REPORT ON: SECTOR ANALYSIS: PASHMINA NEPAL
EMERGING SECTOR PASHMINA: A COMPREHENSIVE STUDY [CASE STUDY: INDUSTRIAL ANALYSIS “EVEREST PASHMINA KNITTING AND WEAVING INDUSTRY]
11 Prepared by: ASHISH GHIMIRE DEPARTMENT OF INDUSTRIAL AND PRODUCTION ENGINEERING SHAHJALAL UNIVERSITY OF SCIENCE AND TECHNOLOGY, BANGLADESH, SYLHET-3114
[email protected]
EMERGING SECTOR PASMINA, A COMPREHENSIVE STUDY NEPAL ABSTRACT: Until opportunity is grabbed it never knocks again and again, Nepal is highly potential country for the production of goat fibers that is used for making garments and decorative house hold, and in spite of this all we hardly hear the name of Nepali export in world market. In reality Nepal only covers below .3% of total world market, Because of other various obstacles. Nepali industries are hardly surviving with their products. If all responsible factors would be managed well, pashmina sector of Nepal would be pinnacle of Nepali business. This paper includes a comprehensive study on this sector. .
CONTENTS INTRODUCTION………………………………………………………………………….1 PASHMINA AND OTHER YARNS……………………………………………………..1.1 MANUFACTURING OF PASHMINA CLOTHINGS…………………………………..1.2
WORLD MARKET………………………………………………………………………..2 NEPAL……………………………………………………………………………………….3 PASHMINA SECTOR IN GENERAL………………………………………………….3.1 POTENTIAL FOR PRODUCTION OF RAW MATERIAL…………………………….3.2
CONSTRAINTS…………………………………………………………………………..4 SOLUTION………………………………………………………………………………….5 INDUSTRIAL SENERIO: EVEREST PASHMINA KNITTING AND WEAVING INDUSTRY…………………………………………………6 INDUSTRIAL PROFILE…………………………………………………………………….6.1 INTRODUCTION…………………………………………………………………………….6.1.1 LOCATION……………………………………………………………………………………6.1.2 PLANT CAPACITY…………………………………………………………………………..6.1.3 PRODUCTION OVERVIEW………………………………………………………………6.2 SOURCING………………………………………………………………………………….6.2.1 PRODUCTION PROCESS,FLOW CHART………………………………………………6.2.2 SHIPPING……………………………………………………………………………………6.2.3 OBSTACLES OF INDUSTRIES……………………………………………………………6.3.1 MANAGEMENT OF OBSTACLES………………………………………………………….6.3.2 COMPARATIVE STUDY GOYO CASHEMERE AND E.P.K.W PASHMINA ………….6.3.3 PHILOSHOPY AND MANAGEMENT EPKW………………………………………………6.4 INTRODUCTION…………………………………………………………………………….6.4.1 QUALITY POLICIES…………………………………………………………………………6.4.2 ADAPTION OF CHANGES FOR GOOD………………………………………………….6.4.3 SCOPES………………………………………………………………………………………6.5 CONCLUSION……………………………………………………………………………….6.6
CONCLUSION……………………………………………………………………………….7
1. INTRODUCTION: According to the oxford English dictionary “pash “comes from the Persian word for "wool", refers to fur of certain Tibetan animals, particularly goats. In contrast, pashmina, as we see it on the Internet and in fashion magazines, is a textile blend of silk and cashmere [1]. Pashmina is not the esteemed blend of silk and cashmere; as a matter of fact cashmere itself is not a synonym to pashmina. Pashmina is the higher grade of cashmere. Pashmina comes from the inner coat of the underbelly and the neck of the animal (goat), which are softest in the animal's anatomy (where the fiber is longer and denser), where as cashmere comes from the other parts and are coarser compared to pashmina [2]. In its raw form pashmina is softer than cotton and as a fabric it is warmer than wool and smoother than silk, thus makes it one of the most desirable fabrics. Pashmina has been used by highland communities like the “Thakalis” and “Gurungs” for daily wear since the time unknown. Only in the last two decades the international fashion discovered pashmina [2].
