STUDY THE MARKET SIZE OF FANCY YARNS AND ITS

FUTURE TRENDS

RESEARCH PROJECT

Submitted to Punjab Technical University

In the partial fulfilment of the requirements for degree of

MASTERS

OF

BUSINESS ADMINISTRATION

BY

NAVNEET SURI

(University roll no. - 94972238200)

DEPARTMENT OF BUSINESS MANAGEMENT

PUNJAB COLLEGE OF TECHNICAL EDUCATION

LUDHIANA

AFFILATED TO

PUNJAB TECHNICAL UNIVERSITY, JALANDHAR

2009-11

Certificate –I
1
This is to certify that report entitled “Study the market size of fancy yarns and
its future trends” submitted for the degree of MBA in subject of summer
training report is a bonafide research project carried out by Navneet Suri, PCTE
student under my supervision and no part of this report has been submitted for
any other degree.

The assistance and help received during the course of investigation have been
fully acknowledged.

Mr. P.P. Singh

Major Faculty Advisor

PCTE, Ludhiana

Certificate -II

2
This is to certify that report entitled “Study the market size of fancy yarns and
its future trends” submitted for the degree of MBA in subject of summer
training report is a bonafide research project carried out by Navneet Suri, PCTE
student under my supervision and no part of this report has been submitted for
any other degree.

The assistance and help received during the course of investigation have been
fully acknowledged.

Mr. Vinay Srivastava

(Major Advisor, Industry)

3
 ACKNOWLEDGEMENT

My summer training project at Vardhman Textile Ltd, Ludhiana has been a good learning
experience. It has helped me strengthen my conceptual base and given me an insight into the
field of project management. This would not have been possible without the whole-hearted
and continuous support of several people. I would like to take this opportunity to thank all
those who have made this project possible.

I am sincerely grateful to Mr. Vijay Puniyani, Vice President, Marketing and Mr. Vinay
Srivastava, Assistant Manager of Vardhman Textile Ltd, Ludhiana, for sharing his
knowledge and guiding me throughout the project duration.

Words fail me when it comes to thank my family for motivating and helping me at every
phase and always being there by my side in all dawns and dusks.

I owe my wholehearted thanks to the entire staff of Vardhman Textiles Ltd. for their kind
cooperation and assistance during the course of my project.

Finally, I express my indebtedness to all who have directly or indirectly contributed to the
successful completion of my industrial training at Vardhman Textiles Limited.

I would like to thank my mentor Mr. P.P. Singh who was there to guide me throughout my
project and helped in the completion of the final report.

Navneet Suri

4
 Abstract

Summer internship program is undertaken to convert the theoretical knowledge into practical
one. This first hand experience helps the students to view the real business world closely,
which in turn would influence their conceptions & perceptions.

My project is ‘Study of Market size of Fancy Yarns in Ludhiana’ incurred by Vardhman.

The study was conducted at Corporate Office of Vardhman under Marketing Department. My
project was of six weeks duration.

The study was aimed at finding out the major competitors of Vardhman in the Fancy Yarn
Market in Ludhiana and to determine their market share. Also the strengths and the
weaknesses of Vardhman vis-a-vis its competitors were analyzed which could help the
company increase its market size.

A survey of dealers was conducted to determine their annual purchase from different
suppiers, in order to find out the market size. In order to get an understanding of the
perceived future trends of Fancy yarns for the coming years, a survey of customers was
conducted.

Research Objectives:

 To measure the market size of Fancy yarns in Ludhiana city.

 To find out the competitors of Vardhman in the Fancy yarns market.

 To know the supplier wise product range of Fancy yarns.

 To determine the perceived future trends of Fancy yarns.

Mr. P.P. Singh Navneet Suri

Major Faculty Advisor

PCTE, Ludhiana

5
 TABLE OF CONTENTS

PART-A

Chapter 1
Pg No.

INTRODUCTION TO INDIAN TEXTILE INDUSTRY 12-15

• Technical Textile Segment

• Government Initiative
• Investments
• Reason for demand contraction in 2009
• The Road Ahead

Chapter 2

INTRODUCTION TO VARDHMAN TEXTILES LTD. 16-41

• Establishment of vardhman

• Vardhman Group

• Mission

• Logo

• Group Philosophy

• Subsidiaries

• Quality Policy

• Board of Directors

• Departments

• Product range of the group

• Global Alliance
6
 • Achievements

• CSR

Chapter 3

FINANCIAL ANALYSIS 44-52

• Ratio Analysis
Chapter 4
53

SWOT ANALSIS OF THE TRAINING UNIT

PART-B

Chapter I
55-60

INTRODUCTION TO THE PROJECT

• Overview of Fancy yarn

• Yarns in Vardhman

Chapter II
61-69

REVIEW OF LITERATURE

Chapter III
70-75

RESEARCH METHODOLOGY

• Need of study
• Objectives of Study
• Research Methodology
• Limitations of Study
7
Chapter IV
76-93

DATA ANALYSIS AND DISCUSSUONS

Chapter V
94-95

CONCLUSIONS

SUGGESTIONS

Bibliography
96-97

Annexure
98

LIST OF TABLES

Table No. List of Tables Pg No.

4.1 Source of procurement of fancy yarn 76

4.1(a) Dealers dealing with single suppliers 77

4.2 Dealers dealing with multiple suppliers 78

4.3 Showing segment consuming fancy yarn 79

4.3(a) Segments covered by fancy yarn 80

4.4 Annual purchase of fancy yarn 81

4.5(a) Different fancy yarns supplied by different 81

companies
4.5(b) Market share of different companies 82

4.6 Attributes in order of preference 83

4.7(a) Performance of different companies in terms 84

of quality
4.7(b) Performance of different companies in terms 85

8
 of Reasonable price
4.7(c) Performance of different companies in terms 86
of better services
4.7(d) Performance of different companies in terms 87
of New development
4.8 Most saleable brands in yarns 88

4.9 Years from which consumer consume fancy 89

yarn
4.10 Source of procurement 90

4.11 Demand criteria of previous 3 years 90

4.12 Future demand of fancy yarn 91

4.13 Vardhman future demand 92

9
 LIST OF FIGURES

Figure No. List of Figures Pg No.

4.1 Source of procurement of fancy yarn 76

4.1(a) Dealers dealing with single suppliers 77

4.2 Dealers dealing with multiple suppliers 79

4.3 Showing segment consuming fancy yarn 79

4.3(a) Segments covered by fancy yarn 80

4.4 Annual purchase of fancy yarn 81

4.5(a) Different fancy yarns supplied by different 82

companies
4.5(b) Market share of different companies 83

4.6 Attributes in order of preference 84

4.7(a) Performance of different companies in terms 85

of quality
4.7(b) Performance of different companies in terms 86
of Reasonable price
4.7(c) Performance of different companies in terms 87
of better services
4.7(d) Performance of different companies in terms 88
of New development
4.8 Most saleable brands in yarns 88

4.9 Years from which consumer consume fancy 89

yarn
4.10 Source of procurement 90

4.11 Demand criteria of previous 3 years 91

4.12 Future demand of fancy yarn 91

4.13 Vardhman future demand 92

10
11
 Chapter 1:
Indian Textile Industry

The Indian textile industry contributes about 14 per cent to industrial production, 4 per cent to
the country's gross domestic product (GDP) and 17 per cent to the country’s export earnings,
according to the Annual Report 2009-10 of the Ministry of Textiles.It provides direct
employment to over 35 million people and is the second largest provider of employment after
agriculture.

According to the Ministry of Textiles, the cumulative production of cloth during April’09-
March’10 has increased by 8.3 per cent as compared to the corresponding period of the
previous year.

Moreover, total textile exports have increased to US$ 18.6 billion during April’09-
January’10, from US$ 17.7 billion during the corresponding period of the previous year,
registering an increase of 4.95 per cent in rupee terms. Further, the share of textile exports in
total exports has increased to 12.36 per cent during April’09-January’10, according to the
Ministry of Textiles.

As per the Index of Industrial Production (IIP) data released by the Central Statistical
Organisation (CSO), cotton textiles has registered a growth of 5.5 per cent during April-
March 2009-10, while wool, silk and man-made fibre textiles have registered a growth of 8.2
per cent while textile products including wearing apparel have registered a growth of 8.5 per
cent.

Technical Textile Segment

According to the Ministry of Textiles, technical textiles are an important part of the textile
industry. The Working Group for the Eleventh Five Year Plan has estimated the market size
of technical textiles to increase from US$ 5.29 billion in 2006-07 to US$ 10.6 billion in
2011-12, without any regulatory framework and to US$ 15.16 billion with regulatory

12
framework. The Scheme for Growth and Development of Technical Textiles aims to promote
indigenous manufacture of technical textile to leverage global opportunities and cater to the
domestic demand.

Government Initiative

TUFS was initially launched in 1999 for a 5 year period, and was extended by the Ministry of
Textiles for the 11th Five Year Plan (2007-2011) to boost the industry. According to the
Ministry of Textiles, investment under the Technology Upgradation Fund Schemes (TUFS)
has been increasing steadily. During the year 2009-10, 1896 applications have been
sanctioned at a project cost of US$ 5.23 billion. The cumulative progress as on December 31,
2009, includes 27,477 applications sanctioned, which has triggered investment of US$ 45.5
billion and amount sanctioned under TUFS is US$ 18.9 billion of which US$ 16.4 billion has
been disbursed so far till the end of April, 2010.

Moreover, in May 2010, the Ministry of Textiles informed a parliamentary panel that it
proposes to allocate US$ 785.2 million for the modernisation of the textile industry.

The Scheme for Integrated Textile Park (SITP) was approved in July 2005 to facilitate setting
up of textiles parks with world class infrastructure facilities. 40 textiles park projects have
been sanctioned under the SITP. According to the Minister of State for Textiles, Panabaaka
Lakshmi, under the SITP, a cumulative expenditure of US$ 204.3 million has been incurred
against allocation of US$ 220.7 million in the last three years.

In the Union Budget 2010-11 presented in February 2010, the Finance Minister made the
following announcements to benefit the textile industry:

• The central plan outlay for the industry has been enhanced to US$ 1.03 billion. Of this
US$ 521.4 million is for TUFS, US$ 76 million for SITP, US$ 80.2 million for
handlooms, US$ 69.3 million for handicrafts and US$ 98.4 million for sericulture.
• Allocation for textiles and jute industry is US$ 713.4 million
• The total allocation for village and small enterprises sector which include handicrafts
and handlooms is US$ 210.3 million.
• US$ 31.5 million has been provided for development of mega clusters in handlooms,
handicrafts and powerloom sectors.

13
 • Customs duty at 4 per cent for import of readymade garments for retail sales has been
withdrawn.
• The micro small medium enterprises in textiles sector have been given full CENVAT
credit on capital goods in one instalment in the year of receipt of such goods and the
facility of payment of excise duty in quarterly basis.

Investments

According to the Minister for Textiles, Mr Dayanidhi Maran, around US$ 5.35 billion of
foreign investment is expected to be made in India in the textile sector over the next five
years.

The textiles industry has attracted foreign direct investment (FDI) worth US$ 817.26 million
between April 2000 and March 2010, according to data released by the Department of
Industrial Policy and Promotion.

