POWERLOOM CLUSTER RAJAPALAYAM Distt: VirudhuNagar TAMILNADU

1. POWERLOOM CLUSTERRAJAPALAYAMDistt: VirudhuNagarTAMILNADU PREPARED BY L.RAMAMOORTHY, TO, PSC, ERODE

2. Present status of the Cluster:Introduction: At present there are around 10,500 powerlooms in and around Rajapalayam. This development in powerloom sector has also given rise to the related sectors. i.e, 103 spinning units (both SSI & non SSI), 50 Garment units, 25 Sizing units and 25 power processing and 50 hand processing units. Transportation: Rajapalayam well connected to the state road national high way to Madurai and Chennai. The goods are generally transported by lorries and trucks etc. There is a good net work of pubic bus services for the convenient movement of workers / man powers etc. Four and two wheelers and Auto richshaws are the cheapest mode of convince for movement with in the cluster. Rajapalayam is well connected by Railways.

3. Communication: Rajapalayam has a well developed communication network. There are so many post offices, PCO, STD, ISD, FAX, and Internet facilitates also available in this Cluster.Power And Water Supply The main power station of the cluster is Rajapalayam. The main station distributed thro electrical sub stations to allover the cluster. However the cluster facing some power supply problems. Sufficient water is not available to meet the requirement of textile industry.

4. Cluster profile: Total no. of looms :10,500 Powerloom concentrated area: Rajapalayam, Chatrapatti, Dahlavaipuram, Srivilliputhur.

5. Product Mix

6. Details of Associations: 6 Associations are in this cluster as follows:1. Chatrapatti Small Powerloom Association (150members)2. Surgical dressing manufactures association (90 members)3. Chatrapatti Exporters Association (11 members)4. Chatrapatti small master weavers Association (60 members)5. Rajapalayam Powerloom Association (50 members)6. Dhalavai puram Powerloom Association (120 members)

7. Details of Financial Institutions: There are so many financial institutions in this cluster for financial support to stake holders. Some important financial institutions as follows:Tamil Nadu Mercandile Bank State Bank of India Canra bank Karur visya Bank Distt. Co-op Bank Indian Bank Bank of India District industries centre.

8. Details of Textile Technical Institutions: Only one Textile Technical Institution in this cluster. That is Ramasamy Raja Polytechnic, Rajapalayam. They conducting so many textile related courses like Weaving, Spinning, Dyeing, Garments and etc.

9. Details of Technical Supporting centers:Most of stake holders having own testing centre for bandage cloths. Apart from this one SITRA (South India Textile Research Association) powerloom service centre is functioning in this cluster. The following activities are done by PSC. All types of Textile Testing activities Powerloom weavers training activities Powerloom weavers welfare schemes Design Development To arrange Buyer – seller meets and Exposure Visits To conduct seminars, technical workshops. To create Awareness Government schemes

10. Raw Material:Mainly 90% of used raw material is cotton. The remaining 10% is Blended material. so many spinning mills are situated in and around Rajapalayam. So easily availability of raw material. Mostly they are purchasing raw materials from direct Spinning units. Some of them purchasing through agents / traders.

11. Process Flow Chart Raw Material (Cotton & synthetic yarnboth dyed and Grey) Warping (Preparation of Beam in desired quality) Looming (Drawing in & denting) Weaving (Production of fabric) Finishing (Required finishing of fabrics mostly done by outsourcing) Packing (Ready to Dispatch)

12. INSTITUTION’S RELATIONSHIP MATRIX (Existing) RJA – Rajapalayam Powerloom Association

13. Issuse identified 1.Most of the SME’s having old technology. Very few SME’s are having advanced weaving technology based looms.2.As most of the units are involved in job work only. So, they do not know have any knowledge about markets and hence have no product identity. 3.Also though the labour is available in abundance yet it is not regular. 4. The working culture is not of high standard and this puts the processors in problems as it ultimately leads to inferior quality fabric.5.No variation in product mix6. lack of awareness regarding technology and quality