OBJECTIVE OF STUDY:
To gather the information on pasmina sector in world market. To identify potentials of production of own raw material. To identify obstacles and challenges of pashmina sector. To identify possibilities of managing obstacles. To identify current industrial position in Nepal and its production system. To identify possibilities of replacing traditional plants with modern plants. STUDY PROCEDURE Firstly basic ideas have been collected on sector and study has been performed by all published official and unofficial papers and special promotional videos of different industries. Based on management, designing system, quality and process technology, questionnaires were made and industry was visited. Mostly all industrial facts were gathered through direct observation of production and all the data were collected from already published study paper performed by „INTERNATIONAL TRADE CENTERE’.
1.1 PASMINA AND OTHER YARNS: The accepted international standard for cashmere includes anything less then 19 micron thickness, at a minimum of 30 mm in length. No standards are set for a maximum length [3]. TABLE1.1 (USA STANDARD FOR PASHMINA FIBER) Thickness
varies from 11 to 19 micron
Length of the fibers
that varies from 25 mm to 50 mm
Shape of the diameter
Cashmere is round shaped and wool is oval shaped
Structure of the fibers
Cashmere has regular smooth scale like outer structure Of the fibers, while wool has a very irregular scale like outer structure
Felting of the fibers
Cashmere will not be felt while wool can be felt.
1.2 MANUFACTURING OF PASMINA CLOTHINGS: Fiber is collected either by shearing or combing the animal during the molting season. The goats molt during the spring season for few weeks. In China and Mongolia, the down fiber is removed by hand with a coarse comb, while in Iran, Afghanistan, New Zealand and Australia animals are sheared. Hand sorting is followed for coarse hairs that is molted after which the fiber is washed to remove dirt and grease gathered in the collection process. The scoured material undergoes a process called the dehairing, which removes the coarse outer guard hair. At the end of this process, the pashmina is ready to be spun into yarns for weaving and knitting purposes [2].
2. WORLD MARKET: U.S.A, Canada, U.K, EU and Asia are the markets where pashmina products are targeted for. On the demand side the market prospects are not as unfavorable as feared earlier because of unfair competition from others suppliers. International demand for comfortable lightweight knitted as well as woven garments and accessories is consistently strong. In 2005, Nepal‟s exports of Pashmina products added up to US$ 21.4 million [3]. Following figure illustrates consumption of cashmere (pashmina) pullovers by major importers, chart below shows increasing trend of demand and supply.
3. NEPAL 3.1 PASHMINA SECTOR IN GENERAL: In 1997 alone Nepal exported Rs 3 million worth of the fabric, and by 2000 the figure had risen to more than Rs 5.6 billion. The industry employed over 50,000 people and made up at least 82 percent of all handicraft exports from Nepal in 2000-2001 with manufacturers producing everything from scarves, shawls, blankets and mufflers to dressing gowns [3]. In 2006/07 exports plummeted to below one-fourth of the peak records in early 2000. The main reasons cited for this sudden decrease are the unhealthy competition from neighboring and other countries [2].
For production, private sector entrepreneurs have gradually become more quality conscious and invested heavily in the process of modernization of weaving and introduction of knitting mechanisms. Well-trained semi-skilled and skilled labors, supportive and logistic services are still available in the country. Instead of this, the country‟s production capacities are heavily underutilized. The Chyangra cashmere and silk mixed products produced in Nepal include shawls, stoles, scarves, mufflers, blankets, pullovers, etc. Some of these items are embroidered, shaded, beaded, printed, and painted to enhance sheen, shine, value and fashion. Production of these items demands annually about 400 MT of Chyangra cashmere yarns and 200 MT of silk yarns in Nepal. Unfortunately, more than 95 % of the industrial yarn requirements are being imported from China, Mongolia and India. In light of the country‟s needs, Nepal‟s existing domestic production of about 40 MT of Chyangra fibers and 4 MT of silk yarns are considered negligible.[3] Figure 3.1 USA market for pullovers made up of pashmina.2005
Fig USA import of pashmina pullovers form different country.
Manufacturing firms in Nepal working for production of pashmina have created good scope for collection of revenues and for socioeconomic development of Nepal. Production and supply of pashmina garments from Nepal to international market is negligible, figure above illustrates that bellow .3%of market share of Nepali pashmina garments in USA market (2005).