• S Kumars Nationwide has formed a joint venture (JV) with Donna Karan
International to design, produce and distribute the entire range of DKNY menswear
apparel across the world except Japan for 10 years. The new venture will invest US$
25 million for expansion of Donna Karan’s menswear brand and expects to record
sales of about US$ 140 million in the next three years.
• The Andhra Pradesh government has allocated over 1000 acres of land for the
Brandix India Apparel City (BIAC) in the state’s special economic zone (SEZ), which
was inaugurated in May 2010. The apparel city is expected to attract an investment of
US$ 1.2 billion (around Rs 5,400 crore).
• Private equity firms TPG and Bain Capital have picked up stakes in children apparel
retailer Lilliput Kidswear for US$ 27 million and US$ 60.7 million respectively.
• World's leading lingerie brand, Germany-based, Triumph International, plans to
invest over US$ 217 million in India to open 12 more flagship outlets and 30
additional EPS (Exclusive Partner Stores) during 2010.

14
Reason for demand contraction in 2009

The demand contraction and low consumer spending in the USA, the EC and Japan had
decisively impacted the demand for imported textiles and clothing from both, the USA and
the Europe. Due to reduced export demand from the USA and the EC countries, the textile
industry in both India and China has been in slow off-take phase. As of present, the Textile
and clothing sector has already touched the bottom of the 'U'; and the future direction for
production and demand can be positive only. This can be verified from the fact that Indian
exports grew by about 8% in November’09 after declining for more than a year. The rise was
because of a recovery in demand in Europe, Africa and Latin America.

The Road Ahead

The Synthetic and Rayon Textile Export Promotion Council (SRTEPC) has set a target to
more than double the export of man-made textile from the country. Presently, the global man-
made fibre (MMF) trade accounts for 60 per cent of the total trade in textiles. SRTEPC plans
to increase exports to US$ 6.2 billion by capturing four per cent market share by 2011-12.
The domestic textile (readymade garments and home textile) market is expected to grow at a
CAGR of 6-7% in the next 3 years (2008-09 to 2011-12).

Exchange rate used:

1 USD = 44.49 INR (as on April 2010)
1 USD = 46.03 INR (as on February 2010)

15
 Chapter 2

INTRODUCTION TO VARDHMAN TEXTILES LTD.

ESTABLISHMENT OF VARDHMAN
The industrial city of Ludhiana, located in the fertile Malwa region of Central Punjab is
otherwise known as the “MANCHESTER OF INDIA”. Within the precincts of this city is
located the Corporate Headquarters of the Vardhman Group, a household name in Northern
India has carved out a niche for itself in textile industry. The Vardhman Group born in 1965
under the entrepreneurship of Late Lala Rattan Chand Oswal, father of present Chairman
cum managing director Sh. S.P.OSWAL, has today blossomed into one of the largest
Textile Business houses in India.

At its inception, Vardhman had an installed capacity of 14,000 spindles; today, its capacity
has increased multifold to over 8 lacs spindles. In 1982 the Group entered the sewing thread
market in the country which was a forward integration of the business. Today Vardhman
Threads is the second largest producer of sewing thread in India. In 1990, it undertook yet
another diversification - this time into the weaving business. The grey fabric weaving unit at
Baddi (HP), commissioned in 1990 with a capacity of 20,000 meters per day, has already
made its mark as a quality producer of Grey poplin, sheeting, shirting in the domestic as well
as foreign market. This was followed by entry into fabric processing by setting up Auro
Textiles at Baddi and Vardhman Fabric at Budhni,Madhya Pradesh. Today the group has 900
shuttleless looms and has processing capacity of 90mn meters fabrics/annum.

In the year 1999 the Group added yet another feather to its cap with the setting up of
Vardhman Acrylics Ltd., Bharuch (Gujarat) which is a joint venture in Acrylic Fibre
production undertaken with Marubeni and Exlan of Japan. The company also has a strong
presence in the markets of Japan, Hong Kong, Korea, UK and EU in addition to the domestic
market. Adherence to systems and a true dedication to quality has resulted in obtaining the
coveted ISO 9002/ ISO 14002 quality award which is the first in Textile industry in India and
yet another laurel to its credit.

16
About Vardhman Group

Vardhman Group is a leading textile conglomerate in India having a turnover of $700 mn.
Spanning over 24 manufacturing facilities in five states across India, the Group business
portfolio includes Yarn, Greige and Processed Fabric, Sewing Thread, Acrylic Fibre and
Alloy Steel.

Vardhman Group manufacturing facilities include over 8,00,000 spindles, 65 tons per day
yarn and fibre dyeing, 900 shuttleless looms, 90 mn meters per annum processed fabric, 33
tons per day sewing thread, 18000 metric tons per annum acrylic fibre and 100,000 tons per
annum special and alloy steel.

Vardhman has evolved through history from a small beginning in 1965 into a modern textile
major under the dynamic leadership of its chairman, S.P.Oswal. His vision and insight has
given Vardhman an enviable position in the textile industry. Under his leadership, Vardhman
is efficiently using resources to innovate, diversify, integrate and build its diverse operations
into a dynamic modern enterprise.

The Vardhman group comprises of three listed and two unlisted companies-

Listed Companies

 Vardhman Textiles Limited (formerly Mahavir Spinning Mills Limited)

 Vardhman Acrylics Limited
 Vardhman Holdings Limited1 (formerly Vardhman Spinning & General Mills
Limited)
Unlisted Companies

 VMT Spinning Company Limited

 Vardhman Threads Limited

17
 Mission

Vardhman aims to be the world class Textile organization producing diverse range of
products for the global Textile market. Vardhman seeks to achieve Customer delight through
excellence in manufacturing and customer service Based on creative combination of state of
the art technology and human resources. Vardhman is committed to be a responsible
corporate citizen.

The mission of the Vardhman Group can be summed up in a single line i.e.

“BEING WORLD CLASS SPINNERS BY PROVIDING HIGHEST

QUALITY PRODUCTS WITHIN MINIMUM COST”.

18
The “Flame” signifies growth i.e. growth of the company along with the growth of each and
every individual associated with it whether he/she is a worker , a white collar employee, a
shareholder or a customer.

The “Stick” symbolizes cotton that is the basic raw material of the core product of Vardhman.

The “V” stands for the Vardhman Group.

Group Philosophy

19
The Vardhman Group has always emphasized on total customer focus in all operational areas.
It has continuously monitored and nurtured relationships with all the customers and business
associates.

VARDHMAN BELIEVES IN:

 The fact that ‘change ‘is a way of life.

 Absolute market orientation for a quick and positive response to the customer’s needs.
 An uncompromising commitment to a flexible, professional and personalized service
from within a stimulating result oriented environment.
 Delivery to a constant standard and on time.
 Response approach to the benefits of R&D and the modern technology.
 Having faith in individual potential and respect for human values.
 Being a responsible corporate citizen with due respect to the laws of the land and its
environment.
 Product to be the best available quality for premium market segment.
 These underline the corporate philosophy, which has shaped VARDHMAN OF YESTER
YEARS into VARDHMAN OF TODAY.
 Encouraging innovation for constant improvement to achieve excellence in all functional
areas.

Subsidiaries

20
Vardhman Textiles Ltd has the following subsidiary companies the details of which are given
below:

VMT spinning company Ltd:

This joint venture with Marubeni Corporation and Toho Tenax company limited of Japan is a
listed company of the group. Vardhman holds close to 73% paid-up share capital of the
company.

VTL Investments limited:

The thread undertaking of this 100% subsidiary has demerged and vested in Vardhman Yarns
and Threads Limited with effect from 1.04.2007. VTL Investments (formerly known as
Vardhman Yarns and threads Ltd) is now left with the business of financial and investment
activities.

Vardhman Acrylics Limited (VAL):

The company ventured into the Acrylics Fibre project in collaboration with Marubeni
Corporation and Japan Exlan Company Ltd of Japan under the name of this company.
Presently the company holds 54.60% (2008-2009) shares in this subsidiary.

Vardhman Yarns and Threads Limited:

As a result of the demerger arrangement among Vardhman Textiles Ltd, VTL Investments
Ltd (formerly known as Vardhman Threads Limited), and Vardhman Yarns and Threads
Limited, the thread undertaking of Vardhman Threads Ltd and Vardhman Textiles Ltd has
been vested in Vardhman Yarns and threads Ltd.

Quality Policy

21
Vardhman is the market leader in terms of quality of its quality of its products which justifies
the price premium of the product. Therefore its quality policy has a very important role to
play in its organizational culture.

Its quality policy states that “Quality should be built into the company’s products not only to
meet customer’s requirements continuously but also exceed them. The company shall achieve
this interface with the market place, access to the state of art technology, R&D, process
development and adoption of innovative manufacturing and marketing strategies and it shall
be implemented through a network of system and procedure understood and followed
throughout the company.

The quality policy shall be integrated with company’s main objectives:

 To remain the market leader in quality

 Increase market share with focus on niche segment
 Improve productivity
 Cost reduction

More than 100 quality circles total, quality management, Manav Vikas kendras for worker
training, communication meetings, inter functional groups are utilized to send aclear message
from top to bottom that “ The Quality & service are a part and modern add on to Vardhman
Products”

BOARD OF DIRECTORS

Vardhman Textiles Limited

22
Shri Paul Oswal - Chairman & Managing Director
Smt. Amita Narain - (Nominee of IDBI)
Arun Kumar Purwar
Prafull Anubhai
Subash Khanchand Bijlani
Ashok Kumar Kundra
Darshan Lal Sharma
Shravan Talwar
Sachit Jain - Executive Director
Suchita Jain - Executive Director
Neeraj Jain - Executive Director

Vardhman Holdings Limited

Shri Paul Oswal - Chairman

Surinder Singh Bagai
Jagdish Rai Singal
Chaman Lal Jain
Ram Swarup Gupta
Bal Krishan Arora
Sat Pal Kanwar
Sachit Jain
Shakun Oswal
Suchita Jain

Vardhman Acrylics Limited

Shri Paul Oswal - Chairman

Sachit Jain
Darshan Lal Sharma
Sudeshkumar Ganpatrai Gulati

23
Sanjit Paul Singh
Munish Chandra Gupta
(Dr.)Arvind Kumar Bakhshi
Bal Krishan Choudhary - Managing Director

Organisational hierarchy chart

24
 DIFFERENT DEPARTMENTS OF VARDHMAN

• COMMERCIAL DEPARTMENT

 Marketing
25
  Costing
 Finance
 Material

• ADMINISTRATIVE DEPARTMENT

 Industrial relations
 Personnel department
 Transport
 Security
 Establishment (dispatch & issue)
 Electronic data process

• PRODUCTION DEPARTMENT

 Spinning I
 Spinning II
 Post Spinning I
 Post Spinning
 Worsted I, II
 Hand Knitting section
 Research & Development
 Dye house – unit- II

• ENGINEERING DEPARTMENT

 Electronic department
 Civil department
 Mechanical department
Functioning at a glance

Finance Department

26
Finance department deals with all the finances of the company. It uses the BPCS (Business
Planning & Control System) to manage the account books, balance sheets etc. It is the
responsibility of this department that the company is never short of funds. To arrange funds
for the whole group at least cost and to utilize in such a way so as to enhance the shareholders
wealth. They have a regular check on the accounts book that the capital is not under cast as
well as overcast. There is a separate wing of this department, the main function of which is
accounting. This dept. comes under the Commercial Block of the Unit along with
commercial, material and costing depts.

