Swot Analysis of Textile Industry

The SWOT analysis is an extremely useful tool for understanding and decision-making for all sorts of situations in business and organizations. It is a strategic planning method used to evaluate the Strengths, Weaknesses, Opportunities, and Threats involved in a project or in a business venture.

STRENGTH

Raw material base

Mauritius has high self-sufficiency for raw material particularly natural fibres. Mauritiuss cotton crop is the fifth largest in the world. Mauritius textile Industry produces and handles all types of fibres.

Labour

Cheap labour and strong entrepreneurial skills have always been the backbone of the Mauritius textile Industry.
Cheap and ample supply of labor strengthens the industrial and agriculture sector of the country.

Flexibility

The small size of manufacturing which is predominant in the industry allows for greater flexibility to service smaller and specialized orders.

Rich Heritage The cultural diversity and rich heritage of the country offers good inspiration base for designers come up with new different and attractive designs which are appreciated worldwide. Also we are also influenced by the Indian culture through the media exposure, which of course gives the mauritius designers an inspiration and taste of Karnataka, Rajhastani styles, etc. This varied culture and fusion among these two neighbours gives inspiration to the designers to give their best in terms of styles, creativity and fashion.

Domestic market

Natural demand drivers including rising income levels, increasing urbanisation and growth of the purchasing population drive domestic demand.

This means more factories more manufacturing units, more supply and more labor.

Other Strength Experience - workforce, infrastructure Low labour costs Less exploitative working conditions & wages Existing reputation - quality/trading relationship Perceived as being more European EPZ

WEAKNESS
More dependence on cotton

As the textile sector is heavily dependent on cotton production, low cultivation of cotton will deteriorate the textile industry

Due to over specialization in cotton, the bulk of the international market is missed out, synthetic products in Mauritius are expensive and fabric required for items.

This dependence on single crop economy is restricting the diversification of exports from mauritius.

Spinning Sector

Spinning sector lacks modernization and there is a need of introducing new technology.

Weaving Sector

Mauritius has relatively less number of shuttle-less loom.

Fabric Processing

Processing is the weakest link in the Mauritius textile value chain, adversely affecting its ability to compete in exports.

Poor Infrastructure

High power costs and long export lead times are eroding Mauritiuss export competitiveness across the textile chain.

The important resources and infrastructure, such as adequate of supply of water, continuous supply of electricity and gas, efficient logistics and transportation, tax structure, raw material supply are all basic requirements for the development of an industrial base. However, on the other hand, the industry is faced with rising charges of the energy sector, which increases the cost of production, making it difficult to compete with the other regional rivals.

Low Labour Productivity

Productivity levels for manufacturing various apparel items are far lower in Mauritius in comparison with its competitors.

Labor productivity can be improved by giving the labor appropriate training with the advancement of technology so as to make them more efficient and with lower wastage of resources. In China an average 70 hours of training are given to labor to enhance their expertise.

Other Weakness

Highly dependent on textiles Lack of identity - no designers or retailers Location - freight costs & time in current market

Unattractive image - hard to recruit No level playing field Dont take full advantage of access to 24 countriesdue to regional trading bloc At low value end of market

OPPORTUNITIES

Growing Industry Growth along with the investment of an industry depends heavily on the economic health of the country

World textile trade would continue to grow at a rate of 8.2 % to reach $13.2-15 billon by 2010-2011.

Market access through bilateral negotiation

The trade is growing between regional trade blocs due to bilateral agreements between participating countries.

Integration of Information technology

Supply Chain Management and Information Technology has a crucial role in manufacturing. Availability of EDI (Electronic Data Interchange), makes communication fast, easy, transparent and reduces duplication.

Opportunity in High Value Items Mauritius has the opportunity to increase its UVRs (Unit Value Realization) through moving up the value chain by producing value added products and by producing more and more technologically superior products

Other Opportunities Regional Trading Bloc - 24 countries duty free access AGOA II Vertical integration Brand creation Growth of ethical/fair trade - opportunity to add value

THREATS
Fashion Life Cycle
Fashion changes day by day these days. Media has so much penetrated in our daily lives that we easily adapt ourselves as it wants us to. This has resulted in shortening the fashion lifecycle thus increasing the fashion risk.

Now the buyer does not want to wait long for his consignment because he is insecure that by the time it will reach to him he will lost its demand due to change in fashion. Therefore, they prefer to buy from neighboring countries even at higher cost to get their products instantly rather than to wait weeks or months for their consignments to reach them

Formation of Trading Blocks

Formation of trading blocks like NAFTA, SAPTA, etc. has resulted in a change in the world trade scenario. Existence of bilateral agreements would result in significant disadvantage for Mauritius exports.

Phasing out of Quotas

Mauritius will have to open its protected domestic market for foreign players thus domestic market will suffer.

Other Threats Less protection and removal of quotas Competition from new entrants - low cost, closer to market/speed Rapidly changing market fashions - currently not good at adaptation