Feasibility Study On An Export Oriented, Knit Wear Garments .
Department of Business Administration
Feasibility Study On An Export Oriented Knit Garments
Submitted To DR. TANVEERAHMEOCHOWDHURY Instructor Department of Business Administration East West University
Submitted By MD. JAHANGlR HUSSAIN MIAH TO No: 1998-3- j 0-068
May 02, 2002
Ac k no\\ IcdgCIllC:111
Acknowledgement
.-".ch.no\\ JcJgc m":!11
Acknowledgement : It has been a pleasure and an honor to show my heartiest respect to Dr. Tan veer Ahmed Chowdhury, for giving me the opportunity to work for this study. Hi s enri ched & powerfully structured discussion has been a great help in each step of thi s research writing. I show my deep respect for the extended helping hand that he provided for the research.
I would also like to acknowledge the following personnel for helping me in the
research report:
I . Mr. Kutub Uddin Ahmed
(president, BGME A)
2. Mr. Abdul Mannan
(Chainnan, Mannan Group)
3. Shahriar Khan
(Secretary, Sinha Group)
I have been fortunate for the support and encouragement that I received throughout the progress of the research project from my friends Sasha, Shajahan, Rumana, Ishtiak, Mahmudur Rahman, Habibul Islam , Md . Salauddin and
Hos~aln
Md. Ami r of East West University . I am very grateful to all of them . their heir and support made it poss ible fo r me to lead the research mto a de/o
sr%
,
Market Aspects
Item Wise tountry's Export - 1996-97
ofumlfuxt
7%
mTea 1%
• Iteam
1000' 7Yo
7% []lmm4%
lIte ;'/ Ylo j
I
oRa¥nre oKritvm" 17%
,
Otmrt
51110
• Chni:a furlrts
1
1_ _ _ _ _ _ _ _ _ J
Market Aspects
Item Wise Country's Export - 1997-98
ofumt furl; \ 6%
1000atl
PrcdI1s / 1%
\
l.beGxxt
5%
'\,
\
, \
o l.fahr
1%
,I \
\
T
mlea
\
/
4%
lam7%
r------··· -ItmTea :
: Oln .0 f~nd! OmUlt
o Knit\'ill" I.be
11te ?>Io
OU3ln
I· ·becrot i0
HU2tll rUX8
I
OKnitV(3" 18%
~~ai~U:h1S
It is apparent from the data and graph that the country's foreign trade is increasingly dominated by the garments sector. The domination increased evelY year. Knitwear as well as Woven Garment is increasing very fast from year of 1986-87 when knitwear constituted 1% of foreign trade whereas in 1997-98 the contribution of knitwear raised to f ie level of i 9% of the whole foreign trade.
A feasibility sllldy on an ex} 'ort oriented knit '!lear garments
20
Market
Asp~ct s
3.3 Knit Wears:
Knitting is the art of making Fabric in which the loop, a segment of yarn disposed in the fOfm of a round fold , is the principal element. The structure of every kn itted fabri c is characterized by successive rows of loops drawn through series of loops In the production of the fabric this operation can be continued definitel y, and in many tubular and flat fabrics the stitch pattern is complete on one row of loops all succeeding rows being duplicates of the first. The knit fabrics known in common are Single, Jersey, Interlock, Pique, Lacosta, Milano, Terry and Rib etc. The major types
or knit
Fabri cs requirement and their percentage in 1998-99 (hased in Mt
Ton consumption calculation on finished product) have shown in the table and ehart in the next page.
There are various type of finished products of knit wears like T-shirts, Polo shirts, Tops/Trousers, Jersey, Pullover, Jumpers, sportswear' s, jackets, ot her garments, under garments night dresses and other.
!I j L'{{S !iJ'/ U I' Sl1Iell ' on af, export ortented knit wear ?,(1YmpYl r.,
")
,
_ I
Market Aspects
Table IV
REQUIREMENT AND LOCALLY SUPPlED DURING 1998-99 (In OO'TON)
ITEM
REQUIREMENT
PERCENTAGE
JERSEY
589
0.52
PIQUE / LACOSTE
287
0.25
RID
40
0.04
INTERLOCK / 8 LOCK
144
0.13
45
0.04
17
0.02
1122
1.00
FLEECE / TERRY
' .
FLAT KNIT
REQUIREMENT OF KNIT FABRICS TYPES (IN PERCENT) 1998-99
• Fleecerr erry 4% C Interlockl8 Lock 13%
gFlant Knit 2%
_Jersey • PiqueJLacoste
CRib CRib 4%
[J Interlock18 Lock
• Fleeceff erry • Jersey
II Flant Knit
~: 2%
• Pique/Lacoste 25%
A feasibility study on an export oriented knit wear garn'mts
22
Market Aspects
3.4 Advantages of Knit Wears:
Because of Casual and soft in nature as well as inherent good properties such as hygienic properties, fashionable design and color knit wears have become a popular wear allover the world, knitwear's are informal but fashionable usually with short sleeves. knit vvears are commonly made of knitted fabric s of Sin gle jersey, Ribs, interlock , Fleecc, terry , Lacoste, pique, Milano, honey comb etc. dUl' to the specifications in raw materials by suing lower count of yam , construction or j fabncs and stitching, knit wears posses certain propertles whi ch are es:;c nl !al fur good appare ls, some special advantages or knitted wears arc given ix: lo \\
~
I)
Knitted garments are softer and more comfortab le
2)
Knitted wears / garments are usually used as underwear fabri cs i.c . lIse d Cor sPit skiing abrasion.
