Feasibility Report Denim MFG. By Air Jet looms (assignment FM )

Feasibility Report Denim MFG. By Air Jet looms (assignment FM ) submitted to Sir Zahid Khan
Working by
Shakir Ullah & Waqar Ameen
Acknowledgment
We have been assigned a group report on Siddiqsons Group of company. We have taken its air jet looms
unit made up denim fabric etc. for that we have proposed a plan to install new air jet looms machine to
generate further revenue from it and expand its market as well, Nationally and Internationally.
While making the report we have learned a lot and this will definitely going to help us in our
professional lives as well. It was really a great opportunity for us to enhance our professional skills. We
would like to very thank full to sir Mr. Zahid Khan to give us such a great opportunity like this and also
for his support throughout the report.
We would also like to thank all those who extend their favors provide us the support in making this
report
Submitted to
Sir Zahid Khan
Group Members
Shakir Ullah
Waqar Amin
Dated: Dec 19, 2013
FFM
IUNC
Thr 18:30 to 21:30

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Executive Summary
The Siddiqsons Group was established in 1959 with the principal activity of trading in cotton cloth. It was
later diversified in different areas of the Textile industry.
With business acumen running in the Rafi family and also realizing the changes in the global demands,
the management of the Group, once again diversified into manufacturing Denim cloth in 1982. Since
than the group has consistently evolved according to the needs of the industry and have grown to
become one of the top denim manufacturers and exporters within Pakistan.
In 2004 the group set up it’s own completely completely equipped state of the art laundry plant. This
step enabled Siddiqsons to become a fully vertical denim manufacturer.
Siddiqsons wide geographic presence is one of its competitive advantages. From a Pakistani beginning,
the company grew to establish a presence in almost all major textile hubs around the world.
This has led to the development of a very close relationship between our company and our clients, and a
deep understanding of local needs and trends wherever we operate.
• United States of America • United Kingdom • Canada •
• South Africa • Spain • Italy •
• Germany • United Arab Emirates • China
We are the pioneers of denim in Pakistan, established in 1959 and boasting the largest and most
comprehensive denim and jeans facility under one roof in the country.
 2 denim fabric mills, in SITE and HUB
 3 jeans manufacturing units
 3.6 million garments annually
 Indigo dyed jersey knits
 5.50oz to 14.5oz denim range
 USA 4-point quality system
 Social compliance
 150,000 metres inspected a day
 500,000 gallons go through our water treatment plant
 Organic cotton
 500,000 square feet of manufacturing
space.
 40 million metres of woven fabric a year

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Siddiqsons is committed to bringing the best clothing experience to consumers of all ages and plural
around the world through its innovative quality—oriented product offerings.
Change in the demands during last 2 years suggests that the share of European market, united kingdom
in the particular, have increased substantially. The orders expected in upcoming years will require the
current capacity to be increased. This report suggests which setup should be installed to get the
maximum output. It includes comparisons, of previous order trends category & and old looms machine
with new machinery. On reviewing these comparisons of previous performance it can be clearly seen
that the capacity of fabric continue to increase particularly for the European market.
Considering the International market setup, proposals of the machinery equipment’s, human resources,
building & other expenses have been started separately & totally project cost expected has also been
calculated.
i. Acknowledgement -------------------------------------------------------1
ii. Executive Summary-------------------------------------------------------2

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Table of contents
Ser. TOPICS Page No.
1. Introduction __________________________________05
1.1 Global trade of fabric made-ups
1.2 Global trade of denim mfg.
1.3 Share of Pakistan in global trade
2. Siddiqsons Group of Company_______________________06
2.1 Current structure
2.2 Product Mix
2.3 Opportunities rational
2.4 Market Rational
3. Production Process _________________________________11
3.1 Process Flow
3.2 Raw Materials
4. Proposed Production_________________________________13
4.1 Proposed Capacity
4.2 Total project Cost
4.3 Production Capacity
4.4 Product Mix
5. Project Requirement___________________________________14
5.1 Machinery requirement
5.2 Office equipment requirements
5.3 Furniture and Fixture Requirements
5.4 Human Resource Requirements
5.5 Land and building requirements
5.6 Utilities Requirements
6. Project Economics________________________________18
7. Recommendations__________________________________19