3.2 POTENTIALS FOR PRODUCTION OF RAW MATERIAL: The average potential production for pashmina fibers amount to some 200 grams per year per adult animal with average productive age of eight (2 to 9 years). According to a recent estimation of 2007, 200,000 adult Chyangra goats and some 60,000 baby goats exist in Nepal. This means a production potential of some 40,000 kilos raw fiber per year.[3] At the price per kilo for raw fiber paid by Chinese traders of US$ 30, this would come down to US $ 1,200,000. The potential turnover per year after washing and de-haring of the fibers, however, is about three times of this amount. Global market prices for washed and de-haired cashmere fibers in July 2007: TABLE 3.2 GLOBAL MARKET PRICE FOR FINE PASHMINA FIBER TYPE
Selling price ($)
Chinese – White
100 per kilo
Tibetan Brown
97 per kilo
Mongolian Brown
85 per kilo.
4. CONSTRAINTS Spiral down trend of export for pashmina based products from Nepal to world market is not only a result of carelessness of exporters alone nor it is because of technology. For development of better production system and for boost in pasmina sector, short coming on different level should be considered and a firm should allocate every resource in efficient manner. Farmer level shortcoming: Remoteness of the area where chyangra goats are raised had created a vast gap of farmers with their buyers. Genetically deteriorating size of Chyangra. Lack of knowledge, unfamiliarity with technology. Company level shortcoming: Inconsistency in the quality of production of pashmina goods. Problem in vendor selection Problem in sourcing of raw yarn, either because of financial reason or because of poor management system. Lacking of strategy in meeting the demand. (unable to meet the demand every time) Inadequate market promotion program. Rigidity in technology and limitation in research, development and creation. Governmental level constraint:
Tax regulation and procedure is not export oriented. Power sector are underdeveloped, pool of energy crisis Ill transportation and communication services. Lack of institutional knowledge and technological knowledge providing services. Lack of promotion and focus on socioeconomic boost of nation.
5. SOLUTION On integrating effort from different level, Nepal will soon be able to establish its one name for superior pashmina brand in global market. Establishing spinning mills in Nepal for cashmere yarns and silk yarns will make it possible to guarantee pure Nepalese Pashmina product of superior quality. The available and valuable raw materials can also be transformed into yarns by hand, as well as by simple machines. Focus should be given for promoting this scope. Through the creation of a certified trademark new promotion and branding activities should be lunched for pure pashmina products (as the logo already exists for cotton and merino fabrics). Special market promotion efforts should be given, including participation in selected international trade fairs and buyer-seller meets etc. Nepal needs to set up its own testing laborites for fabric to be managed by a competent and independent authority, so producer would be able to ensure level of quality to its buyers. Government should be conscious, should lunch consistent long term plan with clear policies for the development of pashmina sector and should promote it by formulating trade procedure with acceptable tax regulation. Marketing platform should be created for the farmers to sell their clean cashmere fibers at market prices, and to eventually encourage them. Training and knowledge should be provided to farmers to ensure better level of satisfaction and for giving good value of their effort. Banking sector and financial sector should give their eye to create an environment of investment to encourage entrepreneurship. Industry should seek for advance affordable manufacturing techniques, and should stress in management rather than workers‟ ability for better product that can beat competitors.
6. INDUSTRIAL SCENERIO “EVEREST PASMINA KNEETING AND WEAVING INDUSTRY” 6.1 Company profile 6.1.1 Introduction Everest pasmina is a leading name among the industries manufacturing pasmina product inside the territory of Nepal. Continuous effort of management has made Everest pasmina to stand in front for exporting quality product in terrific and competitive market. EPKW produces on demand, its product are not only limited to jacket, pullovers, sweaters and shawl. It has enlarged its product variety even to indoor decorative pieces. EPKW serves to give whatever its customers‟ desire. 6.1.2 Location Production plant is located on jhuruwarashi vdc -7; half an hour drive from Kathmandu international airport; well Region facilitated with commutation, transportation, Water for industrial use an even for drinking, open space, availability of semi trained and skilled labor, and good cultural environment has given perfection to selection of site.