Personnel and HRD development

Vardhman is one of few organisations in the northern part of the country, which has reposed
its faith in professional management since the early stage of growth. The philosophy of the
organisation has been to promote a culture conductive to a professional style of decision
making business and also to ensure that young executives having the right attitude and
facilities are suitably trained in the organisation so that they are able to contribute its success.

Raw material and Commercial Department

The two main functions of this department are procurement of raw material and dealing with
various government and non governmental agencies for smooth functioning of the company.
The department procures raw material like raw cotton, synthetic material and other related
things from various sources within the country and from foreign markets .the domestic raw
material market is mainly divided into three parts viz. Northern zone ,central zone and
southern zone. The inputs are from various countries like Egypt, America, Australia, West
Africa, Chile ,Syria etc. the commercial functions of this department mainly comprise of:-

1. Formulation of imports /export policies of the company

2. Considering benefits against imports.

3. Incentives from the government.

4. Excise and subsidies

5. Licensing

27
Secretarial Department

The corporate secretarial houses the offices of the company secretaries of the Vardhman
spinning and general mills Ltd, Mahavir spinning mills. It deals with the compliance of all
the statutory laws under company’s act. the filling of the return, assessment of shareholder’s
wealth as well as listing of shares in the stock exchange is also done by the department. The
annual general meeting and board meeting are also conducted.

Internal Audit Department

Internal audit system is an independent and impartial appraisal function to examine and
evaluate an organization’s activities and services as eyes and ears of the management for
knowing and evaluating the areas which were weak and need strengthening. As Vardhman
has grown in the size and complexity over two decades, the scope of internal audit has
changed. Now, the internal audit has begun to focus more and more on such items operational
appraisals, analysis data processing system, management cost studies etc. Through this
department the management ensures that management control system is functioning properly,
policies and procedure are being reviewed constantly and that there is a systematic program
of review and appraisal.

Projects Department

The corporate projects and purchase departments have various sections like:

• Civil section

• Planning section

• Purchase section

• Insurance section

• Technical Section

28
The civil section deals with all the infrastructural constructions like sheds in case of mill,
utilities like compressor, substation, and boilers .they also go in for negotiations with the
contractor and also do physical checking at the sight end of the material.

The Planning function includes preparing reports of each project by coordination with the
civil and purchase.

The PURCHASE SECTION gets offer for machines does the comparison, calls the parties
that suits requirement, the most and does the necessary negotiation.

The INSURANCE SECTION looks after the group’s insurance scheme.

The TECHNICAL SECTION deals with the specification of all the machinery

29
 PRODUCT RANGE OF THE GROUP

Yarns
The constant endeavor to excel has transformed Vardhman into being the country’s largest
manufacturer and exporter of cotton yarns

Catering to the diverse requirements of the local and global clients, Vardhman offers a wide
range of specialized grey, dyed and a variety of blended yarns in cotton, polyester and
acrylic. Technical tie-ups with the world class leaders from Switzerland, Germany, Japan and
Korea have provided state-of-the art machinery that has ensured a range of products admired
across the globe for their impeccable quality and service.

Latest technology, sourced from best available around the world, combined with dexterous
hands has made Vardhman a “Super Market of High Quality Yarns”

1994 was another milestone towards its mission to supply quality products. Vardhman further
improved the value addition to its existing range of tops, fiber dyed and cone dyed yarns.

This was result of new phenomena that emerged on the horizons of Vardhman
and also of Indian Textiles. A fully integrated dyeing plant was commissioned with
technology from Nihon Sanmo Dyeing Co. Ltd., Japan, and the leader in dyeing technology
in the world. It has a capacity of processing 22 tones fiber/tops and 10-tonnes of yarns per
day.

Today Vardhman Group has over 50 tones of dyeing capacity per day, spread over various
plants.

PRODUCTS APPLICATIONS

Cotton Hosiery Yarn All kinds of knitted garments for kids,

ladies ,gents, socks, t-shirts

Woven Yarn Shirts and Trousers

Tyre Cord yarn Manufacturing of Tyres

Acrylic Yarn Sweaters and Shawls

Hand Knitting Yarn Knitting

30
Sewing Thread
Vardhman is the second largest producer of sewing thread in the country. The sewing thread
manufacturing capacity is being expanded from present 17 tons per day to 22 tons per day in
its sewing thread plants located at Hoshiarpur, Baddi and Ludhiana. Sewing threads
contributes 12 percent of the group turnover.

SEGMENT APPLICATIONS

Apparel Sewing Threads Clothing, Tailoring, Hosiery

Specialty Threads Sports, Leather Goods,

Gloves, Mattresses,
Quilting, Parachutes etc.

Textile Crafts Embroidery, Crochet

Tapestry etc.

Kite Flying Kite Flying

Fabrics
The group has created state-of-the-art fabric weaving and processing facilities in its plant at
Baddi, Northern India. The group has installed 208 shuttles less looms and a fabric
processing capacity of 30 million meters per annum in collaboration of Tokai Senko of Japan.
Fabrics business contributes 8 percent to the group turnover.

31
Fibre

Vardhman ventured into the manufacture of acrylic fiber in 1999. The Joint Venture,
Vardhman Acrylics Ltd., was s ET up together with two leading Japanese business houses
namely Japan Exlan company Ltd. and Marubeni Corporation, Japan.

Today, Vardhman Acrylics ltd. produces consistent superior quality fiber and
has emerged as an important producer in India. The products are marketed under the brand
name VARLAN.

Varlan fiber has achieved a high order of recognition in the Indian market for its use in a
wide variety of applications such as dress material, blankets, carpets, upholstery, furnishing
fabrics etc. Vardhman acrylic is committed to continuous efforts for developing newer and
exciting applications in close association with the customers and the end users.

Special steels

Vardhman Special Steels was established in the year 1972 to manufacture Special and Alloy
Steel. The true impetus came with the upgrading of the plant located in Ludhiana to an ultra
modern plant. Today it has an installed capacity of 1, 00,000 MT per annum.

Continuous research and development efforts, focused on customer satisfaction, have enabled
Vardhman Steels to meet the stringent quality requirements of producers of all types of
commercial vehicles, tractors, cars, two wheelers, defense applications, and other engineering
products. The company has received approval for its products from leading Companies like
Telco, Ashok Leyland, Maruti, Hindustan Motors, Yamaha, Kinetic and Escorts among
others.

Facilities

32
Yarn Manufacturing Units Location Spindles

Vardhman Spinning and General Mills Ludhiana (Punjab) 64572

Vardhman Spinning Mills Baddi (Himachal Pradesh) 36288

Auro Spinning Mills Baddi (Himachal Pradesh) 77792

Arisht Spinning Mills Baddi (Himachal Pradesh) 82128

VMT Spinning Company Limited Baddi (Himachal Pradesh) 45120

Arihant Spinning Mills Malerkotla (Punjab) 113804

Anant Spinning Mills Mandideep (Madhya 74496

Pradesh)

Vardhman yarns Satlapur (Madhya Pradesh) 170528

Vardhman Fabrics (Yarns Division) Bhudhni(Madhya Pradesh) 60000

Vardhman Yarns and Threads Ltd. Hoshiarpur (Punjab) 60352

Spinning

Spinning-Total 785080

Rotors

Auro Spinning Baddi (Himachal Pradesh) 1248

Vardhman Fabrics Bhudhni(Madhya Pradesh) 2160

Total 3408

Yarn & Fibre Dyeing Units Location Production

Capacity

Vardhman Spinning and General Mills, Ludhiana (Punjab) 20 Tonnes per

Dye House day

Auro Dyeing Baddi (Himachal Pradesh) 35 Tonnes per

day

Fibre Dyeing 15 Tonnes per

day

Yarn Dyeing 20 Tonnes per

day

33
Mahavir Mercerizing Unit Hoshiarpur (Punjab) 15 Tonnes per
day

Total 65 Tonnes per

day

Fabric - Weaving Units Location Production

Capacity

Auro Weaving Mills Baddi (Himachal Pradesh) 264 looms

Mahavir Spinning Mills Baddi (Himachal Pradesh) 236 looms

Vardhman Fabrics Bhudhni(Madhya Pradesh) 400 looms

Total 900 looms

Fabric Processing Units ( Finished Location Production

Fabric) Capacity

Auro Textile Baddi (Himachal Pradesh) 50 million meters

per anuum

Vardhman Fabrics Bhudhni(Madhya Pradesh) 40 million meters

per anuum

Total 90 million meters

per anuum

Sewing Thread Business Location Production

Capacity

Vardhman Yarns and Threads Limited Hoshiarpur (Punjab) 21 MT per day

(Unit -I)

Vardhman Yarns and Threads Limited Ludhiana (Punjab) 7 MT per day

(Unit -II)

Vardhman Yarns and Threads Limited Perundrai (Tamil Nadu) 3 MT per day
(Unit -III)

34
Vardhman Yarns and Threads Limited Baddi (Himachal Pradesh) 2 MT per day
(Unit -IV)

Total 33 MT per day

Steel Business Location Production

Capacity

Steel Unit-Vardhman Special Steels Ludhiana (Punjab) 100000 MT per

annum

Acrylic Business Location Production

Capacity

Fibre Manufacturing Unit-Vardhman Jhagaria (Gujarat) 18000 MT per

Acrylic Ltd. annum

35
 Manufacturing and Distribution Network

36
 GLOBAL ORIENTATION

Vardhman ventured in to the global market in 1986 with export value of one crore to reach an
outstanding 440 crores (92 million Dollar) in 2002.

Little wonder then, that Vardhman, today, exports 40% of yarn production to more than 25
countries and has a strong presence in markets like the EEC, USA, CANADA, CHINA,
JAPAN, KOREA, MEXICO, BRAZIL and MAURITIOUS. Vardhman has a share of more
than 6% in total Yarn exports from India.

Its trusted, tested and reliable workforce, coupled with the latest technology, quality
consciousness, customer oriented services and strong logistics has given Vardhman an edge
over its competitors and in the worlds most quality conscious and price sensitive markets,
thereby making Vardhman a truly international organization in terms of sourcing from and
catering to the world market.

GLOBAL INTERNATIONAL ALLIANCE

Product/Process Global Partners

Fabric Dyeing and Finishing Takai, Senko, Japan

Fibre and Yarn Dyeing Nihon Sanmo Dyeing Corporation

Ltd., Japan

37
 Gassed Mercerized Yarns Kyung Bang, South Korea

Sewing Thread American & Efrid Inc., USA

Acrylic Fibre Marubeni Corporation & Japan

Exlan, Japan

GLOBAL ALLIANCE

VARDHMAN TEXTILE LIMITED ENTERS INTO A LICENCING

AGREEMENT WITH AMERICAN & EFIRD INC., USA.

Vardhman Textile Limited of Ludhiana has entered into a strategic tie up with American &
Efird Inc. of USA, The Licencing Agreement Provides that Vardhman Textile Limited will
be able to use many of their Patents and Trade Marks for the manufacture and distribution of
sewing thread articles used in the up market for manufacturing hig valued ready-made
garments.

A&E has a very strong presence for the supply of sewing thread in American
Continent and has presence in emerging Asian Countries like China and Indian Sub-continent
38
whic are the major manufactures and suppliers of garments. They have already established
Joint Ventures in Mauritius and Sri Lanka besides their existing operations in China Hong
Kong, Singapore etc. for servicing far-eastern countries.

