Professional Documents
Culture Documents
Group 6
Group 6
CIA 3
Group 6:
1) 1927927 - Thamaraiselvan V
3) 1927942 – Padmavarthini S
4) 1927951 - Sreenithi K T
The textile manufacturing industry in India is the second largest industry after agriculture
contributing around 2 percent of India’s GDP. The major challenge identified in textile
industry is improper management of wastes generated from production. Eighty-five
percentage of discarded clothes end up in landfill. Garment landfills account to about four
percent of global landfill. It is estimated that ninety-nine percentage of clothes that can be
recycled and reused. Therefore, recycling and reusing the garments are crucial.
Swell knit is a company that aims to provide sustainable solution to recycle garment wastes to
yarn so that the recycled yarn can be used to produce garments again. The company is situated
in Avinashi, Tamil Nadu. It is a partnership firm with three partners working together who
have fifteen years of experience in garment industry. Textile recycling is the process in which
old clothing and other garment wastes can be recycled and reused. In the business that is
proposed here, the garment wastes are collected from garment manufacturing companies and
are to be turned into reusable yarn. It includes key processes like collection of garment
wastes, sorting of wastes, sanitization, fiber opening process, carding, drawing, rotor spinning
and doubling & twisting process.
According to the estimates, the startup business is expected to maintain a healthy position in
the next five years. The business will be initially financed by a $100,000 five term loan and a
total capital investment of $100,000. The repayment of the loan will be sourced from the cash
flow generated from operations. The company is able to generate profits from its first year of
operations. Around 3060 units are to be sold to achieve a breakeven point.
The importance of recycling the garments is increasingly being recognized. The business
focuses on sustainability and circular economy. The business tries to create circular fashion
value chain that involve in reducing the waste by recycling and reusing the garments.
2. Industry analysis:
According to Secondary Materials and Recycled Textiles Association (SMART), 100 percent
of all the used household textile items and clothing can be recycled and re-used. The
importance of the textile to be recycled is increasing drastically as the companies are moving
towards sustainability. The source of recycling can be from two sources:
• Increasing support from central and state government for textile parks, research centers
and laboratories will help in improving the textile recycling businesses. • Elimination of
restrictions and import duties on capital equipment will attract foreign investors.
Economical Factor:
• Various economic factors like per capita income and employment generation have
positive influence on recycling textile industry.
Social Factor:
• Population growth rate, increasing awareness to health and hygiene and consumer’s
Technological Factor:
• The processes involved are similar to the traditional method, therefore basic level of
training is sufficient for the labors which will not affect the employment rate of
unskilled labors.
Environmental Factors:
• Recycling of industrial wastes and pollution free usage of technology are important
concern of textile industries. Therefore, recycling has a positive impact on
environment.
Legal Factor:
Swell knit is a company that provides sustainable solutions to recycle garment wastes to yarn
so that the recycled yarn can be used to produce garments again. The company is situated in
Avinashi, Tamil Nadu. It is a partnership firm with three partners working together who have
fifteen years of experience in garment industry. The company emphasizes on sustainability
and circular economy which helps in reducing the landfill caused by garment wastes.
The business is expected to gain a minimum profit in the first year of its operations and it will
increase over the next four years as the company expands based on its supplier relationships.
3.1 Business objectives: The business aims in reducing the percentage of global landfills that
is caused by clothing and textiles by collecting the garment wastes and recycling them to yarn
and resell it.
3.2 Mission statement: The Company’s mission is committed to protect the environment and
help in creating a sustainable environment for future generations.
The garment wastes are collected from the garment manufacturing companies and are
sanitized. These garments are processed and turned into yarn .These yarns are then sold in
bulk so that garments can be produced again.
Target market: It initially focus on collecting the garment wastes for recycling from Tirupur
and Coimbatore.
4. MARKET ANALYSIS
4.1 Market Overview
The global textile recycling market grew at a CAGR of around 19% during 2014-2019.
Textile recycling refers to the method of reprocessing and reusing old clothing, scarps, and
fibrous waste materials. Generally, these materials are recovered from discarded clothes,
carpets, furniture, tires, footwear, and other non-durable goods, such as towels and sheets.
