INTRODUCTION
Weaving is an ancient Indian tradition tracing back its origin to the 16th century. The Indian weaving industry is a rural-based, labour-intensive handicraft industry. It has conventionally been one of the most promising sectors of huge employment. The buyers highly prefer handmade weaved products because of their originality, colour, quality, design, and durability. With the Indian doormat industry majorly based in rural areas, the rural producers of doormats have a competitive edge due to the availability of cheap labour. The manufacturing of weaving products makes a remarkable contribution to the national GDP and even to the export revenue. In India, the most common meaning of ‘torn cloth’ is encountered either as a waste byproduct in the textile industry (post-industrial) or as the end-of-life residue of fabrics in use in households (post-consumer). For generations, this form of textile waste, torn strips of cloth, has been repurposed as colourful twine for tapestry or household craft projects, or hand-loom woven into floor mats and wall hangings
MARKET POTENTIAL
There are approximately 5mn looms in the country. India has 1.8mn shuttle looms which is 45 percent of world capacity, and 3.90mn handlooms which are 85 percent of world capacity. The constant inclination of households towards modifying and beautifying their homes is leading to a growing demand for doormats. The doormat and carpet industry is predicted to grow at a CAGR of over 5% between 2021-2026. During April-November 2019, exports of weaved products from India stood at INR 645 billion.
BUSINESS ECONOMICS
FIXED CAPITAL (One Time Expenditure)
MACHINERY & EQUIPMENT | AMOUNT (in INR) |
Interlocking Machine | 15,000 |
Frame, Scissors, and other equipment | 25,000 |
TOTAL | 40,000 |
WORKING CAPITAL (for a 2-month cycle)
RAW MATERIAL & CONSUMABLES | AMOUNT (in INR) |
Cloth | 16,000 |
Other raw materials and consumables | 16,000 |
STAFF AND LABOUR | AMOUNT (in INR) |
Entrepreneur’s Salary (@ INR 10,000/month) | 20,000 |
UTILITIES & OTHER EXPENSES | AMOUNT (in INR) |
Electricity Bill @ INR7 per unit | 1000 |
Water | 1000 |
TOTAL | 54,000 |
FINANCIAL SUMMARY (Annual)
FINANCIALS | AMOUNT (in INR) |
Fixed Cost | 40,000 |
Working Capital (for each cycle of 2 months duration) | 54,000 |
Total Enterprise Set-Up Cost | 84,000 |
Revenue (per annum) | 6,00,000 |
Total Expenditure (annual working capital) | 3,24,000 |
Enterprise Profit (per annum) | 2,76,000 |
Payback Period (in months) | 2 |
BASIC ASSUMPTIONS
- Production capacity: 50 kg per day
- Working days: 25 days per month (8 hours shift)
- The business operates throughout the year
- 100% of the goods produced are sold
- Loan not taken into account
Note: All figures mentioned are indicative and for reference purpose only. Development Alternatives Group bears no liability for accuracy. For any further information, please contact Development Alternatives on +91-11-2654-4100 or +91-11-2654-4200.
Star Entrepreneur
Najjo started her doormat weaving enterprise in 2017 in Bhadohi, Uttar Pradesh. She availed a loan from HDFC bank worth INR 40,000 through which she bought a mat weaving machine. Through her enterprise, she could:
- Increase her annual income by 90% in 1 year from INR 60,000 to INR 1,14,000 annually
- Hire 1 full time assistant