The Licencing arrangement therefore provides Vardhman Textile Limited with the
right to manufacture and market various products under their brand names and colour
numbers. The company shall be entitled to use A&E's Registered Trade Marks like D-
CORE, PERMA CORE, PERMA SPUN and A&E LOGO etc.

Vardhman Textile Limited has set up a brand new state of the art plant at Ludiana
with computer controlled dyeing machines. Hakoba winders and other sophisticated
equipment to manufacture this premium range of sewing threads in India. Vardhman Textile
Limited has also set up a special crack team for marketing these high performance threads at
all major garmenting centres.

Performance
During the last 5 years, Vardhman Group has recorded 10 percent top line growth rate, which
is higher than the industry average growth rate. The Group turnover has grown from Rs 723
crores in 1995 to Rs 3186.32 crores (about USD 700 million) in 2008-09. The exports has
grown from negligible level in early nineties to Rs 689 crores (USD 150 million) in 2008-09.

ACHIEVEMENTS

39
Back home, the Vardhman Group became India's first textile company to be awarded
ICO9002/ ISO 14002 Certification. It is the largest producer and exporter of yarns and Grey
woven fabrics from India. Vardhman is also the largest producer of tyre cord yarns and the
second largest producer of sewing threads in India. The Vardhman Group vision of
excellence is matched by a dedication and sincerity to be the best and excel in every industry
it has a presence.

 1989-90: State award for outstanding performance in exports.

 1990-91: Bronze trophy third largest mill yarn exporter.

 1991-92: Bronze trophy for third largest mill yarn exporter. Government of India
Award for outstanding export performance.

 1993-94: Gold trophy for largest merchant exporter of yarn. Golden trophy for
merchant of yarn to non-quota markets. Government of India award for outstanding
export performance.

 1994-95: Gold trophy for largest merchant exporter of yarn.

 1995-96: Outstanding export performance award.

 1996-97: Silver trophy for highest performance in exports.

 1997-98: Texprocil bronze trophy for third highest export in 100% EOU

 1998-99: Texprocil silver trophy for second highest exports in EOU.

 2002-03: Texprocil gold trophy for second highest exports in EOU.

Mr. Sachit Jain, Executive Director of Vardhman receiving Gold trophy for Exports of
cotton yarn 2003-2004, from Honourable Minister of Textiles Mr. Shankar Singh.

CORPORATE SOCIAL RESPONSIBILITY

• Sri Aurobindo Socio-Economic and Management Research Institute is engaged in the

promotion of education, research and publications highlighting social and economic
40
 issues facing the society. The Institute runs a Human Resource Development Centre for
providing career counseling and guidance to college students in Punjab. The teams of
experts also visit the colleges in the state to prepare college students for gainful
employment in the industry.
• Sprung from a keen desire to set up an educational institution in Ludhiana and inspired by
the writings of Sri Aurobindo and the Mother, the Trust has set up a college - Sri
Aurobindo College of Commerce and Management (affiliated to the Punjab University)
with the mission to create an institution with distinction dedicated to the ideals of creating
disciplined career oriented young people ready for going for administrative and
management roles in enterprises or to set up their own business as entrepreneurs.
• A Vardhman initiative to improve the yield of cotton in Punjab in 2001 when the State
had suffered a shock of crop devastation and area under cotton cultivation was dwindling,
led to the experiment to adopt villages and see whether concerted efforts in bringing
knowledge to farmers could improve the yield of cotton. The experiment was successful
as it improved the yield of cotton to 873 kg/hectare in 2005 in adopted villages where the
average yield of cotton in the State of Punjab was 587 kg/hectare (world average - 700
kg/hectare). It found mention in the President's broadcast on Technology Day (11/05/04)
as a 'technological event which has the potential to penetrate into our everyday lives'. The
Village Adoption Programme also found mention in the President's address to the nation
on the eve of India's 56th Republic day. The President of India was gracious to bless one
of the participating Villages -'Gehri Buttar' (District - Bathinda) by his presence on
December 10th 2005.
• Vardhman is actively engaged in the activities of Nimbua Greenfield Punjab Limited
(www.ngpl.co.in) formed by a consortium of Industries of Punjab for developing a
common facility for storage, treatment and disposal of hazardous wastes generated by the
Industry with a Government of India grant.

Chapter 3:

FINANCIAL ANALYSIS

41
In financial analysis, a ratio is used as a benchmark for evaluating the financial position and
performance of a firm. The absolute accounting figures reported in the financial statements
do not provide a meaningful understanding of the performance and financial position of a
firm. Ratios help to summarize large quantities of financial data and to make qualitative
judgments about the firm`s financial performance.

LIQUIDITY RATIOS
• Current ratio:
It is the measure of general liquidity of a company. It is most widely used to make the
analysis of short-term financial position. It represents marginal safety for creditors.

Current Ratio = Current Assets

Current Liabilities
Amount (Rs. Crore)

Year 2005-06 2006-07 2007-08 2008-09 2009-10

Current assets 1245 1398 1536 1612 2037

Current liabilities 421 499 561 524 598

Current ratio 2.95 2.8 2.74 3.08 3.41

Interpretation of current ratio: -

The thumb rule is 2:1. But here as we can see the current ratio is exceeding the thumb
rule which means that funds are blocked more in current assets cannot be used in
operations of the company. If we compare the balance sheets of current and previous
year then it can easily be said that the investment in inventories has been increased a
lot which has led to an increase in the current assets.

42
 • Quick Ratio:-
It is a more rigorous test of liquidity than the current ratio. Also known as acid test ratio or
liquid ratio establishes a relationship between liquid assets & current liabilities.

Quick Assets= Current Assets- (inventory + prepaid exp.)

(Amt. in Rs. Cr.)

Particulars 2005-06 2006-07 2007-08 2008-09 2009-10

Quick Assets 676.78 702.51 665.92 991.62 929

Current 421.58 498.98 560.78 523.70 598

Liab.

1.61 1.41 1.19 1.89 1.55

Quick Ratio

Interpretation:

The quick ratio of the company is started increasing to the extent that it exceeded the rule of
thumb of 1:1 in all five years, indicating that the company is highly liquid so as to fulfill C.L
well in time. But, from the analyses of B/S, we came to know that the major portion of quick
assets consists of sundry debtors. That is why there are chances of non realization of cash
from the company’s customers at the time of emergency.

• EFFICIENCY RATIOS

• Inventory Turnover Ratio:-

This ratio indicates the number of times the stock has been turned over in an accounting
period and evaluates the efficiency with which a firm is able to manage its inventory.
43
COGS = Raw Material consumed + Manufacturing Expenses + inc/dec. in Work in
Progress and Finished Goods + Difference of Excise duty on stocks

Conversion Period: It is the average time taken to clear the stocks.

It is calculated as:

Year 2005-06 2006-07 2007-08 2008-09 2009-10

COGS 1241 1858 1940 2453 2743

Average stock 548 632 783 745 864

Stock turnover ratio 2.27 3:1 2.5:1 3.2 3.17

Stock holding period (in 161 121 146 114 115

days)

Interpretation:

This ratio indicates how fast the stock is sold. Higher ratio is good from the point of view of
liquidity and moreover, higher ratio indicates the low conversion period which is a very
healthy sign for the company. On the contrary to it, here, the ratio is increasing

• Debtor’s Turnover Ratio:-

Debtor turnover ratio indicates the velocity of debt collection of the firm. There are mainly
two ratios to judge the quality of debtors, which are: -

44
Trade debtors= Sundry Debtors + Bills Receivables

Average Collection Period = Days in a year

Debtors Turnover ratio

This ratio represents the average number of days for which a firm has to wait before its
receivables are converted into cash.

(Amt. in Rs. Cr.)

Year 2005-06 2006-07 2007-08 2008-09 2009-10

Net credit sales 1889 2088 2295 2454 2743

Average debtors 215 237 264 275 336

Debtors turnover ratio 8.78 8.8 8.7 8.9 8.2

Debtors collection period (In days) 41.58 41 42 41 45

Interpretation of Debtors turnover:- Higher the debtors turnover ratio, better it is for the
company as higher ratio indicates less no. of days which means the company is able to collect
the dues from the debtors in minimum possible days and can use these funds in business. It’s
almost same in both years.

• Creditor Turnover Ratio:-

The creditor’s turnover ratio indicates the velocity with in which the creditors are turned over
in relation to purchase.

45
This ratio represents the average number of days taken by the firm to pay creditors.

(Amt. in Cr.)

Year 2005-06 2006-07 2007-08 2008-09 2009-10

Net credit purchases 816 1039 1232 1062 1755

Average creditors 45 80 100 74 57

Creditors turnover ratio 18.08 13 12 14 31

Creditors payment period 20.19 28 30 26 12

Interpretation of creditor’s turnover ratio:-

Lower the ratio, better it is for the company as low ratio leads to high no. of days which
means that the company is utilizing the funds fruitfully in business activities. On the contrary
to it, high ratio(less no. of days) is good from the reputation point of view. Here, in this case,
we see that the ratio was still better last year but it’s not good in current year so the company
needs to improve.

• PROFITABILITY RATIOS

• G.P Ratio:

46
This measures the relationship of gross profit to net sales and usually represented as
percentage.

x 100

Gross Profit= Net Sales – COGS

(Amt. in Rs. Cr.)

Particulars Actual Actual Actual Actual Actual

2005-06 2006-07 2007-08 2008-09 2009-10
G.P 638.09 648.01 660.17
617.71 557
Sales 2087.63 1889.16 2294.66
2453.64 2743
Ratio% 30.56% 34.30% 28.77%
27.42% 20.30%

Interpretation:-

A high ratio is a sign of good management as it implies that the cost of production of the firm
is low. It may also be indicative of a higher sales price without a corresponding increase in
COGS. A low gross margin is a danger signal. A firm should have a reasonable gross margin
to ensure adequate coverage for operating expenses of the firm and sufficient returns to the
owners of the business, which is reflected in the net profit margin. The above table shows that
our gross profit is good.

• N.P.Ratio:
It establishes a relationship between Net Profit (after tax) and Sales and indicated the
efficiency of the management in the manufacturing, selling, administrative and other
activities of the firm. It measures the overall profitability of the firm.

47
 Net Profit Margin = Earnings after tax x 100
Sales

Particulars Actual Actual Actual Actual Actual

2005-06 2006-07 2007-08 2008-09 2009-10
EAT 19631.62 17170.08 18426.17 20316.18 21376.3

Sales 208763 188916.20 229466.61 245364.5 274295.4

Ratio% 9.4% 9.08% 8.03% 8.28% 7.8%

Interpretation of net profit ratio:- This ratio indicates the management’s ability to operate
the business with sufficient success.

• Interest coverage ratio

This ratio measures the debt servicing capacity of the firm In so far as fixed interest
on long term is concerned

(Amt.in Rs. Cr.)

Particulars Actual Actual Actual Actual Actual

2005-06 2006-07 2007-08 2008-09 2009-10

48
EBIT 289 263 200
223 164

Interest charges 39 38 54 102 86

Interest coverage ratio 7.4 7 4.1 1.6 2.31

Interpretation:

Interest coverage ratio indicates the extent to which a fall in EBIT is tolerable in that the
ability of the firm to service its interest payments would not be adversely affected. The ratio
has significantly reduced over the years, in 2008-09, its just 1.6. this is because of the
expansion activities undertaken by the company in Budhni and satlapur, last year.