6.1.3 plant capacity Not exact data had been collect for determining capacity but rough estimation identifies that the industry is able to produce 35,000-40,000 pieces of shawls and 8,000-10,000 of knitwear per month. Industry is running nearly with working force of 600 skilled and semi skilled employees. It is medium sided production firm with a capacity of producing 6-8 types of different product with varying volume a day.
6.2 Production overview 6.2.1 Sourcing
Pashmina yarns are raw material for the production of pashmina, marketing department collects the yarn from neighbor country china. Information on specified raw material is gathered and order is placed. After receiving raw thread, sample is selected and send for lab test. Dying is performed incase of necessity. Dying material and colours is imported form Switzerland. All other consumption material for running industry and machine parts are received from local agents by mean of publishing tenders.
6.2.2 Shipping Final product are then packed, packaging is done considering all the hazards that may damage the product while shipping. As almost every product are for export, industry is responsible for delivery in due period, product are shipped to courier office and then finally cargos are shipped by aircraft to the destination,
6.2.3 production flow chart and process:
Rejected
Knitting Rewinding
Rework
Inspection
Accepted Press
Mending
Rough stitch
weighting
Dying Rejected Work
Inspection Accepted
Hamming
Press linking
Final finishing
Accepted Steam press
Inspection
Fig: Flow diagram of production process
Packaging
6.3 struggle for existence 6.3.1 obstacle of industry Unstable political situation is what drifting the production of EPKW downwards. Usual strikes of transportation, Unacceptable governmental regulations and unfair policies are limiting the efficiency of industry making it work under the actual capacity. Energy crisis, load shedding and financial graft by political pressure groups had created an unpleasant environment for the existence of corresponding industry. 6.3.2 management of obstacle Considering different obstacle industry is well managing and controlling its all activities for the better satisfaction of its clients. For due time supply of product industry have kept higher inventory level of raw material considering the fact of longer lead time for receiving raw material because of usual labor strikes and unstable political situation. Although there isn‟t any testing laboratories for fiber in home country. Industry tastes its raw material in foreign laboratories for ensuring quality. For overcoming power crisis industry have setup its own diesel plant for electricity, operating on cost nearly 3 times greater than normal hydropower electricity per unit. 6.3.3 Comparative overview: goyo cashmere and Everest pasmina. GOYO CASHMERE (1993) is world renowned Mongolian industry, fully equipped with complete chain of machineries made in USA, Italy and UK with up to date technology for producing clothing‟s of pashmina. Goyo produces yarn in its own plant collecting fiber form hut of every farmers. It owes its own spinning mill equipped with computer control with a capacity of producing 160 tons of yarn annually. Goyo is the first industry in the history of Mongolia to introduce and implement cold dying method in mass production. Its dying shop is equipped with Italian machine having electric dying, blending and drying technology which is capable of bleaching in 1007 different colours.[4]
Comparative summary of two industry, one “Everest pashmina knitting and weaving industry” inside territory of Nepal and another Mongolian industry,”goyo cashmere” is figured below:
TABLE6.3. COMPARISION EPKW Job shop-batch External Varies on demand 120,000kinttted (annual) Total inspection(tqm) Manual On demand High temperature Manual Low
GOYO mass Internal same 350,000kintted (annual) Statistical tool(tqm) Semi automatic Self and on demand Low temperature Semi Automated Comparatively high
Abroad
self
BASIS production Raw material(sourcing) production capacity Quality control manufacturing Product design Dying technique Quality control system Product cost for same quality level Fiber testing lab
6.4 philosophy and management EPKW Everest pashmina is not only expecting for huge sell rather it works for good value of its product to its clients. It believes only a satisfied workers can produce quality products. 6.4.1 Introduction Though Management system of EPKW is common one but with all dedicated bodies and skilled function today EPKW is being able to survive on unfavorable environment. Management effort has been able to create the feelings of ownership on workers, every worker are conscious of organizational future. Transparent flow of information among top and lower management units as well as ground level have given least response time for the fulfillment of all possible workers‟ need and had raised the opportunity of shearing ideas among different levels.