Textile recycling offers several environmental and economic benefits, such as reducing land
and water pollution, minimizing dependence on virgin fibres, curbing usage of chemical dyes,
and optimum consumption of energy and water. In recent times, it has emerged as an
effective method for sustainability development in the apparel industry. Owing to these
benefits, recycled textiles find wide applications across several end-use industries, including
apparel, home furnishings, and other industrial sectors, such as retail, automotive, mining,
building, construction, etc.
The increasing demand for recycled textile is primarily driven by the rising environmental
concerns towards the detrimental impact of waste incineration, heavy industrial discharges
from textile mills, and depletion of raw materials, such as silk, wool, etc. Furthermore, the
growing production of synthetic and polyester fabrics have led to the high emission levels of
greenhouse gases, thereby fuelling the need for recycled fabrics on a global level. Apart from
this, the growing public awareness towards the importance of recycling old clothes coupled
with the increasing number of collection bins for cloth sorting, have further propelled the
market growth. Additionally, various recycling companies are launching informative
initiatives regarding textile recycling along with introducing door-to-door pickup programs
for old garments. Furthermore, these companies are also adopting innovative strategies for
picking up post-consumer clothing materials by installing attractive cloth bins in public
places such as parking spaces, parks, shopping malls, walkways, and other high visibility
locations. In addition to this, several technological upgradations supported by the rising
penetration of automation in the recycled textile industry have also catalysed the market
growth. For instance, Textile for Textile (T4T), an eco-innovation initiative by the European
Commission, has led to the introduction of near-infrared (NIR)-spectroscopy technology for
performing automated sorting applications in the recycled textile sector. Moreover, the
emergence of eco-clothes that are made up of recycled textiles, plastics, and other organic
raw materials have helped in waste reduction and resulted in minimal landfill space, and low
dependency on virgin resources, such
as cotton and wool. All the above-mentioned factors will continue to fuel the growth of the
global textile recycling market in the coming years. Looking forward, IMARC Group expects
the global textile recycling market to continue its strong growth during the next five years.
• Wool Recycling
• Others
• Post-consumer Textile
Breakup by Region:
• North America
• Asia Pacific
• Europe
• Latin America
• Flexible Production •
Reduce SCM costs
THREATS
• Governmental support •
S
Sustainability • Low-cost production •
• Reuse, Reduce, Repair, Education for
Recycle Reduce raw sustainability
WOT
materials
• Technology too
expensive
OPPORTUNITIES
WEAKNESSES • Interests of multinational
• Small niche market •
Subvention • Marketing potential • Only
• Access to information • local raw materials • Slow-
Socially accepted production
• New research can be done • • Small pressure group •
Reduce pollution for SCM
5. MARKETING AND SALES PLAN
5.1 Overall Marketing Strategy
Emphasizing the sustainability values and focusing on specific niche Company main
marketing emphasis is on the sustainability factor. The company should position itself as a
firm which promotes the sustainability via decreasing the environmental hazards caused by
the wasted garments.
Here the process is to recover fiber, yarn or fabric and reprocessing the textile material into
useful products.
Goal - The Company’s main objective through marketing should be:
• Increasing its Reach among the garment industry.
• To increase continuous upgrading and loyalty of the clients and their recommendations
Target groups – The Company is trying to position itself by collecting the garments from the
garment producers and converting it to yarn and selling it to garment producers itself. The
target group consist of a very niche segment that is garment manufacturers Strategies – First
and foremost strategy is to prove that the product is of high quality. extensive advertising, and
expanded distribution in order to increase our revenues and growth rate. Tactics - Channels:
Postcard, email, phone calls, meetings, webinars, Oral communication
• Wholesalers – A dozen wholesalers who sell the yarn and buy from us • Online – The
Company is also trying to increase its reach through online sales and its online presence.
Promotion – Promotion can be done in the following ways:
• Online promotions
• Sustainability conferences
So, sales process should be planned in such a way that these are avoided. The steps in sales
process are:
• Prospecting - Finding potential customers and determine whether they have a need yarn
Approach – Face to face meeting, Email and telephone to meet clients • Estimation –
Estimating how to produce by looking at the clients • Closing – Finally selling the
Sales tactics
• Consumer Incentive
• Price reductions
• Trade Exhibition
• Trade Bonus
• Distribution Incentive
• The incoming unwearable material is sorted by type of material and color. Color sorting
results in a fabric that does not need to be re-dyed. The color sorting means no re-
dying is required, saving energy and avoiding pollutants.