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1.Introduction
1.1 Global Trade of textile made-up
Textile made-ups are not one of the most valuable and important international trading commission. In 2012 the
international textile made ups trade value was above US$35 billion which can be divided into three major categories
i.e. denim fabric, Canvas Jeans Fabric & Knit Denim Fabric major exporter of sector which producing denim China,
Pakistan, India, Bangladesh and Sari Lanka grooving rate of industry is more than 3.2% from last 5 years
Pakistan being the 5th largest exporter of textile made ups has increased its share in the international market from 7%
to 10% in previous five years by earning a foreign exchange of around US 3.5 billion in 2012
1.2 Global Trade of Denim
Denim is an important value of textile sector. Denim products included pant shirt, jackets, covers and bags etc. in
made ups in the 5th largest share i.e. 11% approx. of total made ups market
China is the main exporter of denim mfg. as a whole and exported around 21% of the denim market in 2012. Pakistan
which have 5th largest position share i.e. 11% in 2012 had a phenomenal growth of 16% per annum in the last five
years and then Bangladesh & India capturing the market 11% per annum growth rate
USA is biggest importer of denim products for the last 25 years and shared more than 22% of the total imports
followed by Eruption region
1.3 Share of Pakistan in global trade
In 2011 denim products 1.7 billion in foreign exchange earnings, which has now reached more than 2.1 billion
approximately 18% of total denim made-ups exports of Pakistan. In Pakistan the denim market has increased by an
annual average of 17% in the last 5 years. Looking at the international perspective Pakistan’s share of the denim
products increased from 17% in 2001 to 2012.

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2. Siddiqsons Group of Company
2.1 Current Structure
Currently, the company structure is based on the in- house processing and fabric mfg. included
denim stitching washing and other processing; the raw materials used for these operations are
procured from different suppliers in the market. The company has many his own processing
facility but in chemicals raw depended on chines supplier and locals from Karachi and Sialkot
etc.
The current capacity of the company is to process the fabric and other products more than 10 million unit
per month. This total production of the processing is utilized in the stitching units and fabric mfg. units in
mention table
Monthly capacities of different Department
Department Units
Fabric Manufacturing 05 million
Printing 2 million
Stitching 2.5 million
The new machinery recently installed will increase the fabric mfg. capacity of the company by
2.5 million meters per month. Out of these additional 2.5 million meters 2 million meters will
and balanced by the current idle fabric mfg. Capacity the remaining 0.5 million meters will need
extension in the fabric mfg. for which new plant machinery need to be installed, we must
analyze the demands pattern in the periods
2.2 Product Mix
Siddiqsons is known in the international market for its diversifications in Denim MFG. and
Denim Knitwear Canvas and Denim. Share of the different categories in the total export of
Siddiqsons

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2.3 Products Mix
Reviewing the performance of last 3 years, it can be seen that the share Denim MFG. in 2012 the annual volume
increased by more than 5% suggestion that there lies a huge potential for growth.
Fig Siddiqsons Export Performance in 2012
Denim Fabric
Knitwear Fabric
Canvas Fabric
Other
Denim Fabric
Knitwear Fabric
Canvas Fabric
Other

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Fig Siddiqsons Export performance 2011
Fig Siddiqsons Export performance 2010
On reviewing the demand patterns, it can be clearly seen that the demand of Denim fabric has increased in the
recent years. Below fig. shows the contribution of denim fabric in the total exports of siddiqsons indicating the
potential in the category.
Denim Fabric
Knitwear Fabric
Canvas Fabric
Other
Denim Fabric
Knitwear Fabric
Canvas Fabric
Other

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Contribution of Denim Fabric
The biggest & the most attractive aspect that promises the growth of the current industry is that China which is the
biggest exporter will be out of the competition in the upcoming years. The edge china had while competing in the
international Market was their production years, the edge china had while competing in the international market
was their production cost, and this was due to the labor force & Government Policies supporting the industry.
Recently, the Government of china has imposed different taxes on exports have stated to shift their orders from
China to other exporters. Pakistan being the second largest exporter of textile made ups will get the maximum
share of the shifted orders, since, china is competing mainly in the denim fabric category, and the share of the
denim in the exports of Pakistan will increase.
2.4 Market Rationale
The market of denim mfg. is further classified as European Market and US Market. The difference is due
to the distinction in the styles and articles used in both markets. Different styles will require different
machines and different operations. So before deciding on which machines to installed, we should know
the market which has the potential to increase, fig. shows the recent share of top 10 buying countries.
Denim Products
2010
2011
2012