14. STRATEGIC DIRECTIONSMind set The main strategy required for development of the cluster lies in changing the mindsets of the core actor i.e SMEs owners. They should be encouraged to make network amongst themselves in order to undertake necessary developmental initiatives, including the establishment of necessary infrastructure facilities and to react considerably against adverse Govt policy which are the main bottlenecks in the cluster.Technical Technical support for improving the quality, design, productivity and linkages with the technical institutions and BDS providers will be provided when the industry is able to absorb such inputs Design center and resource center will also be established to build the cluster’s capacity to create new products.Energy Other technical inputs to conserve energy, resources, and other alternative energy producers.

15. Marketing Market surveys to identify the potential for the existing products, scope for diversifying into new products and new market segments will be undertaken to tap the huge market potential for the cluster. Motivation towards own brand marketing.Quality Management System Gaps should be identified in the implementation of quality management systems like 5 S Working System,ISO9000, 14000, SA 8000 and etc,.Working Conditions Necessary facilities should be made available at least within the factory premises.

16. Analysis of BUSINESS OPERATION of SMEs We can point out this cluster which has ideal features and almost developed strategy when compare to the other clusters in our nation. However the powerloom SMEs in the cluster are still staggering since the last five years. The growth and development achieved from nineties to the beginning of the century have not been continuing. This is mainly due to the failure of SME’s to adopt themselves to the changing the mind set and their business strategy, markets and products to face the global competitiveness. The future prospect of the powerloom SMEs of the cluster depends on up-gradation, modernization of their existing set-up including machinery and diversification of the products. In order to keep an upper hand in the fast changing market, one has to be innovative in manufacturing as well as in designing in the product and have the full knowledge of life cycle of a product.

17. Production During the diagnosis study, it was understood that about 80% of powerloom units producing under job work basis mainly Rest of powerloom units producing as per their buyer’s requirements and exporting directly or through the buying agents. The powerloom SMEs of this cluster are manufacturing several types of fabric. The 80% of the P/L SMEs, those having looms of old technology, are engaged in job-work for the leading retailers The remaining 20% are manufacturing bandage cloth for direct export. As stated above that the majority of Powerloom SMEs are getting the raw materials from the direct spinning mills. Sometimes, the Yarns purchased from traders/ commission agents.

18. Many of the SMEs, which are having their existing infrastructure, desires to upgrade their technology but are not ready to invest in new / modern technology due to fear of uncertain future and market.

19. CLUSTER VISIONTo increase the no of Direct Textile exporters form the present level of 15 to 55% by the year 2012. To increase the no of Direct Textile domestic exporters form the present level of 35 to 70% by the year 2012. To increase the modernize looms 500 to 2000 by the 2012 As per the programme for Modernized Group Work Shed Scheme introduced by Government of India, Ministry of Textiles..

20. SWOT ANALYSISStrengths:1.Existence of un – utilized production capacity 2.Stake holders have business background3.Availability of qualified technical personnel from the local institute itself.4.Easy Availability of Raw materials 5.Large Domestic & International market 6.Material and machinery easily available 7.Ability to run small quantity order batches8.Regular export order

21. Weaknesses:1.Low level of modernization and up gradation of technology 2.Low level of productivity due to inadequate formal training3.Horizontal growth of powerloom units 4.Low access to testing, designing & technical services.5.Cost based market set up6. Low diversification of products 7.Low availability of skilled workers8.Very less new comers9.No sufficient subsidy for power supply from State Government 10.Huge increase of Yarn Price

22. Opportunities:1.Growing domestic and international market2.Huge scope of product diversification3.Scope for subcontract orders form large units.4.Network gathering to bulk orders by distributing the work among the cluster’s units5.Availability of modern machines for modernization6.Opportunities for production of Technical Textiles 7.Availability of easy finance like TUFS for modernization and also MGWS

23. Threats:1. Association role are limited to advocacy only 2.Entry of multinational in domestic markets3.Stiff competitions from other countries4.Non tariff barriers from developed countries.5.Slow improvement in quality to meet the international market.

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