• Return on shareholders’ equity

This ratio measures the return on the owners (both preference and equity shareholders)
investment in the firm. It is calculated as follows:

Return on total shareholders’ equity= Net Profit After Taxes x 100

Total shareholders’ eq

(Amt. in Rs Cr.)

Particulars Actual Actual Actual Actual Actual

2005-06 2006-07 2007-08 2008-09 2009-10
EAT 196 172 123 141 213

49
Shareholders’ equity 962 1092 1172 1273
1456
Return on shareholders’ equity 20.4% 15.8% 10.4% 11% 14%

Interpretation:

Earning on shareholder’s equity expresses the profitability of a firm in relation to the

funds supplied by the owners. The owners were earning a fair 15% return in 2004-05,
which has reduced to 11% in 2008-09. The reason for such reduction has been the
increase in interest and financial charges because of setting up of new units.

• Operating profit ratio

It is the ratio of operating profit to net sales. Operating profit is the profit which arises out of
the operations carried out by the business. For calculating the operating profit, EBIT is taken
into consideration.

Operating profit ratio= EBIT

Net sale

(Amt. in Cr.)

Particulars Actual Actual Actual Actual Actual

2005-06 2006-07 2007-08 2008-09 2009-10
EBIT 289 263 200
223 164

Net sales 1889 2088 2295 2743

50
 2454

Operating 15% 13% 9.7% 7% 7.29%

profit ratio

Interpretation:

Operating profit ratio is the indication of management’s ability to operate the business with
sufficient success. This ratio expresses the cost price effectiveness of the operations. From
the table, it is clear that there is a burden on the profits of company due to increasing costs
and declining sales. However, the declining sales can be attributed to recession worldwide,
but the company must manage its costs effectively.

• Fixed Assets Ratio:-

Fixed Assets Ratio = Long term funds

Fixed assets
Long term funds = Equity+ Long term loan

= 5776.95+262079.79/222301.87

= 5776.95+262079.79
222301.87

= 1.2 times.

• Reserves To Capital Ratio

= Reserves
51
 Capital

= 139808.01

5776.95

= 24 times

• Capital Gearing Ratio

= Equity

Fixed cost bearing securities

= 5776.95

262079.79

= 0.022 times

Chapter 4:
SWOT ANALYSIS OF THE TRAINING UNIT

STRENGTHS
 Good technological base with Foreign Collaboration
 Own Research and Development department
 Zero Defect and optimum production with zero wastage
 High Quality Standards
52
  High Production Capacity

WEAKNESSES
 Comparatively high prices

OPPORTUNITIES
 As brand image is very good and production is too wide, Vardhman can have some
good customers with whom direct business can be established. With this Vardhman
will have better Quantity and Regularity of sales.
 Strict payments are strengths at times as well as weakness. If a moderate policy, as
per present conditions are adopted, the dealers and customers shall be attracted to buy
more and regularly.

THREATS
 Smaller players in the market are using Vardhman’s process as a shield to push their
product at lower prices.
 Companies from south are entering into Ludhiana market.

PART-B

Chapter I
Pg No

INTRODUCTION TO THE PROJECT 53 -58

• Overview of Fancy yarn

• Yarns in Vardhman

53
Chapter II
59 -67

REVIEW OF LITERATURE

Chapter III
68 -73

RESEARCH METHODOLOGY

• Need of study
• Objectives of Study
• Research Methodology
• Limitations of Study

Chapter IV
74 -91

DATA ANALYSIS AND DISCUSSUONS

Chapter V
92 -93

CONCLUSIONS

SUGGESTIONS

Chapter 1:
FANCY YARN
Fancy yarns are those produced with some deliberate discontinuity introduced either into the
colour or form of the article with the intention of producing an enhanced aesthetic
54
impression. Mostly Fancy yarns are manufactured by specialist spinners using machines
which are specially developed for this purpose; some are produced by spinners with normal
equipment using 'Fancy slivers' as minor components of yarns; still others are made
exclusively by filament yarns, using adaptations of the AIRJET TEXTURIZING process.

Fancy yarns are most invariable and complex in construction available in different colour
and structure. Manufacturing process make the yarn more expensive than a plain yarn. It is
very luxurious yarn and involves the noble fibers such as:

 ACRYLIC
 POLYSTER
 VISCOSE
 NYLON
 RAYON

Fancy yarn is a 100% risk item. When it is introduced in the market either it’s a big hit or a
big flop. The manufacturer or the dealer either generates high gains out of it or suffer big
losses.

Types of fancy yarns

Spun

 Rainbow
 surbhi
 merlin
 shimmer

Structured
 Feather
 Chennile

Various blends are processed in the department depending upon customer’s demand
in hand knitting and machine knitting yarn.

Some Blends of Fancy yarn are listed below:

• 100% acrylic
• Acrylic/Polyester
• Acrylic/Viscose
• Acrylic/Nylon
• Viscose/Nylon
• 100% cotton

55
Fancy Yarn in Vardhman is divided into two segments:

• Fancy Machine Knitting Yarn (F.M.K.Y)

• Fancy Hand Knitting Yarn

Fancy Machine knitting Yarns are used as hosiery yarns in making of circular knitted fabrics
and flat knitted fabrics used for apparels like sweaters, strolls, shawls, blankets, carpets, T-
shirts etc. Vardhman is the manufacturer of both, summer Fancy M.K.Y and winter Fancy
M.K.Y.

VARDHMAN YARN BUSINESS

 Largest spinning capacity in the country with 0.59 mln spindles.

 Turnover for the FY ended March 31, 2010: Rs. 2767.22 crores.

 Twelve production plants located in the states of Punjab, Himachal Pradesh and
Madhya Pradesh.

 Technical tie-ups with the world leaders from Switzerland, Germany, Japan and
Korea.

 The largest exporter of yarn from India. The total export share of the group is more
than 6% of total export of yarn from the country.

 It has a wide range of specialized grey, dyed, & a variety of blended yarns in cotton,
polyester, acrylic, lyocel, Lycra, silk, wool & Tencel

ABOUT THE YARN

56
Yarn is a kind of thread, from which various kinds of fabrics has been made and from fabrics
various end products has been made

Vardhman Yarn Range

 Grey Yarn: -

 Cotton Hosiery, Weaving, Open End & Tyre cord Yarn

 Acrylic Yarn (Bulk & Regular)

 Polyester Cotton Yarn

 Special Blended Yarns

(Cotton - Wool, Cotton - Acrylic, Cotton - Viscose, Polyester - Acrylic - Viscose,
Lycra - Blended)

 Compact Yarn

 Dyed cotton yarns: -

 Crayons (Package Dyed Cotton)

 Rainbow (100% Fibre Dyed Cotton Yarn)

 Rangoli (100% Cotton Melange Yarn)

 Gassed Mercerised Cotton Yarn)

 Dyed Blended and Synthetics yarn: -

 Paragon (Fibre Dyed Polyester Cotton Yarn)
 Harmony (Fibre Dyed Polyester Cotton Melange Yarn)
 Marina (Superior Tow Dyed Acrylic Bulked Yarn)
 Daffodil (Tow Dyed Acrylic Bulked Yarn)
 Yarn Dyed Acrylic
 Hand Knitting Yarn
 Specialty Yarns
 Hank Dyed Cotton Yarn
57
 PRODUCTS AND END USES

Products End Uses

Cotton Hosiery Yarn All kinds of knitted garments for kids, ladies,
gents-shirt, T-shirt, socks and lingerie’s

Woven Yarn Shirts & Trousers

Tyre Cord Yarn Manufacturing of Tyres

Acrylic Yarn Sweater & Shawls

Hand Knitting Yarn Knitting

Vardhman Major Export Destination

The major export destinations are as follows:

 USA
58
  EU

 Australia

 Canada

 China

 Egypt

 Mauritius

 Hong Kong

 Indonesia

 Israel

 Italy

 Japan

 Korea

 Malaysia

 Singapore

 U.K.

Prime Dealers of Fancy Yarns in the Market:

 Vardhman Trading co.(Ganga Acrowool)

 Arihant Trading Co.(Oswal woollen Mills)

59
  Hem Knitwear(Vardhman, Oswal, Malwa)

 N.K. oswal(Vardhman)

 J.K. Oswal(Vardhman)

 Arun Trading Co.(Ganga Acrowool)

 Oswal Enterprises(Yogendra, Sportking)

 King Traders(Vardhman)

 Bau Ram Deep Chand Jain(Oswal)

Prime Customers of Fancy Yarns

Vardhman Oswal Ganga

Usha India Usha India New Nalanda Hosiery

Sarjeevan Hosiery Sarjeevan Hosiery Jagjeet Knits

Kuldeep Oswal Kuldeep Oswal Asha Knita

K.L. jagdish New Nalanda Hosiery Laveena Hosiery

A.K. sahnan A.K. shaman A.K. shanan

Classic Fashions Handa Knitwears Satyam Knitwears

Creative Line Creative Line Ajanta Knitwears

First Line New Castle Hosiery Palta Hosiery

Rage Dikson Dikson

Chapter II

REVIEW OF LITERATURE

60
A literature review is a body of text that aims to review the critical points of current
knowledge on a particular topic. Literature reviews are secondary sources, and as such, do
not report any new or original experimental work. Its ultimate goal is to bring the reader up to
date with current literature on a topic and forms the basis for another goal, such as future
research that may be needed in the area. A good literature review is characterized by: a
logical flow of ideas; current and relevant references with consistent, appropriate referencing
style; proper use of terminology and an unbiased and comprehensive view of the previous
research on the topic.

• Steenburgh (2010) Studied that marketers frequently need to estimate the size of their
markets -- both for existing products so that sales forecasts can be developed, and for
new products so that market opportunities can be assessed. This toolkit enables
students to size a market and generate a sales forecast using a market build-up
methodology. Students learn to measure market demand and company demand and
calculate market and product penetration rates and market share. The note gives
students a foundation for analyzing marketing cases, as well as providing an
analytical structure and process for completing a marketing plan. The note is
accompanied by a free Excel worksheet (available only to authorized faculty) which
contains sample problems, pre-built Excel models to calculate market size, market
penetration, and market share, and charts and graphs which help visualize the results.

• Naik, Prasad and Sethi(2008) Companies spend hundreds of millions of dollars

annually on advertising to build and maintain awareness for their brands in
competitive markets. However, awareness formation models in the marketing
literature ignore the role of competition. Consequently, we lack both the empirical
knowledge and normative understanding of building brand awareness in dynamic
oligopoly markets. To address this gap, we propose an N-brand awareness formation
model, design an extended Kalman filter to estimate the proposed model using market
data for five car brands over time, and derive the optimal closed-loop Nash
equilibrium strategies for every brand. The empirical results furnish strong support for
the proposed model in terms of both goodness-of-fit in the estimation sample and
cross-validation in the out-of-sample data. In addition, the estimation method offers
managers a systematic way to estimate ad effectiveness and brands as well as
61
 competitors' brands. Finally, the normative analysis reveals an inverse allocation
principle that suggests - contrary to the proportional-to-sales or competitive parity
heuristics - that large (small) brand should invest in advertising proportionally less
(more) than small (large) brands.