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Percent share of top 10 Buying counters
Below fig shows the change in demands of the European buying countries in particular.
Demand Change of European Countries
Top 10 Buying Countries
USA
UAE
Canada
Italy
Spain
Belgium
France
Netherlands
Germany
0 5 10 15 20 25 30 35
Italy
Spain
Belgium
France
Netherlands
Germany
UK
Series3
Series2
Series1

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Reviewing these changes it can be seen that the share of the European market (UK & other countries has increased
during last 3 years.
Apart from these past records, the potential orders that are expected to be shifted to Pakistan this year will also
comprise of European Market. Since the customers hesitate to place their orders in china due to the foreign
relations between the two countries.
3. Production Process
3.1 Process Flow
The major raw material used in the Denim Fabric which is manufacture on air jet looms or shuttles looms siddisons
procures the fabric materials and process it to finished fabric used for stitching the final articles. The denim mfg.
process starts with mention below fig.

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3.2 Raw Materials
The raw material required for producing packed article included all process:
Manufacturing of Denim
Spinning
Open End Spinning
Ring Spinning
Fabric Weaving
Warp yarn
Weft yarn
Warping on Sectional/ Direct Warping
Sizing of yarn in Set/ Beam to Beam Position
Drawing–in
Beam Gaiting or Knotting on Loom
Weaving
Aired Looms
Finishing
Grey Fabric
Denim Fabric
Rope Dyeing
Sheet Dyeing
Sheet Dyeing Process
Making-Up
Weaving Defects
Uneven Dyeing
Bleaching and Dyeing Defect
Oil Stain
Patches
Dispatch

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4. Proposed production
4.1 Proposed Capacity
The proposed production capacity of the project is based on 8 hour single shift and will produce 12 %
more than increasing in production per day and 20,000 per month
4.2 Total Project Cost
Total cost project is about 10,032 Rs. Per day
460,955,000 total Cost of per arum
4.3 Production capacity
The proposed project with 68 air jet looms machine will produce 532,461 unit on 24 hours shift per day
total for per year, the capacity utilization of the project is 95% increasing annual growth per annul 10% +
4.4 Product Mix
Proposed air jet looms project unit has been defined to manufacture denim mfg. for international
market details are mention below
The different types of Denim fabrics include cotton serge, raw denim, selvage, stretch, poly, as
well as ramie Denim. The main different among these denims is that they are blended with
different materials; however, they are all fashionable.
Selvage Denim
o The premium type of raw denim fabric is selvage denim, with tight weaving and natural
edges that will not unravel. Selvage denim is more expensive than other raw denim.
Stretch Denim
o The blend closest to pure denim is called stretch denim, which usually includes 2 or 3
percent Spandex material for a bit of give in the fabric.
Poly-Denim
o Poly-denim blends look like a dressier denim, and are more lightweight, which makes them
more convenient to wash and dry. They also are more resistant to wrinkling.

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Ramie-Denim
o Denim is also sometimes blended with the plant fiber ramie, which reduces wrinkling and
gives the fabric a softer feel.
o
PRODUCTION MIX
5. Project Requirements
5.1Machinery Requirements
All the quoted prices are air jet loom brand. The require machinery available in
international market easily range of the suppliers & origins i.e. Japanese, Italian, Chinese,
Korean and Taiwanese origin.
Prices details mention below
Ser Plant & Machinery Cost
1 Acquisition cost 53 + 15 Looms 460,955,000
2 Acquisition Cost- Finishing Machine 22,000,000
3 Acquisition Cost- Air Condition Unit 2,200,000
4 Acquisition Cost- Chiller Unit 5,500,000
Selvage Denim
Stretch Denim
Poly-Denim
Ramie-Denim

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5 Acquisition Cost- Overhead Cleaner 2,788,500
6 Acquisition Cost- Cooling Tower 3,300,000
7 Acquisition Cost- Compressor 18,959,325
8 Acquisition Cost- Dryers 9,646,560
9 Acquisition Cost- Genets 76,230,000
10 Acquisition Cost- Heat Recovery Plant 5,500,000
11 Acquisition Cost- Sizing Range 22,000,000
12 Acquisition Cost- Coiler Cans 720,000
13 Insulations of Steam lines 500,000
14 R/O Plant Up gradation 500,000
15 Front Process up gradation cost- Looms 3,000,000
16 Floor repairing & Underground ducts cost - Looms 2,000,000
17 Other Civil works - Looms 6,300,000
18 Cabling and Other installation charges 800,000
19 Civil Works for Compressor 1,000,000
20 Civil Works for Generators 1,500,000
21 Incremental Energy Requirement -
22 Expected Production Loss for All Phases 5,856,111
23 Margin Forgone for Production loss days 4,506,750
24 Generator maintenance cost -
25
Repair and Maintenance- Compressor Rs. 0.50/
meter -
26 Repair and Maintenance- Dryer Rs. 0.25/ meter -

