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„c Textile sector are the fastest growing sector In the developed countries. The Key demand
drivers are the growth in GDP and the growth in infrastructure and overall quality of living.

„c arns for hand knitting and industrial yarns are produced by textile mills. These are distributed
to retailers and wholesalers, both local and abroad.

„c Textile mills are buildings where fibers are interlaced together to produce fabrics. Cotton, wool,
synthetic blend and wool blend yarns are also produced here.

„c xut before being marketed, the yarns are tested for quality as part of the textile mill͛s research
and enhancement projects. The mill needs test knitters to ensure good quality yarns, pattern
writers to produce patterns for fabrics that can be used in clothing and furnishings, and
designers who are responsible in pattern graphing and coming up with unique designs.

„c ½nd to give clients a complete supplier package, textile mills include technical support for the
client͛s convenience.

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„c Infrastructure inputs- Land , 5 acres plot, costing Rs 1.25 cr.

„c xuildings- 80,000 sq Ft, construction Rs 4.50 cr.

„c Plant and machinery- Imported Nonwoven lines+5%Duty, Rs 60.0 cr.

Plant and Misc. ½ssets like Utility equipments, Rs 10.5 cr.

„c Duties, taxes, Engg., and Knowhow cost. Rs 2.85 cr.

„c Pre operative expenses incl., Interest during project. Rs 7.0 cr.

„c Provision for contingencies and escalation during project. Rs 5.0 cr.

„c Margin for Working capital for 2 ear at 70% capacity] Rs 10.5 cr.

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{c Payday loans to cover their operating expenses especially during the initial months of
operation.( rates are a bit high)

{c Purchasing of inventory, licensing, permits, and many others. The daily operations will include
expenses such as electricity, water, phone, salaries, insurance, etc.



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{c Aire only capable employees.

{c Resort to energy-efficient and environment-friendly facilities and equipment.

{c Keeping a record that will show the expenses, assets, liabilities, sales, profits, and all the
business transactions. xy having this record, entrepreneurs will be able to make certain
adjustments to reduce their expenses. They can also pay their bills on time, thus avoiding
accumulation of interest rates.

{c Resort to business-friendly credit providers.

{c xuy only office supplies and equipment which are needed.

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{c debt financing

{c states offer grant opportunities through government agency and other private entities.

{c equity financing

{c venture capitalists, angel investors, strategic investors

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{c It is proposed to finance the project, under the favorable Debt-Equity ratio of 3 to 1.

{c Debt, by way of bank term loan, at Rs 75 crore.

{c Equity part, at 25% of project cost, works out to Rs. 26 crore.

{c Aowever, with capital Subsidy of about Rs 5 cr. the promoter share to be Rs 21 cr.
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Prime RM is, 100% Polyester fiber, assumed at Rs 72/Kg

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{c For output of 46 Ton/day, the project would require 53 ton/day of Fiber

{c The early value of raw material works out to Rs 103 crore; and which is about 63% of the
sales turnover at optimum capacity in 3rd ear.

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{c The project would require Packing and finishing materials, Of approx. value 2.1% of the Sale.

{c The total cost of such Indirect material is est. at Rs 3.3 crore, at Opt. capacity.

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{c Total cost of all materials works out to 65% of sales, at Opt. capacity.

{c This leads to a healthy Gross margin[ or G P ] of 21% for the project.

{c GP to sale ratio is essentially called PxIDT ;and indicator of comparative Financial health of
Units of same capacity and same product lines.