designs and products - Up to Rs. 25 lakhs

• Strengthening of existing training centers and establishment of new skill development centers

• Cluster-based development strategy and funding support for development of greenfield textileand garment industry parks

• Common Effluent Treatment Plant and Hazardous Waste Disposal Facility

• Capacity Building Support

• Design Development and Product Diversification

• Human Resources Development & Skill Up gradation

• Allotment of land for textile and apparel cluster, provision of utilities up to the doorstep ofcluster projects

• Special incentives for Mega Projects, projects with investments over US$ 20.83-million thatgenerate direct employment over 500 persons

Incentives offered under state textile policy, Suvarna Vastra Neethi 2008-13

Textile-based Organizations and Institutions in Karnataka

• Central Silk Technological Research Institute

• National Institute of Fashion Technology

• Government Institute of TextileTechnology, Bangalore

• Vogue Institute of Fashion Technology

• Textile Training and Technical Colleges atBangalore, Gadag, Davengere, and Raichur

• Apparel Export PromotionCouncil, Bangalore

• Central Silk Board and Silk Exchange

• Textile Committee

• Weavers Service Center

• Karnataka Handloom DevelopmentCorporation, Hubli

• Karnataka State Powerloom DevelopmentCorporation Ltd, Bangalore

• Spinning Mill Federation, Bangalore

With the largest number of ITIs in the country , policy provides for skill upgrades of 80,000 persons at 100 ITIs

Page 6Textiles & Apparels Karnataka: Textile

Extensive existing and proposed industry infrastructure support

Industry Clusters

Ready made Garments

Handloom Clusters

Industrial MSME Clusters

Apparel ParkApparel Park (proposed)

Textile Parks (proposed)

Bidar

Yadgir

Gulbarga

Belgaum

Bellary

Chikaballapur

Kolar

Chikmagalur

Hassan

Mandya

Kodagu

Raichur

Koppal

Bagalkote

Bijapur

Dharwad

Haveri

Gadag

DakshinaKannada

Mysore

Chamarajanagara

Shimoga

Davanagere

Chitradurga

Uttara Kannada

UdupiTumkur

Bangalore Urban

Bangalore Rural

Presence of integrated textiles and apparel clusters servicing industry units across the value chain

10 handloom clusters located in Bagalkote, Chitradurga, Dharwad, Udupi, Koppal, Tumkur, Mysore, Bangalore, Kolar, Gulbarga and Belgaum Districts

233.3 hectare Textiles SEZ proposed to be developed by KIADB at district Hassan

Dedicated Apparel zones planned in BengaluruRural, Tumkur, Kolar, Mandya, Belgaum, Bidar and Dharwad along the SuvarnaKarnataka Development Corridor

A US$10.4 million ‘Silk City’ is proposed to be developed near Bengaluru

Infrastructure & Logistics

Land identified for inclusion in bank : 121,286 acresNotifications for 86,571 acres already issued

To facilitate investments for development of infrastructure projects, Karnataka Industrial Areas Development Board is allowed to purchase minimum 2000 acres of land from each district in Karnataka for development of industrial infrastructure and mega projects across various sectors in the state

Page 7Textiles & Apparels Karnataka: Textile

Strong investment history: demonstrating a healthy investment environment

Investments earned: US$ 139.58-million

Doddabalapura Integrate dTextile Park US$ 62.50-million

Bellary Denim Park US$ 41.67-million

Gulbarga Textile Park US$ 20.83-million

Binary Apparel Park US$ 14.58-millionText

ile P

arks

Investments earned: US $136.46-million

Chickballapur Integrated Textile Park US$ 62.50-million

Prem Durai Exports Mega Project US$ 41.67-million

Vara-Maha Laxmi Textile Mega Project US$ 21.88-million

Technitex India US$ 10.41-million

Mega Projects

Small & Medium Enterprises

Estimated investments of US$ 69.23-million in small and medium-sized textile units across the state

• Under the current policy, State hasattracted US$ 417-million ininvestments

• Global Investors’ Meet 2010achieved MOU’s for 6 projects with anestimated employment opportunity for93,000 people and investment ofUS$ 312.5-million

• Over US$ 104-million investmentsin state’s technical textile sector inthe last three years: Department ofHandloom and Textiles has speciallyemphasied on the development of thetechnical textile sector in the state

Investment promotion initiatives Mega Project Investments

Shahi Exports Pvt. Ltd US$ 135.42-million

Etco Denim Pvt. Ltd US$ 93.75-million

Precot Meridian US$ 72.92-million

Shahi Exports Pvt. Ltd US$ 22.92-million

Padmashree Ravindra Babu

Spinning and Textiles Pvt. LtdUS$ 30.21-million

Total US$ 355.21-million

Page 8Textiles & Apparels Karnataka: Textile

Key industry players

The industry has witnessed the success stories of many prominent textile majors who hadestablished their base in Karnataka

Company Products Brief profile

Karnataka Silk Industries Corporation (KSIC)

Silk Saree

Established in the year 1912 by the Maharaja of Mysore province, KSIC is today owned by the GoK. It is specializes in production of 100% pure silk with pure gold zari

Himatsingka SeideLtd Home textiles

Incorporated in 1985, the Group focuses on the manufacturing, retailing and distribution of Home Textile products.