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5.2Office Equipment’s Requirement
Ser Details Qty. Per Unit Cost Total Cost
1
Computer core i3 5 20,000 100,000
2
Printer 2 8,000 16,000
3
Switch D-link
Wifi 2 5,000 10,000
4 Air Conditioner 2 50,000 100,000
5
Telephone set 5 2,500 12,500
Total Office cost 238,500
5.3 Furniture & Fixture Requirements
Ser Details Qty. Per Unit Cost Total Cost
1
Work Stations 10 5,000 50,000
2
Chairs 20 2,000 40,000
3
Sofa Set 2 5,000 10,000
4 Table 5 15,000 75,000
5
Networking Electfications 1 15,000 15,000
Total Office cost 190,000
5.4 Human Resource Requirement
The air jet operators will be paid on per unit basis. The rates are given below

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Ser Details Qty. Per Unit Rate
1 Stretch Denim 1 4
2 Poly-Denim 1 2
3 Ramie-Denim 1 5
Apart of the operators, other human resources included administrative staff & production staffs are
mention below
Ser
Job Title Qty.
salary per
month Total
1 Manger Finance
1 50,000 50,000
2 accounts officer
1 25,000 25,000
3 marketing supervisor
1 30,000 30,000
4 store supervisor 1 15,000 15,000
5
computer operator 1 15,000 15,000
6
peon
2 10000 20,000
7
guards
3 12,000 36,000
8
driver
1 12,000 12,000
9
Manger Production
1 40,000 40,000
10
Manger Quality
1 40,000 40,000
11
Pro. In-charge
1 25,000 25,000
12
Pro. Supervisor
2 18,000 36,000
13
Looms mechanic
2 15,000 30,000
14
Line Offcier
2 15,000 30,000
15
Finishing Supervisor
1 35,000 35,000
16 Technical and 2

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Electrical 15,000 30,000
17
Helper
8 10,000 80,000
18
Cleaner
3 10,000 30,000
Total Amount 579,000
5.5 Land & Building Requirement
The land & building requirement as the expansion of 58 machines can be adjust in the 2500 sq. feet area
Total require are more than 4000 sq. feet for labor facility
5.6 Utilities Requirement
The utilities required to continue the operation will be include
Electricity
Telephone
Water
6. Project Economics
The total cost is summarized in below table
Ser Details Cost
1 Looms and Machinery 655,762,246
2 Office Equipment 238,500
3 Furniture & Fixture Cost 190,000
HRM Cost 579,000
4 Other Expenses 500,000
Total Cost 657,269,746

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7. Recommendation
After evaluation the previous demands & the changes that have occurred in the last 3 years, we can conclude that
the market & demand of European style of fabric wear will increase in the upcoming years. The most promising
buying country is United Kingdom followed by other European Countries.
This increase in demand will be further supported by the shifting of orders from china due to their cost increase.
Currently, china is catering major chunk of the European market instead of USA and is the leading exporter of
denim product to Europe. Pakistan being the second largest exporters will get the maximum share of the shifted
orders.
The most crucial thing in convincing the international buyer is to assure them that we have the capability, talent
and capacity to start and continue our working relation. As Siddiqsons group currently is major supplier to many
big names in European market, which include CALVIN KLEIN, GAP, RIVER ISLAND, AEROPOSTALE, KOHL’S,
NEWYORKER, SUITEBLANCO, VF and CARBON and others the capability can be assured by current buyers in the
profile. For capacity assurance, the extension is needed to present that the company do want to extend its profile
by adding new customers in it.
In our opinion to avail this huge opportunity, Siddiqsons should increase its capacity to assure international
customers & retailers that they have the capacity to digest such huge shift and are willing to add valued customers
in its profile
Note,
Calculation sheet attached with report

Feasibility Report Denim MFG. By Air Jet looms (assignment FM )

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