Organizational structure of EPKW is illustrated below: CHIEF EXECUTIVE Marketing department
Finance department
Human resource department
Sales representative
Production department
Labor relationship
Work manager
Recruitment and safety
Production engineer
Customer relationship
Material manager Purchasing representative Fig: organizational chart Everest pashmina knitting and weaving industry
Exporters of Yarns abroad (China, Mongolia, India)
Importers of Yarns/dyeing material
Procurement (INDUTRY)
Labor, work force,(Nepal)
Production floor,
Supplier abroad
Other consumption material supplier (Nepal)
Weaving, processing, quality control, packaging, Packing Materials Suppliers
Agents/buyers/brokers Specialized importer abroad
Fig: Everest pashmina knitting and weaving industry (supply chain)
6.4.2 Quality policies With a consistent effort for quality outputs, study found EPKW industry being focused on satisfaction of labor and efficient production system, EPKW is working with the motto of providing value for what customer pay for. Because of low investment potential and limited capital of founders, today EPKW Industry is implementing continuous but small level of improvement policies and effort with minimal capital investment and even no investment. Industry seems improving with this philosophy which actually resembles with strong quality improvement tool named “Kaizen”. Study found implementation of some approaches of Deming‟s principal in management of industries and it‟s every day activity. Industry is consistently making its management with more effectiveness and efficiency. Consistent towards goal of industry, and continuous commitment in achieving predetermined level. More conscious on motivating workers with evaluation of their work rather then creating fear of loosing jobs.
6.4.3 Adaption of change’s for good Some suggestions made, that can lead EPKW to peek on the basis of study are listed below. Industry should follow statistical quality control method rather than inspecting whole product. Even better if automated quality control method for long term. Here automated quality control system simply mean product scanning and enlarged picture analysis of product in display which is actually possible with lower investment. Industry should step out for vendor certification and should select vendor for long run to ensure quality of incoming raw material specially yarns in comparatively low price. Industry should make a study for redesign of its layout and its better to invest on efficient forecasting methodologies to utilize plant in its off session with common product.
It’s better if industry would stress on establishing quality circle of workers on working floor for determining quality problems on root level and solving them. Well efficient product development, and research team for introducing own design will augment the company performance. Management of industry should be more dynamic and should be familiar with advancing technology of similar product, production system of foreign competitors.
6.5 Scopes
It would be effective if industry would have manage to train people to work in its own plant during off hours so that it can facilitate hiring skilled workers and firing them on the time when orders are low. Own commercial training institute of industry seems helpful in aggregate planning and it can be a sector of business expansion as a new service firm.
Even this time EPKW is existing in world market with gigantic competitors like China with its imported fibers, it is possible to cover more than 50 percent of total market demand if with government owned and domestic spinning mills‟ compliance could be established.
6.6 Conclusion: Everest pasmina is yet to meet its organizational goal but it is hard to cope with ever-changing market demand in competitive world due to unfair competition, discouraging governmental policies, unstable political situations and money grubbing habit of parties. Industry alone is far able to cope with all these problems, nether it can go beyond governmental regulation, nor societal norms. In case of good governmental support and societal promotion, EPKW will be able to stand with Nepali pashmina brand on global market.
7. CONCLUSION: Although Nepal is privileged with suitable geographical conditions and favorable environment for the farming of mountain goats and production of pashmina fiber, we are the poor supplier of pashmina garments to the world market so far. Though the use of pashmina in Nepal had been emerged century ago, till today we are not being able to commercialize it in world market efficiently. Increasing market demand of pasmina clothing‟s booth as summer wear and winter wear have created ample scope but unless effort is done by every level, starting from farmer to government, it is impossible to make competitive position in world market and even its fool to think about Nepali brand.
References: 1 industrial profile, company’s website& wikipedia.com th
2. NEPALI TIMES (9 February 2006) 3. Nepal-chyangra cashmere and silk product(Project NEP/A1/01A A project financed by the EU and ITC under the Asia Trust Fund-2007) PAPER INTERNATIONAL TRADE CENTERE 4. PROMOTION VIDEO ‘GOYO CASHEMERE’.