• Textiles are then pulled into fibers or shredded, sometimes introducing other fibers into
the yarn. Materials are shredded or pulled into fibers. Depending on the end use of the
yarn, other fibers may be incorporated.
• Then the yarn is re-spun and ready for subsequent use in weaving or knitting. • Some
fibers are not spun into yards, however. Some are compressed for textile filling such as in
mattresses.
The main requirement for the business is a textile waste recycling machine. It should match up
with the ever-increasing requirements of the customers, our company is engaged in providing
Textile Waste Recycling Machine.
The Company have to buy a fully equipped recycling machine. The company is planning to
go for either fully automatic machine or semi-automatic machine.
The cutting size of the machine should range between 5-150mm and capacity ranging between
1000-3000 kg/hr.
Cutters:
▪ Cutter CMT-900
Tearing Machines:
▪ Master 1500/2000
▪ COMPAK 1000/1500
▪ Pre-carding AF-1500
▪ Avant-card 1800
▪ Automatic Boxes CA
• Poor consumer demand for recycled textile products, which tend to be perceived as
lower quality
• Consumers’ unawareness that textiles should be recycled and how they can be disposed
• Lack of mainstreamed, up-scaled processes and know-how to collect and sort textiles by
fiber type
Recycling technologies
Lack of mainstreamed, up-scaled processes and know-how to separate fiber types from
the mixed blends and composite structures
• The recycling end-market dominated by low quality materials and blends • Costly
logistics and low availability of textile recycling plants on local and regional level
recycling technologies
The fully automatic machine cost around 24 lakhs and semi-automatic cost around 14-18
lakhs
The recycling textiles is not common so licensing would one of the major proprietary
issues Developing a brand name would be one of other issues since this business is not so
familiar with the consumers. So, to developing a brand image would be helpful in
increasing the customer base
7. OPERATIONS PLAN
wastes
The company will collect the garment wastes from the company. The wastes can be either in
the form of finished clothes (defective items), scrap, defective pieces while cutting or stitching
etc.,
Sterilization: The wastes will be then processed into the ozone chamber to remove the
microorganisms or bacteria presence in the wastes.
Shredding: The garments are then shredded into yarns and fiber particles with the help of a
shredding machine
Cleaning: The shredded materials are made into clumps and Impurities present are removed
through the cleaning process
Carding: The clumps are then carded and the orientation is aligned to make as a fiber
web Drawing: The fiber webs are straightened and the evenness is improved Spinning:
These fibers are input to high-speed rotor and made as a single yarn
Twisting: Two single yarns are combined and input into a twister machine and made as a ply
yarn
Distribution: The ply yarn will be distributed to garment manufacturing companies for their
production process
• Sterilization machine
• Cleaning machine
• Carding machine
• Drawing machine
• Spinning machine
• Twisting machine
Garment Manufacturers in and around Tirupur and Coimbatore are the key partners. They will
be providing the garment wastes for recycling to ensure sustainable operations
8. MANAGEMENT TEAM AND COMPNAY
STRUCTURE Investors
Key partners Design and
CEO
(Entrepreneur)
Investors
Fund providers for the company’s operation and the key members in Board of Directors
CEO
Person who founded the organization acts as a CEO. He is responsible for the overall
company’s operation and he borrows funds from the investors and he is liable to return the
money back or profit sharing as per the agreement between the Investor and the entrepreneur
Key partners
Garment manufacturers who are keen in bringing sustainability operations to the company.
These manufacturers will tie with our company for the purpose of recycling the garment
wastes produced.
Team involved in designing of process flow for the recycling process. Primary focus in on
best recycling practices with optimum utilization of cost and resources.
Engineering
Team involved in machine building. Development of machines that satisfies the design
requirements. Increasing the productivity at improved quality level will be the key targets.
The team will be involved in periodic maintenance of machines and ensure limited down time
of the machines
Production
Responsible for achieving the output as well as desired quality levels. Plan and follow the
work instructions as per the standard. Highlight key issues to the management and arrive at
root cause of the problem. Collaborates with engineering and Design team to solve
production issues
Quality
Development of quality standards for the recycle process. Ensures quality level at each step of
processes and implement corrective actions where and when necessary
First step is the development of practically feasible business idea. Circular supply chain is the
theme of the business and it involves recycling of garment wastes by following series of steps.