• Green, Armstrong(2007) Competitor-oriented objectives, such as market-share

targets, are promoted by academics and are commonly used by firms. A 1996 review
of the evidence, summarized in this paper, found that competitor-oriented objectives
reduced profitability. We describe new evidence from 12 studies, one of which is
introduced in this paper. The new evidence supports the conclusion that competitor-
oriented objectives are harmful, especially when managers receive information about
competitors' market shares. The evidence appears to have had little effect on
managers' decisions and on what is taught in business schools.

• Rajagopal (September 2006) concluded that customer value in terms of satisfaction is

one of the indicators for building profit oriented strategies in a firm. The customer
value concepts may be applied by the firms to evaluate the product performance in the
given market and determine the approach for competitive advantage. The framework
for measuring the customer values discussed in this paper provides analytical
dimensions for establishing the long run customer relationship by the firm and to
optimize its profit levels. The model discussed in the paper analyzes how external
factors like a change in consumer interests and competitiveness affect the relationship
between customer satisfaction and profit in a firm. The model discussed in the paper
in relation to customer choice under difference value determinants offer more general
understanding of why consumers, although purchasing essentially similar products. In
order to gain returns on aggregate customer value, firm needs to estimate the
profitability associated thereof in terms of product attractiveness, volume of buying
and market share thereof. One of the major challenges for the marketing manager of
the firm is to incorporate the preferences of the customer into the design of new
product and services to maximize the customer value.

62
 • Salvinija Petrulyte (2006) The fancy effects formation using one process and holl
spindles has been studied. A composite design has been formulated and three
variables, namely delivery speed of fancy yarn, rotational speed of hollow spindle and
supply speed of effect component, considered to understand how technological
parameters influence the formation of fancy effects, like closed loop, opened loop,
loop-knot, plain knot and knot made from various loops, and their combinations.
Procedure of counting the effects per unit length using twist tester and
stereomicroscope for precise establishment of fancy effect is also accomplished. It is
observed that the technological parameters contribute significantly to structural
effects formation. On the basis of graphical pictures of the mathematical model that
express the relationship between the number of effects of plain knot-knot made of
various loops per unit length of fancy yarn and all the parameters of technological
process of production, the particular interrelations have been investigated and the
received model could be used to predict the number of fancy effects of certain nature,
to control the effect formation process, and to enlarge the base of information needful
for yarn design.

• Ghosh(2004) This study examines the relative importance of market share in

acquisitions because anecdotal evidence and economic theory suggest that merging
firms benefit from larger market share. Firms might focus on market share to improve
shareholder value through improved efficiency, which benefits consumers.
Alternatively, higher market share could generate greater market power, which
adversely affects consumers. I find that market share of merging firms increases by
more than 30%, relative to the pre-acquisition level, and the increase is even larger
after I account for industry changes. Abnormal returns are positively correlated with
changes in market share around acquisitions, but not with changes in industry
concentration, which suggests stock market's expectation of future benefits from
efficiency rather than market power. More directly, I find that merging firms' long-run
profitability increases with market share, and the increase in profitability primarily
results from better asset management.

• Palmer(2004) has stated that marketing is not a scientific theory, but merely a
conceptual framework that identifies the principal decision making managers make in

63
 configuring their offerings to suit consumers’ needs. The tools can be used to develop
both long-term strategies and short-term tactical programmes.

• P Yadav (2003) concluded that the proportion of sheath content and thermal treatment
under the relaxed condition on thermal shrinkage, sheath-slipping resistance and
tensile properties of DREF-III friction-Fancy yarns made of polyester multifilament
core and cotton sheath has been studied both in dry and wet state. It is observed that
the thermal treatment markedly increases the thermal shrinkage and sheath-slipping
resistance. The sheath-slipping resistance of wet treated yarns is found to be higher
than that of dry treated yarns. Breaking elongation increases with the increase in
treatment temperature. The increase in proportion of sheath fibre content decreases
the thermal shrinkage and increases the sheath-slipping resistance and breaking
strength

• Horovitz (2002) suggests the use of viral marketing to encourage the rapid spread of
word-of-mouth.He maintains that the young 'generation Y' market cannot be reached
through traditional promotions and suggests that word-of-mouth or ‘buzz’ type
promotions is being used by successful marketers in this rapidly changing and
turbulent segment. Clearly word-of-mouth is an important promotional tactic, but it
does not happen by itself – it must be organised systematically by identifying
influential individuals, winning their support and providing information to enable
them to spread the word.

• Nicholas O’Regan(2002) Market share is often used to describe the position and
success of a firm in an industrial sector. While the impact of market share is not
always reflected in a firm’s profitability or performance, many firms see it as an
important organisational goal. Accordingly, it could be argued that market share
influences the organisational thinking and strategic planning of small- to medium-
sized enterprises. However, it is unclear how and to what extent? The analysis
indicates that firms with an increased market share differ significantly from firms with
a decreased or static market share on the emphasis given to a number of
environmental factors. The analysis shows that firms with increased market share are
64
 likely to have higher performance and in particular achieve enhanced financial
performance, greater customer retention and customer satisfaction. This applies to all
firm sizes. To ensure competitive advantage, firms need to consider market share in
conjunction with overall profits.

• Kaunas,(2002) concluded that . The investigated complex structure fancy yarns have a
multithread structure composed of four components – one core, two effect, and one
binder yarn. Due to the wrapping round the effect intermediate product that mostly
has larger linear density the length of the binder component changes. In current
research the precondition was accepted that the cross-sections of the all three yarns of
the effect intermediate product in the complex structure fancy yarn remain the circles
shaped, and this shape does not change while manufacturing the fancy yarn. The
theoretical method for predicting the coil length of the binder yarn in the complex
structure fancy yarn is developed.

• Hans Franses, Paap(2001) Market share attraction models are useful tools for
analyzing competitive structures. The models can be used to infer cross-effects of
marketing-mix variables, but also the own effects can be adequately estimated while
conditioning on competitive reactions. Important features of attraction models are that
they incorporate that market shares sum to unity and that the market shares of
individual brands are in between 0 and 1. Next to analyzing competitive structures,
attraction models are also often considered for forecasting market shares. The
econometric analysis of the market share attraction model has not received much
attention. Topics as specification, diagnostics, estimation and forecasting have not
been thoroughly discussed in the academic marketing literature.

• Beckwith (2001) concluded that Marketing services in a changing world requires

focusing on increasing the customer satisfaction and rejecting old product paradigms
and marketing fallacies

65
 • Mohr, (2001) while explaining word-of-mouth, stresses that it has a very strong non-
linear effect and is impossible to control. However, since the principle of sensitive
dependence on initial conditions is at work, a small investment in encouraging
customers to talk about a product or service can produce a significant effect. It is more
relevant in turbulent, high technology markets because high technology products are
not able to build brand image over years or decades because they have short product
life cycles. Therefore, the quick spread of word-of-mouth is important.

• Ishtiaque (2000) the accuracy of the prevailing geometrical models of the plain weft
knitted fabrics is estimated and a more precise model for the use in computational
modelling produced. The new proposed model is based on the assumptions of the
ideal elastic yarn and the elastic energy minimization of the yarns composing the
relaxed fabrics. Thus, a repeated calculation process is used for the selection of the
loop shape corresponding to the minimum loop length. The accuracy of the models is
evaluated using the loop length as criterion. Based on the structural data of an
extended set of samples, the loop length for every model is calculated. These values
are compared to the respective experimentally measured ones. The accuracy of the
new proposed model guarantees the success of the mechanical simulation of the
knitted fabrics

• Singh (2000) studied that Indian yarn industry is booming rapidly and came at
number 2 by following change in textile production. He pointed out the reasons for
booming.

• Savvides (February 2000) The paper highlights the need for a methodological
framework on which to base projections in project appraisal applications. Following
an initial definition and sizing of the relevant market of the project, the market is
analysed in terms of which are the main customer groups, what their needs are, and
how well existing suppliers serve these needs. The process should identify market
performance gaps against which the project can position itself and develop relevant
market competencies so that it can be assessed to be capable of out-performing
competitors in meeting market expectations in a sustainable manner. This should be
66
 the essence of any project appraisal. The analyst should seek to find those elements of
competitiveness that are likely to make the project a successful enterprise in its
market. The quantification part of this exercise should lead to the modelling and
compilation of the cash flow projections. The projected numbers should be a
reflection of the competitive analysis.

• Oxenham(1999) concluded that fancy" yarns were produced using a range of spinning
speeds on a hollow spindle machine. The yarns were assessed for different
characteristics using both subjective and objective tests, and the results obtained with
the different techniques show good agreement. Clearly, there is a progressive change
in the characteristics of the yarns with increasing production speed, which may be due
to the increasing forces exerted on the staple component of the yarn.

• Thomke & Reinertsen, (1998) have concluded that introducing a totally new product
is one way of introducing chaos into a market, i.e. destabilising an existing market.
For such an approach to be successful, a longer-term view is necessary, but the
company must also be prepared to act innovatively in the short term to take advantage
of unanticipated and unpredictable opportunities. This means short lead times, fast
feedback loops and flexible development processes. This involves product
development systems that can make late design changes to better meet customers
needs and that can avoid design changes entirely because design specifications and
commitments can be made very late in the process.

• Kapoor (1998) described in his article that why Indian textile industry face so many
changes within a short span of time. He describes the lack of technological product
and dependce on climate for production of yarn and electricity are the main causes
for the immediate change.

• Rao(1997) in his study the focus was on the global competitors of yarn of India. He
find that with huga production of yarn and technological advancement china is the
largest producer and exporter of the yarns and assumed to be the world jaint of yarn
producer in coming 50 years.

67
 • Hong Liu (1995) Examines differences in the level of market orientation between
firms of different sizes and relates market orientation to the perceived market
structure and the degree of planning control from corporate headquarters. A survey of
UK firms shows that medium-sized firms adopt a market orientation to a lesser extent
than large and extra-large firms; and there are no differences in the level of market
orientation between large and extra large firms. Despite the different market
orientation, there is no difference in the perceived market structure between firms of
different sizes. Extra-large firms are exposed to a higher degree of planning from the
corporate headquarters than medium-sized and large firms, but the degree does not
seem to be so high as to affect their market orientation and discusses managerial
implications.

• Robert,(1989) concluded that country can be profitably industrialize only if its

domestic market is large enough. In such a country for increasing returns technologies
to break even, sales must be high enough to cover fixed set up costs. We suggest to
conditions conductive to industrialization.

• Hartung, Fisher(1965) Management Science, Vol. 11, No. 10

McKinsey and Company, Inc., London -In a number of industries, product is sold
through individual outlets under control of a company through lease or franchise. If
these individual outlets are independent, in that sales in one have no influence on
another, then the decision to add or subtract an outlet in a marketing area rests solely
on investment and cost considerations. If, on the other hand, one outlet has an
influence on another in terms of sales, then the decision to expand must take this
influence into account. This paper suggests a method for planning expansion
systematically and consistently when this influence, which is called market share, is
present. The approach taken is that of mathematical programming where the objective
function is nonlinear. The solution suggested here is one of iteration which has
worked well for problems studied by the authors. A theoretical model, based on brand

68
 switching, is validated by experimental evidence and these results are then employed
in the development of a long-term planning model.

• Franz-Rudolf Esch, Langner, Schmitt and Geus

Purpose – The purpose of this paper is to develop a comprehensive model that

combines brand knowledge and brand relationship perspectives on brands and shows
how knowledge and relationships affect current and future purchases.