3)
Usually lower count of: am is used for kni tted
t~l bnc:-,
so. l\flilted has more
socking capability. 4)
More profitable production can be made due to lower project cheaper management cost
5)
KnitteJ wears can be handled more easily while using and washing.
6)
Its
mark~t
price is
comparativ~ly
cheaper.
A /easihili/1' study on an export oriented knit wear gal ments
co~t
and
\ larf.. market
Ih:- I ubi !.: hc!\'\\
shows the knitv\'ear ex pnrt fon-n Bunglack :;h from the \ear I(jt)() and the chart shows the growth
In
the next page .
A le as/hi!tI I' s/udy on a/7 export rme/7 l ecl ki711 we ar gam/(: 11I.1
i th.
-))
11) !'!'I~-'I ;\
Market ASpectS
Export of Knit Wear from Bangladesh
l0000r-------------------------------~~~
90C01------------------- -- ---------------
8ID -/-----.---JOCOr---------------------------·~~---
6lO r--------------------------~
00 1(O r-----.-.-------------~~---
~ ~ r-------------------3OCO ~---~-----~~~------
am l-3
1:;6.3
ESTlMA TED FINANCIAL EXPENSES Contd.
(NTEREST PAYMENT
I
l I
T
--
Ii
year
2nd year
IR5 .YO
I(,() X:l
lsI
-
PI ()lecl l ,()an
3rd year
--~ 141 77
r---
! IDCI' i----Corn Bank 13orro\\ rng
I
4th 1
year
12 17
Ion
9.67
5th
I
YI'ar
6th
year
-1--It)') (1 ~--I ')ll 57
12X.70 -
I I
I
R.42
7th
__
.-:----._- _.
7 18
5.93
I
8th I
9 th
YC:II' I year - -+ 7 1.51) 52 ·13 !
I
10th
y (':11\\ 1'
II
\1)
.
1--- 4.68 143
--. 10.26
15.00
16.26
17 .59
19.2387
19 .2387
19.2387
19.2387
208.3
192.8
173.7
154.7
136.0
115.7
95.4
75.1
19. .'--
Total
-1 jl:'oslhl/IIY slwiy on an exporl oriented km t wear garments
91
Annexure
ANNEX - XVII
CAPITAL (IMPORTED) MACHli'lERY LI S ]
KNITING SEC
WEC
NOS. BRANDICOllNl f.n
«: "
Smgle Jersey Machine :
IX '* 2*24 (j
~ 'Ii
4 Cam Tracks Suitable for productlon
2(P2*24
(jcml an~
of sjersey. pique, 2 thread Oeece
G
MV-3 .2. Maycr &
and mechanical stripe
22"*2*24*
Germany
all Machine with standard equipment including :
G 24'-*T24
Germam
- modular side creels fully tubed
G
MV-1 2, Mayer &
- inverter
26"*2*24
GcnmInv
- lubrication UiwavefPulsollic - computer in main panel for control
G 30"*2*24
Cierma m '
- positive storage yar feeding device
G
Relallll. Ma)('J' &
-, 2 Ma\ er
MV-3 .2. Mayer &
Rci;!llIt Mayer
C IC
CIC
CIC
i: asth liiry study on an export oriented knic wear garments
10 1
A nnc'( urc
AN NEX - XXIIl
BREAK-EVEN ANAl,YSIS
I.
SALES REVENFE (3RD \ EAR) I. L\C I k.. . .. J~ 7
2.
TOTAL PROD UCTJON,~DMINISTRATIVE AND SELLING J1:XPENSE~ :
B_L_E+-F_IX~D j
- - - - - - - -l'-T-E-M --==_-_-___-_-_._ _,_ +-_T_O_T_A_L-t-_V_A_RlA ___
}-I
-+-___2 _ 5_1_76_1-+-_ _ 2_ 5_1_76_ 1 ____ ~J
RA W AND PACKING MATERIALS W AGES AND SALARlES
2204 I
STROES AND SPARES - - - - - - -_ . - - - - - ._-- P~R AND MAINTENANCE
~
2298 1
T-
_ = 2298
= -1608 6
1118
1118
CARRIAGE IN WARDS
890 - - - + - --7-74-S-+--
WATER, POWER, FUEL, GAS, LUB .
OTHER MANUF ACTURING OVERHEAD -
1-
_._----
--
--
! TELIF AX/TELEX ETe.
-
---.