Nowadays, companies are keen towards sustainability. The focus is more on waste elimination
and how to create an ecofriendly environment. Our company will help the customers achieve
sustainability through recycling of garment wastes. The wastes are recycled and converted
into threads (yarns) which will again send as input for garment manufactures. Hence no
wastes are land filled and pollute the atmosphere, instead it flows in circular cycle
The main source to operate any business is funding. Plan is to find potential venture capitalist
through presentation of business plan. Finding companies who are interested in recycling and
sustainability are the key resources of funding. Companies or Venture capitalists interested in
busines idea can offer basic funds to prove the business idea through prototype. Upon
successful proving, investors can fund the business after entering into legal contracts
9.3 Finding key partners
Garment manufactures interested in waste reduction and sustainability are the key partners.
An agreement will be the made between the key partners and our company. Wastes generated
from the garment company will be collected our company which will be processed into yarns
and then supplied back to the garment company.
To prove the business idea, sample of wastes collected from garment will be taken and then it
processes through the series of recycle steps. The recycled yarn will be sent across the
stakeholders to gain their interest and attention
Upon successful proven of business concept, investors can allocate necessary findings so that
the business will be operate in a full-fledged manner. Operations will start and the company
start earning revenues
10. FINANCIAL PLAN
Textile recycling is a capital-intensive business and thus a lot of expenses will be incurred in
order to manage it. The different costs include wages, energy, cost of equipment’s, transport,
rentals and machinery. An effective financial plan with support the startup capital
requirements and the working capital expenses.
According to the estimates, the startup business is expected to maintain a healthy position in
the next five years. The business will be initially financed by a $100,000 five term loan and a
total capital investment of $100,000. The repayment of the loan will be sourced from the cash
flow generated from operations. The projected financial statements have been prepared based
on reasonable estimates and judgements.
• There would be an economic slowdown in the coming five years but no major
depressions
• There is a continuous demand for the recycling of the clothing material in the market. •
Inflation rate to be assumed as 5.1% and tax rate to be 20% for the coming five years. •
Total Sales 1572.00 1827.00 2375.00 3325.00 4988.00 Total cost of sales 315.00 365.00
475.00 665.00 997.00
Operating income 818.00 1011.00 1419.00 2000.00 3024.00 Other Expenses 189.50 223.20
303.00 357.00 423.00
Current Assets
Cash 711 1498 2616 4255 6851 Inventory 20 20 20 20 20 Prepaid Expenses 12 9 6 6 6
Other Current 4 3 2 1 -
Total Current Assets 747 1530 2644 4282 6877 Fixed Assets
Equipment 65 65 65 65 65 Furniture and fixtures 5 5 5 5 5 Vehicles 20 20 20 20 20 Total
Fixed Assets 90 90 90 90 90 Depreciation 14 28.5 42.8 57.14 71.4
The sustainable textile company expects a healthy growth and a healthy financial position.
There are no projections for debt obligations as long as the objectives are achieved. The
above table projects the balance sheet for the next five years.
Liquidity Ratio indicates a good debt paying ability and a number of days required to collect
receivables, sell inventory and to pay account payable that is consistent with best business
practices. Liquidity is critical for building a strong and sustainable foundation for the future
growth of the business. For short term liquidity, three key issues are managing cash during
seasonal cycles, setting sales and credit policies and financing receivables.
Solvency Ratio indicates good capital structure and adequate creditors protection from default
on interest payments.
Adequacy Ratio indicates good ability to generate operating cash flows in relation to net
income and a good ability of sales and assets to generate operating cash flows.
These ratios show that the business is expected to have a strong financial condition. The
profitability of the business is excellent and will gradually increase over the next five years.
Conclusion:
The proposed business plan helps achieving sustainability objectives of garment companies
through recycling processes. The recycling of garment industries is crucial and is gaining
increased awareness among the stakeholders. Such kind of recycle process reduces the
landfilling caused due to garment wastes and helps maintaining an eco-friendly environment.
As per the estimates, the business will start generating revenue at the end of first year of its
operations and will become profitable business in the upcoming years. Hence it is a promising
business with higher ROI in a short span of time which will attract the investors.