Design/methodology/approach – The paper uses structural equation modeling to test

the significance of the overall model and the specified paths.
Findings – It is found that current purchases are affected by brand image mostly
directly and by brand awareness mostly indirectly. In contrast, future purchases are
not affected by either dimension of brand knowledge directly; rather, brand
knowledge affects future purchases via a brand relationship path that includes brand
satisfaction, brand trust, and attachment to the brand. Thus, brand knowledge alone is
not sufficient for building strong brands in the long term; brand relationship factors
must be considered as well.
Research implications/limitations – The present study did not examine feedback
effects and included consumer categories only and no individual-differences
variables. It is recommended that future research examine feedback effects and
include additional consumer categories, B2B categories and individual-differences
variables such as variety seeking and innovativeness.
Practical implications – Brand managers spend considerable resources on measuring
brand awareness and brand image. It is recommended that practitioners also use brand
relationship measures and develop strategic and tactical initiatives that ensure that
consumers are satisfied with the brand, trust it and feel attached to it.

69
 Originality/value – The paper is a cross-paradigm paper: it is the first that combines
the two separate broad-based perspectives on brands into a simple comprehensive
model for researchers and brand managers.

Chapter 3:

Research Methodology

NEED OF THE STUDY

Vardhman’s fancy yarn is one of the biggest players in the field. The purpose of this
dissertation was to do a research about market size; to know about competitors of fancy yarn
in the market. Every year new types of Fancy yarns are introduced which also affect the
market size. By doing this research and analyzing the expected future trend as per the
customer’s viewpoint, Vardhman can focus on the adequate supply of the most demanded
products and introduce more varieties accordingly. After survey company can judge the
present scenario and take a corrective decision to increase the market share

OBJECTIVES:-
The objectives of a research are a way to find out answers of questions by applying
systematic and scientific way. Objectives are the path routes through which the title will be
achieved. So objectives should always be in accordance with the title and they should
conform to the direction towards which the title is aimed.

Objectives which I finally chose for my study are:

1. To measure the market size of fancy yarns in Ludhiana

a) Dealer survey
2. To know the competitors of fancy yarns in the market.
3. To know the supplier wise product range of fancy yarns.
4. The future trends of fancy yarns.
a) Customer survey
70
RESEARCH:-
The study of research method provides you with the knowledge and skills you need to solve
the problem and meet the challenges of the fast- based decision. Marketing environment we
define Business Research as a systematic inquiry whose objective is to provide information to
solve managerial problem.
It seeks to find explanation to unexplored phenomena to clarify the doubtful facts and to
correct the misconceived facts.

RESEARCH DESIGN:-

DESCRIPTIVE
Descriptive study is a fact- finding investigation with adequate interpretation. It is the
simplest type of research. It is more specific than an explanatory study, as it has focus on
particular aspect of the problem studied. It is designed to get the descriptive information and
provide information for formulating more sophisticated studies. Data are collected by using
one or more appropriate method, observation, interviewing and mail questionnaire.

TITLE:-

A STUDY THE MARKET SIZE OF FANCY YARNS AND ITS FUTURE TRENDS

TYPE OF DATA USED:-

There are basically two types of Data
 Primary Data
 Secondary Data

PRIMARY DATA:-

Primary Data is first hand information that the researcher collects. It helps in collecting useful
and most accurate information that is needed for the researcher to do his research.
Sources of Primary Data:-

 Schedules
SECONDARY DATA:-

71
Secondary data is what the researcher collects from different sources. It also help researcher
to get elaborate information to do his research.
Sources of secondary data:-

 Internet
 Journals

TOOLS FOR DATA COLLECTION:-

The Various method of Data gathering involves the use of appropriate recording forms. These
are called tools or instrument of data collection.

Secondary Participation:-
Data collection tools involving secondary participation require no direct contact to gather
information. Examples of secondary data collection tools would include:

 Telephone

In-Personnel Observations:-
Data collection tools used in personal contact observations are used when there is face to face
contact with the participants. Some examples of this type of data collection tool would
include:
 In-person surveys – used to gain general answers to basic questions
 Interviews – used to gain more in depth answers to complex questions

In my research used both In- Person and Secondary data collection have been used.

Some of the questionnaires were filled by personal interaction, some by e-mail , postal mail
and on Telephone

SAMPLING DESIGN:-

A sample design is a definite plan for obtaining a sample from a given population. It refers to
the technique or procedure the researcher would adopt in selecting items for the sample.

Sample design may as well lay down the items to be included in the sample i.e., the size of
the sample. Sample design is designed before data are collected. There are many sample
72
designs from which a researcher can choose. Some design is relatively more precise and
easier to apply than others.

POPULATION:-
The population for this study is all Dealers and customers of Fancy Yarn in Ludhiana

SAMPLING UNIT:-
Sampling unit refers to smallest possible individual eligible respondent. In this study the
sampling unit is the individual Fancy yarn dealer and customer.

SAMPLING SIZE:-
This refers to the total number of respondents selected from the universe to constitute a
sample. The size of the sample should neither be excessively large, nor too small. It should be
optimum. An optimum sample is one which fulfills the requirement of efficiency,
representative ness, reliability and flexibility. The sample size for this research is 70.

SAMPLING:-
The Basic idea of sampling is that by selecting some of the element in a population in order
to get first hand information of study.
There are two type of sampling probability Sampling & Non probability sampling.

PROBABILITY SAMPLING:-

Probability sampling is most commonly associated with survey based research where you
need to make inferences from your sample about a population to answer your research
questions or to meet your objectives. The process of probability sampling can be divided into
four stages:
 Identify a
suitable frame based on your research question or objectives
 Decide on a
suitable sample size
 Select the
most appropriate sampling technique and select the sample
 Check that
the sample is representative of the population
The objective of probability sampling depends on the research question & on the objective

73
NON PROBABILITY SAMPLING:-

The difference between non-probability and probability sampling is that non-probability

sampling does not involve RANDOM selection and probability sampling does. We can
divide non-probability sampling methods into two broad types: ACCIDENTAL or
PURPOSIVE.

PURPOSIVE:-

Purposive sampling starts with a purpose in mind and the sample is thus selected to include
people of interest and exclude those who do not suit the purpose.

This method is popular with newspapers and magazines which want to make a particular
point. This is also true for marketing researchers who are seeking support for their product.
They typically start with people in the street, first approaching only 'likely suspects' and then
starting with questions that reject people who do not suit.

Purposive sampling is non-probability and hence can be subject to bias and error

CONVENIENCE:-

Convenience or haphazard sampling involve selection haphazardly those cases that are
easiest to obtain for your sample, Such as the person interviewed at random in a shopping
center for the interview programmed. The sample selection process is continued until your
required sample size has been reached. Although this techniques of sampling is widely used it
is prone to bias and influence that are beyond your control.

In the survey CONVENIENCE SAMLING was used.

DATA ANYLSIS & INTERPRETATION TECHNIQUES:-

For analysing the various questionnaires, master table will be constructed by filling in the raw
data and from this table the results will be carried out. The tools include percentages, charts
and other statistical tools

Percentage Analysis is used for making comparison between two or more series of data.

Percentage (%) = No. of respondents * 100 / Total No. of respondents.

74
 LIMITATIONS OF STUDY

• The research done is in a limited area only. The study represents Ludhiana market
situation only.

• The individuals being observed might behave in a different way when they know they
are being observed and thus data collected may not be a true picture of the actual self.

• Generally, respondents were busy in their work and were not interested in responding
correctly.

• Respondents were reluctant to disclose complete and correct information about

themselves and their organizations. Many respondents were able to give only an
approximate idea about the purchase quantity of Fancy yarn.

• The Fancy yarn market was too vast so it was not possible to cover each and every
customer in the available short period. Only 50 respondents have been contacted due
to time constraint.

75
• While every effort was made to get the questionnaire filled personally, even then
some elements of biasness might have crept in. Some respondents themselves were not
clear about their likings and choices.

Chapter IV

Data Analysis and Interpretation

Table 4.1 Source of procurement of fancy yarn.

Supplier Number of Percenta

s Responses ge
Single 9 45
Multiple 11 55
Total 20 100

Figure 4.1 pie chart showing source of procurement

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Analysis:From the figure it can be analyzed that out of 20 dealers, 11 procure from multiple
suppliers where as 9 procure from single supplier.

Interpretation:It can be interpretated from analysis that majority of dealers purchase fancy
yarn from more than one company because of price difference.

Table 4.1(a) Dealers dealing with single suppliers

Vardhman OWM Malwa ganga

RK
Knitwear
s 48
NK
Oswal 400
Oswal
Enterpris
es 110
RK
Oswal 100
Bau Ram
Deep
Chand
Jain 300
siddh
trading
co. 100
SR
Oswal 60
Arihant
trading
co. 380
Vardhma
n
Trading
Co. 250
Total 608 780 110 250
77
 Percenta
ge 35 45 6 14

Figure 4.1(a )Column Graph showing market share of different companies with single
supplier

Analysis: From above figure it can analyzed that owm (45%) has major share, followed by
vardhman(35%) while rest(20%) by ganga and malwa.

Interpretation: It can be interpretated that owm has less number of dealers but supply
major amount due to less prices as compared to vardhman which has more number of dealers
due to good quality.

Table 4.2Dealers dealing with multiple suppliers

Vardhman OWM Malwa Ganga Others

J.K.
Oswal 100 20
Hem
Kitwears 370 500 60 20
King
Traders 80 330
S.S.
Trading
Compan
y 40 70 120
Shri
Vallabh 10 45

78
 K.K.
Mogla 10 100 20
Minar 25 175 15
Pratham
Yarn 60 40 200
Arun
Trading
Co. 170 30
Ganpati
Trading
Co. 10 40
Siddhart
ha
Trading
Co. 10 15
Total 610 580 300 385 810
Percenta
ge 23 22 11 14 30

Figure 4.2 Pie chart showing dealers dealing with multiple suppliers

Analysis: It can be analyzed that fancy yarn purchased by multiple suppliers from
others(30%),followed by vardhman and owm(23 & 22%) where as rest by malwa and ganga

Interpretation: It can be interpretated that majority of suppliers consume fancy yarns from
other companies ie. Anshupati, supreme, yogindra. Due to low prices as compared to
vardhman and owm.

Table 4.3 showing segment consuming fancy yarn

Segme Number of Percenta

nt Responses ge
Hosier
y 18 90

79
 Textile 0 0
Both 2 10
Total 20 100

Figure 4.3 pie chart showing segment consuming fancy yarn

Analysis: It can be analyzed that majority of the fancy yarn is consumed by hosiery 90%
where as only 10% by both.

Interpretation: It can be interpretated that fancy yarn is more used in hosiery for
manufacturing cardigans as compare to textile .

Table 4.3(a) segments covered by fancy yarn.

Segment Number of Responses Percentage

Only
Kids
Wear 4 22
Only
Women
Wear 12 67
Only
Men
Wear 2 11
Total 18 100

80
Figure 4.3 (a)Pie chart showing segments covered by hosiery

Analysis: It can be analyzed that majority of fancy yarn used for manufacturing only women
wear 67% , 22% by only men wear and rest by only kids wear.

