SITARAM

TEXTILES LIMITED

GROUP 6
Abhigyanjit | Gwendoline | Leonore | Manorama | Monica | Sushmita | Mahesh
CASE FACTS
SITARAM TEXTILE MILLS
 Government owned textile mill in India. Mostly operates in Kerala, Andhra Pradesh, Mangalore and
Tamil Nadu
 Product mix consisted of a wide variety of cotton fabric in addition to yarn. Poplin was the best
selling fabric
 Traditional channels of distribution that consists of agents, wholesale distributors and retailers

DISTRIBUTION PROCESSING CYCLE

AGENTS COTTON SPINNING YARN

WEAVING GREY CLOTH

WHOLESALE DISTRIBUTORS YARN

RETAILERS GREY CLOTH PROCESSING FINISHED

PRODUCT
INDUSTRY AND MARKET RESEARCH
 Overall growth in the past 15 years , the
number of mills rose from 700 to 1416
 Though the capacity utilization of loom was
poor, Kerala fared better than the rest of the
country
 As a result, the loom sector contributed to
94% of the total cloth production, rest was
produced by the mills
 Government permitted only marginal
expansion in weaving capacity for the
organized sector, thus the weaving capacity
for the mills got stagnated
 This caused a growth in the decentralized
power loom and handloom sector, that gained
at the expense of the organized mills
 South Indian women ( age > 20 years) are
major users of Underskirts, Salwaar Kameez
was worn by women between 15 to 30 years
 Men wear Dhoties inside home , outside they
wore Pants elderly wore Dhoti even outside
 Dhoties and Lungies were more used in the
lower strata and in rural areas
 Purchase of uniforms was made from Schools
or selected shops and private schools
preferred uniforms made from blends
 Chudidar/salwar kameez were made from
cotton, polyster and cotton polyester
 Cotton was preferred for nightie
 Cotton was used equally for inner and outer
wear while polyester and blends were used for
outer wear
Consumer demand and preferences
Cotton demand was increasing at slow pace
Non-cotton Fibre’s demand was decling rapidly
Blended/mixed was increasing demand
The major purchase of textile was for sarees, ready made
garment and shirting/Poplins in descending order
Poplins was slowly being replaced by other products except in
underskirts
Sales for Lungies and long cloth was declining
Sales increased for Better quality Poplins, poplins of 1.5 metres
width, Bizzi lizzi
• About one third of population was unaware of Power
loom's contribution to India
• Higher income groups were inclined to Branded items
• For school uniforms, blends were mostly preferred
• For industrial workers, uniform cotton cloth was
demanded
• Printed bedsheets were preferred over plain bedsheets
• Chudidars fabric was not in demand because Garments
from Ahmedabad & Mumbai were cheaply available
and fabric required larger stock than garments of equal
varieties
• Attribute based preference:
Kerala – Quality (Mills advantage)
Tamil Nadu, Karnataka – Softness (Cotton) Andhra
Pradesh, Kerala – stiffness of Polyester
Competition
Growth of power loom sector
WHY Lower priced variants available due to lower cost of labor in few places
Emerging competition from unorganized sector dhotis
Segment Competition

Poplin • Century and Umaid Mills are preferred in higher price range
• Process houses like Sreenivasa Processing or Balhotra Mills have stronger presence in South Kerala
• In interior areas Polyster viscose (Bizzi Lizzi) are replacing poplin demand
• Better turnover discounts for dealers are offered by Western India cotton mills in North Kerala
Fabric for Brassieres • Limited competition from low cost producers
• Ram Kumar Mills, Hindustan Spinning & Weaving Mills, Western Indian cotton are among competitors

Bedsheets & Lungis
Nighties
Uniform Shirting & Suiting
High Quality Dhoties
• Small manufacturers were exempted from 25% excise duty
• Low cost printed bedsheets available from Erode
• High demand for “Microsoft” brand nighties from Hindustan Cloth Manufacturing Pvt Ltd
• Products from Davengeree and Hindustan Spinning & Weaving mills are preferred in the market
• Process houses providing Rs. 10-15 cheaper
• Lower priced items from Surat have strong market presence
• Strong brand loyalty towards Century Mill’s “Param Sukh” in Cotton Dhoties segment
• In Chiffon and Blends market, Premier Mills commands brand loyalty
• In interior markets, lower priced brands had command
 Problems
for Sitaram
Textiles
  Brand awareness in Mangalore
 Servicing of regular account by agents of
corresponding areas
 Relationships (good) maintained by agents
with wholesalers
COMPETITIVE  Processing and dyeing facilities of Sitaram

CAPABILITIES met suitable quality standards

 For high range poplins, substantial quality
difference in favor of Sitaram because of
usage of mills
 Yarn and processed cloth had good quality
perception in the market and had good
acceptance
CAPABILITIES FOR SHORT TERM
COMPETING IN SHORT TERM
S.No
. CAPABILITY LARGE PLAYER UNORGANISED
Rent it out to small players/ modernise it They don't have excess capacity, SRT can play on
1 Excess Processing Capacity to manufacture blended fabric economies of scale
Can compete against other lesser
2 Very well known for Poplin known players
Pass the benefit of economies of scale to the
3 High capacity utilization for Yarn Promote Yarn well to increase sales consumer, lower the prices
Yarn, Processed cloth of SRT are perceived to Get their products certified, to increase
be of good quality in the market (Evaluated by their perception of quality by
4 SITRA) consumers and partners They can not go for certifications as they are costly
Unorganised players will lose out as the market as a
Mangalore/ North Kerala market is aware of Try to gain the majority market share in taste for branded items, also the competition is less
5 SRT, and demand exists for branded items Mangalore intense
Should use the wholesaler network to
increase the word-of-mouth about SRT
to the retailers (Agent-> Wholesaler-> Not as trustworthy to the retailers as big and
6 Was known to most wholesalers Retailer) established players like SRT
There is shortage of fabric for brassier
due to limited competition from low cost
producers.
With periodic shortages and irregular
supply by other mills, there is an
opportunity for Sitaram
textiles to step with its higher quality
7 Brassieres cotton offerings.
Regions like Karnataka and Tamil Nadu,
where softness was preferred, can be
8 Chudidars targeted
ENTRY INTO THE BLENDED FABRIC
MARKET
Yes, it should enter the blended fabric market FABRIC FOR BRASSIERES
Focus on the urban segment  Limited competition from the existing low cost players
 Inconsistent supply from the existing players
CAGR Cotton Blended  Reasonable demand for blended fabric in this
All India Textile sales volume 30% 36% segment
Urban 18% 31%

Rural 27% 25%

FABRIC FOR UNIFORM SHIRTING & FABRIC FOR UNDERSKIRTS

SUITING
 Blended fabric was in demand
 Mill products are Rs 10 to 15 cheaper as
compared to the products of process
houses
 Schools preferred mill products
 Blends are replacing the earlier poplin
fabric
 Demand for blended skirts were upto
40% of the total fabric demand for
underskirts