Gokuldas Exports Ltd

Readymadegarments

Manufacturer & exporters of ready made garments; 46 fully equipped, modern, manufacturing factories with capacity to produce and export 3 million Woven & 1 million Knit apparel per month

Texport Overseas Pvt. Ltd

Readymade garments

Has 14000 employees and the capability to manufacture 800,000 high-quality garment pieces every month. Their main export markets are USA and European Union.

Reid & TaylorSuiting's & readymadegarments

Launched by SKNL in India in 1998 with the inauguration of a state-of-the-art fabric plant at Mysore. Range of products include formal and casual daywear suits, jackets, trousers, shirts ties and accessories along with a wide selection of T-shirts, jeans, and other weekend wear

Raymond Ltd. Suiting's & readymade garments

One of India’s largest players in fabrics, designer wear, and denim. It has its presence in Karnataka at Chikkaballapur (Readymade garments) and Bangalore Rural (Suits, Jackets and Trousers)

Gokak Mills Cotton

Part of the the Shapoorji Pallonji Group.,Gokakproduces Dyed yarns, Yarns, Canvas and Made ups. It is one of the largest manufacturer and exporters of yarns.

Page 9Textiles & Apparels Karnataka: Textile

Special support for investors

Single Window Clearance Committee

► Single contact point for all investors in Karnataka► Karnataka Udyoga Mitra: nodal agency that facilitates investments and executes initiatives to

enable smooth transition from the investment proposal to implementation► State High Level Clearance Committee: Chaired by Honorable Chief Minister of State of

Karnataka to approve projects with investments above Rs. 50-crore► State Level Single Window Clearance Committee: Chaired by Honorable Minister for Large

and Medium Industries, meeting every month to approve projects with investments betweenRs. 3-crore and Rs. 50-crore

► District Level Single Window Clearance Committee (DLSWCC): Chaired by DeputyCommissioner of the District , who approves projects with investments up to Rs. 3 crore

► Combined Application Form: Available on KUM website for obtaining required statuaryapprovals

Mega Projects

► Under Suvarna Vastra Neethi 2008-13, GoK has been providing special support for substantialinvestment s in the State over and above those indicated in the Policy

► Mega Projects: Textiles and garmenting units investing above US$ 21-million and providingdirect employment above 500 in Zone 1 and Zone 2 areas

► Currently, incentives provided on a case-by-case basis► Mega Project Policy currently under development for guiding mega project investments in the

State

Scheme Management Assistance

Department of Handloom and Textiles, Government of Karnataka, assists investors in all facets ofproject implementation► Enlisting support from stakeholders and schemes that demonstrate synergies with investment

proposals of project proponents► Obtaining necessary statutory approvals and access to external infrastructure► Preparation of bankable Detailed Project Reports► Availing bank credit, as necessary

Department of Handloom & Textiles, Government of Karnataka, has appointed IL&FS Clusters asits Scheme Management Agency to facilitate investments in State’s textile sector

Page 10Textiles & Apparels Karnataka: Textile

Key Contacts

Principal Secretary to Govt of KarnatakaCommerce & Industries Department# 106, 1st Floor, Vikasa SoudhaDr. Ambedkar Veedhi,Bangaluru 560 001, India.Email : prs_ci@karnataka.gov.in

Commissioner for Textile Development and Director of Handlooms and TextilesNo. 14/3a, RP Bhavan, Nripatunga road, Bangaluru – 560 001Ph: +91 80 22271628 Fax: +91 80 22226082e-mail: texcomgok@yahoo.co.in

Commissioner for Industrial Development and Director of Industries & Commerce2nd Floor, Khanija BhavanNo.49, Race Course Road, Bangaluru – 560 001www.karnataka.industry.gov.inEmail : commissioner@karnatakaindustry.gov.in

Karnataka State Powerloom Development Corporation Ltd.6th Floor, Vokkaligara Bhavana D J C Complex, K R C Circle, Bangaluru – 560 027Ph: +91 80 22291471, 22228515Fax: +91 80 22235790e-mail: kspdc@dataone.in

Karnataka Udyog MitraManaging Director, Karnataka Udyog Mitra,3rd Floor, Khanija Bhavan (South Wing), No.49, Race Course Road,Bangaluru – 560 001www.kumbangalore.comPh : 91-80-2228 2392, 2228 5659; 2238 1232, 2228 6632 Fax : 91-80-2226 6063Email : md@kumbangalore.com