Interpretation: It can be interpretated majority of fancy yarn is used in women wear because
of increase in demand and changing trends

Table 4.4 Annual purchase of fancy yarn

Quantity
(in tons) Number of Responses Percentage
0-50 3 15
50-100 4 20
100-150 3 15
150-200 2 10
More Than
200 8 40
Total 20 100

81
Figure 4.4 Pie chart showing annual purchase of fancy yarn.

Analysis: It can be analyzed that dealers purchase fancy yarn more than 200 tons are 40%
,where as 100-200 tons only by 25%, and 0-100 tons by 35%.

Interpretation It can be interpretated that dealers purchase fancy yarn in large quantity are
more. Dealers purchase fancy yarn between 50-100 and more than 200 are more because
fancy yarn life is short and it fluctuate.

Table 4.5(a) Different fancy yarns supplied by different companies

Products Vardhman OWM Malwa Ganga Others Total

Rainbow 472 740 215 195 45 1667
Surbhi 381 370 165 300 315 1531
Merlin 188 80 85 353
Others 177 170 30 140 365 882
Total 1218 1360 410 635 810 4433

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Figure 4.5 pie chart showing different fancy yarn supplied by different companies

Analysis: It can be analyzed that rainbow 38% supplied in major amount followed by surbhi
34% and rest by merlin and others.

Interpretation It can be interpretated that rainbow & surbhi covers major share of fancy yarn
supplied by different companies due to more in demand and changing trends.

Table 4.5(b) market share of different companies.

Supplier
s Market Share Percentage
Vardhm
an 1218 27
OWM 1360 31
Malwa 410 9
Ganga 635 14
Others 882 20
Total 4433 100

83
Figure 4.5 (b) Pie chart showing market share of different companies

Analysis: It can be analyzed that owm has major share 30% followed by vardhman 27%
followed by others 20% while rest is by malwa and ganga.

Interpretation It can be interpretated that due to less prices and good quality owm has major
share as compared to vardhma which has high quality and high prices.People are willing to
buy from vardhman but due to high prices people choose other companies.

Table 4.6 attributes in order of preference

5- most imp-----1- less imp

Rating
Attributes 1 2 3 4 5 s
Quality 0 0 0 9 11 4.5
Price 0 0 0 11 9 4.4
Service 1 6 13 0 0 2.6
Credit 13 3 4 0 0 1.5
Allowances 7 10 3 0 0 1.8

84
Figure 4.6 Column graphs showing different attributes

Analysis: It can be analyzed that quality rated more 4.5 followed by price 4.4, service 2.6,
and allowances 1.8 where at least rating is given to credit.

Interpretation it can be intrepretated that quality is given more priority, followed by price,
service, allowances while least priority is given to credit as people give more preference to
quality instead of high prices because people think price does not matter if the quality is
good.

Table 4.7(a) Performance of different companies in terms of quality

Supplier Number of Percenta

s Responses ge
Vardhm
an 10 50
OWM 2 10
Malwa 3 15
Others 6 30
Total 20 100

85
Figure 4.7(a) pie chart showing performance of different companies

Analysis: it can be analyzed that 48% people believe that Vardhman quality is best, followed
by others 29%,followed by Malwa 14% where as only 9% by Owm.

Interpretation: It can be interpretated that people believe that vardhman quality is the best
because they use international technologies in manufacturing of fancy yarn as compared to
other companies.

Table 4.7(b) Performance of different companies in terms of Reasonable price

Supplier Number of Percenta

s Responses ge
Vardhm
an 4 20
OWM 8 40
Malwa 3 15
Others 5 25
Total 20 100

86
Figure 4.7(b) pie chart showing performance of different companies

Analysis: It can be analyzed that 40% of people believe that owm has reasonable price
followed by vardhman 20% and rest by malwa, and other comapnies

Interpretation It can be interpretated that price of Owm and other suppliers has reasonable
as compared to vardhman.so, thts why Owm has large market share.

Table 4.7(c) Performance of different companies in terms of better services

Supplier Number of Percenta

s Responses ge
Vardhm
an 6 30
OWM 4 20
Malwa 3 15
Others 7 35
Total 20 100

87
Figure 4.7(c) pie chart showing performance of different companies

Analysis: It can be analyzed that 35 % of people believe that (anshupati, venus, yogindra)
provide them better services as compared to vardhman and Owm from which 50 % of people
are satisfied.

Interpretation It can be interpretated that yogindra, venus and other companies provide
better services like speedy delivery, after sales service as compared to vardhman and Owm
which covered major Market.

Table 4.7(d) Performance of different companies in terms of New development

Supplier Number of Percenta

s Responses ge
Vardhm
an 9 45
OWM 4 20
Malwa 3 15
Others 4 20
Total 20 100

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Figure 4.7(d) pie chart showing performance of different companies

Analysis: It can be analyzed that 45 % dealers are satisfied from vardhman where as 20%
from Owm and other companies like yogindra, venus.

Interpretation It can be interpretated that vardhman is doing more new developments related
to fancy yarn as compared with other suppliers. Dealers are more satisfied from vardhman as
compared to Owm and other suppliers.

Table 4.8 Most saleable brands in yarns.

Number of Percenta
Brands Responses ge
Rainbo
w 10 50
Surbhi 7 35
Merlin 3 15
Others 0 0
Total 20 100

Figure 4.8 pie chart showing most saleable brands of fancy yarn
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Analysis: it can be analyzed that rainbow 50 % is most saleable brand followed by surbhi
35% where as merlin is lest saleable brand 15%

Interpretation it can be interpretated that rainbow and surbhi is more in demand because it is
more used more in manufacturing due to changing trends and its quality.

Table 4.9 Years from which consumer consume fancy yarn

Number of Percenta
Years Responses ge
Less
than 5 6 12
5-10
years 9 18
More
than
10 35 70
Total 50 100

Figure 4.9 Pie chart showing years from which consumer consume fancy yarn

Analysis: it can be analyzed that majority of people are consuming fancy yarn from more
than 10 years,followed by 5-10 yearswhere as only 12% from less than 5 years.

Interpretation It can be interpratated that majority of consumer are working from more than
10 years due to more demand for manufacturing of cardigans,sweaters,shawls etc.various
new people have started working in this field due to increasing demand.

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Table 4.10 Source of procurement

Number of Percenta
Dealers Responses ge
Single 10 20
Multiple 40 80
Total 50 100

Figure 4.10 Pie chart showing source of procurment

Analysis: it can be analyzed that 80% of consumers purchase fancy yarn from multiple
dealers where as only 20% from single.

Interpretation it can be interpretated that due to price difference,cash discount and speedy
delivery majority of consumers purchase from multiple dealers.

Table 4.11 Demand criteria of previous 3 years

Number of Percenta
Demand Responses ge
Increasing 35 70
Decreasing 5 10
Remain
same 6 12
Fluctuate 4 8
Total 50 100

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Figure 4.11 Pie chart show demand criteria of fancy yarn

Analysis: It can be analyzed that 70% of consumer believe that demand is increasing,12%
remain same,10% believe decreased where as only 8% fluctuate.

Interpretation it can be interpretated that majority of people believe that fancy yarn demand
from last 3 years has been increased because it is widely used in hosiery for manufacturing
different thing.

Table 4.12 Future demand of fancy yarn

Number of Percenta
Demand Responses ge
Increase 37 74
Decrease 8 16
Remain
same 3 6
Can't say 2 4
Total 50 100

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Figure 4.12 Pie chart showing future demand of fancy yarn

Analysis: It can be analyzed that 74% people saying that future demand of fancy yarn will
increase,16% believe decrease where as 10 % did’nt respond.

Interpretation It can be interpretated that demand will increase due to increasing population
and increasing demand of people and introduction of new varieties.

Table 4.13 Vardhman future demand

Number of Percenta
Demand Responses ge
Yes 32 64
No 18 36
Total 50 100

Figure 4.13 Pie chart showing vardhman future demand

Analysis: It can be analyzed that 64% of consumer are willing to use vardhman fancy yarn
where as only 36% refuses.

Interpretation It can be interpretated that due to good quality and introduction of new brands
people are willing to buy fancy yarn from vardhman where as 36% refuses due to high prices,
late delivery, fast payment, less credit period.

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 Future Trends

When asked from the dealers and customers about their perceived future trends in the Fancy
yarn market, the following observations can be recorded.

• From past few years demand for Fancy yarn is increasing.

• In coming years demand for fine counts Fancy yarns is expected to rise .

• Owing to the increasing demand, the gap between the demand and supply of Fancy
yarns needs to be narrowed which will be a big sucees for vardhman in fancy market.

• According to changing fashion trends, the life span of Fancy yarn is very short of
about a maximum of 5 years which demands modifications in the varieties of spun
Fancy yarns.

• Consumers want to buy fancy yarn from vardhman but due to high prices they are not
willing to buy from vardhman.

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 Chapter V

CONCLUSION

Market of Fancy yarns:

• The market of Fancy yarns in Ludhiana is about 4433 tons/annum with OWM with
the largest share of 31%.

• In this segment, Vardhman`s share is about 23%.

• The small and medium players enjoy 20% of the market.

• The major competitors of Vardhman are OWM, Malwa, Ganga and Supreme.

• The small manufacturers of Fancy yarns include Anshupati, Nagesh, Arihant,

Sharman Oswal etc.

Recent trends in Fancy Yarns

• There is a significant gap in the supply and the demand of Fancy yarns from
Vardhman.

• Rainbow, product of Vardhman is the best yarn in its category.

• Demand for Fancy yarns has been increasing consistently in recent years.

• Consumers want to buy fancy yarn from vardhman but due to high prices they are not
willing to buy from vardhman.

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 Recommendations

 The delay in the delivery of the Fancy yarns is the major problem for many
respondents, so Vardhman should take appropriate measures in this direction to
ensure speedy delivery.

 There are Basically two things to be considered in the Garment Industry i.e. Fashion
and the style, so keeping both these in mind, Vardhman should keep regular contact
with dealers to have the ‘point of sale data’ to know their changing requirements.

 Majority of the respondents were of the opinion that Vardhman’s prices of Fancy
yarns were higher as compared to its competitors. Although it is justified to keep
competitive prices because of the quality leadership that it enjoys, but at the same
time they can be reduced to some extent.

BIBLIOGRAPHY
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 • Möller, K. (2006). The Market size: Towards the 21st Century Marketing.

• Palmer, A. (2004). Introduction to Textile - Theory and Practice, UK: Oxford

University Press.

• Graham R M (2002). Fancy Yarns: Manufacture and Applications.

• Horovitz B. 2002. Gen Y: A tough crowd to sell. USA Today.

• Gong R H & Wright R M (2002). Woodhead textiles

• Hollick L (2001). Fundamentals of yarn. UK: University of leeds.

• Lawrence, CA, Corbitt, B, Fisher, J.A, Lawrence, J. & Tidwell, A. (2000). Advances
in yarn spinning technology (2nd ed.). John Wiley & Sons Australia Ltd, 79.

• Klein w.1998. The Techonlogy of Short Staple Spinning.

• Mosley-Matchett, J. D. (1997). Include the Internet in Market size. Marketing News,

31(25)

• Klein w.1994. Man made fibresand their processing textile Terms and
Definantions(10nth ed.)

• Constantinides. Journal of Marketing Management, 22(3), 439-450.

References
97
www.textileindia.in

www.wikipedia.com
www.fancyyarns.net

http://www.articlesnatch.com/Article/Overview-Of-Indian-Textile-Industry/866789

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 Annexure

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