~ ____ 4043
~ A~M I N/G~~ERAL SALARY ____ _
- _I
1
01
--~
890 - 4647
8080
AUDIT/CONSULT ATlON FEES
120
--
.-
BANK CHARGES
0
8695 1
-t-·-~4B
ENTE RTAIN
------i AD/ PROM/DONATION EXPENSFS i_ ' ___ 1 MARKETING COMISSIONS -----FUEL/DIESEL/CARRYING
400 --4347
~
. _ - - - - - - -- -
16X
184 -
192
-=-:-l
180 .
---+-
14
----
-.-
(12 : --- 1
INT EREST EXPENSE
199.9 7
184.61
NET PROFIT BEFORE TAX
79230
109808
119U7t _ . \28~ 13 ~
NET PROFIT AFTER TAX
792.30
109808
1191.3 7
1 - --
-f---
148 49 '
r------.~ 1286 . 13
~.
i
FINANCIAL RA nos: HEM
2002
2003 _ _ .~0~
GROSS PROFIT TO SALES
33%
34%
c---------------- -------------
t· '--
--~O()5~: 11%
3J %
----------------------~------_4----- ------
NET PROFIT AFTER TAX TO GROSS SALES RETURN ON INITIAL EQUITY PROFIT TO NET ASSETS
26~2% 1
23A2%
25 .70%
132.05%
18301%
198 .56%
21436%
40%
55%
60%
64%
OA20876629
0 583310033
0 .63286348
0 .68320425
RETURN ON INVESTMENT
I 1
26 . 10% 1
BEBT SERVICE COVERAGE 332 4.35 (TIMES) , _ _ _ _ _ _ . _ _ __ _ _ _ _ _ _- 1 . . . _ . _ _. _ -1 _ _ . _ _ _ _ _ _- ' - - _
4 .84 ___
539l 1
_
Calculation of Debt Service Coverage Ratio: - - - - - - - - - - - - - - - - - - - - - - - - - - - -- - - - - . _ - - - - - - -
INCOME :
PRE-TAX PROFTT r AD ___ D__D_E_P_Rl _·_C_IA_T_I_O_N_fWRl ___o_ T_E_O_F_F_--j-C"-
792 30
1098 .08
--------~
-49
-----------------------+------~------~------~-----~-----
~~T_A_L_A_S~ETS______ _._L_2_19_2_6~_
~
1
I
LlABlLlTIES AND CAPITAL
I
-
-
1
144 / I '
15197
1
16360
I
1
--.- -
63000
---- -.-1--I
6300
1
63 \JOO
- - --------- ------- -- --+--- -+ - - - DEFERRED INTEREST
9600
~~~l-~--E-D-~~-~~~~-~-.-__--_--_1-· ------
I-
I TOTAL LIABILITIES AN D 2 19267 1 CAPITAL ~ .___ _____ .__________ 1 _ 1 _ L_
8640
7680
b720
576()
273661
145153
422391
L_ "O_7~ .N
-5-8-60-9--+--_-14-~-72-!-+-_-z:4~~l-"~44 '0 i
I
111(1 \
(J !I
(In
c:x[l()rt onc:med kmt
HT(ir
f;armenrs
106
Annexure
Gantt Chart
~ ·e~slhl/iry
srlldy on an export oriented knit wear garments
GANTT CHART Proj ect Timetable and Status
1- -·-Acti\~itie~~- f--------
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BiblJograph\
Bibliography
Bibliography
John A. Pearce alld Richard 8. Robinson JR . 1997. Strategi c Management Readiness lor the networked world, A guide for developing countries. -;
FY 1998 C'ountTy C'ofnmercial Guide . Bangladesh Report prepared
by l J.s. embassy
Dhaka, released '\lIgll st 1997.
Fax message of'The World TB" dated 28/01 /99 Stanley B. Block. Fundamental of Financial Management.
6
George Foster & Srikant M Datar, Introduction to financial Accounting. \Valter T Hanision, Financial Accoun tmg Horngren, Sundem, introduction To Management Accounting. Roger H Hannanson, Accounting Principle.
10
Ray H . Garrisioll, Managerial Accounting. \.\ ww .
Rd Research . Com .
12
Search Engine
I:;
-'\ttavista. com.
I . Googie.com.
_ _.....==::.:...Si:.i,!!!!!:IU;.:. !'..!.fJlI (Ill (!I:port Orien ted
knit wear j;a rm enfs
10 7
May 02, 2002
Dr. Ta nveer Ahm ed Chowdhury Instructor, Depanment of Business Administration r~ ast West University
Sub: Submission of Final Project (Feasibility Study).
Dear Sir: Here is the report on " A Feasibility Study on an Ex port Oriented Knit Wear Garments" that was assigned by you for the course BUS-498 to fulfill the partia l requirement of my BBA program . I have done my level best to complete the report in time and with the quality of your expectation . The whole experiences of this proje~t enabled me to get an in sight In to the real life situation . I have really enjoyed workmg on this project Hope the report will be meeting your expectation and standard. I have tried to make the report a comprehensive one, within the given time. Any sort of suggestion regarding the report will be greatly acknowledged and I will feel gratified ifmy project serves its purpose. I shall be available to answer any queries for clarification.
Sincerely,
Md. J~lr Hussain Miah I J) ,Alo: JY9({-3- J(J-()6({ BBA
