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Rieter: Longest innings with Indian spinning industry

With the first machines delivered to India in 1886, a joint venture in 1968, the 100% subsidiary established in 1995 and the decision to embark on local manufacturing in 2007, Rieter is progressively implementing its strategy with the top priority of providing customer-oriented service. Rieter enjoys very good, long-term relationships with its Indian customers. This close association is based on mutual success and trust. All the leading mills in India have been Rieter's customers for decades. No matter how the market performs in the current year compared to 2006 and 2007, India is displaying strong capabilities and a resolve to develop into an important player in the global textile market.

History of the Indian textile industry

The history of the Indian textile industry dates back to the early 19th century, when traditional handloom textiles were a core feature of the industry. The availability of raw cotton was the main reason for this industry to increase domestic output. After a period of recession during the 1930s, the industry again developed great momentum and at that time the availability of machinery became a bottleneck restricting the further growth of the industry.

The development of the textile industry became strong and vibrant during the 1950s. India imported lots of machines from Switzerland and Germany, and the industry modernised and expanded to meet growing demands during the period from 1950 to 1960. Since 1960 there has been progressive growth in the spinning industry, reflected in the increase in total spindle capacity from 13.05 million in 1958 to 39.5 million in 2007.

With the economic liberalisation starting in the late 1980s the EOU (Export Oriented Unit) scheme was launched, and between 1989 and 2000 "100% EOU" units emerged, focusing on leading-edge technology and machinery to compete in the global marketplace.

In 2000 - 2007, the government made considerable efforts to boost the industry's performance, launching schemes such as the Cotton Technology Mission and the Technology Upgrading Fund. The industry responded to this with record growth in cotton production and a substantial increase in the production of yarns and other textile materials.

Rieter's association with India

The first Rieter machines entered the Indian market in the last quarter of 19th century. The Tata Group's Svadeshi Mills already opted for Rieter machines in 1886. Rieter re-entered the Indian market in 1930 when quality machines were in demand even if investment costs were higher. In 1938, Rieter supplied a blowroom line to Rajapalayam in South India which is still running today.

Rieter went a step further with technology transfer to a joint venture with Lakshmi Machine Works Ltd in the late 1960s, further strengthening its position in the Indian textile market. On August 1, 1995, Rieter formed its 100% subsidiary Rieter India Pvt Ltd and opened offices in major locations to offer doorstep services to customers.

This enabled Rieter to get even closer to the market and offer doorstep service and after sales facilities to its customers. In March 2007, the Indian government granted Rieter a license to manufacture in India. Rieter is currently building up its manufacturing facilities and very soon India will become another Rieter manufacturing hub, with technology and R&D support coming from the parent location in Winterthur, Switzerland. Rieter's endeavour to offer the best machinery and service continues with ambitious plans for the future.

Quality, flexibility and energy-saving concepts

For Rieter, India has always been one of those markets for textile spinning where quality and superior service take priority over price. In an era of increasing energy costs the Indian spinning industry appreciates all Rieter's innovation efforts in the fields of consistent quality, flexibility of machinery setup and minimum energy consumption per kg of material output. In addition, the reduction of waste throughout the spinning process has become one of the main reasons for the increasing preference for Rieter machines in India during the past two decades.

The presence of qualified mill managers all over the country makes it easier for investors to opt for Rieter technology and machines and operate them efficiently to extract all possible innovation benefits. From only 10 customers in 1989, 507 mills had become valued customers of Rieter by the end of 2007. Today Reiter have more than 550 mills using their machines and technology and supplying their end products around the world.

Metamorphosis from a trading to a manufacturing organisation

Rieter India, a 100% subsidiary of Rieter, Switzerland, has been offering sales and after sales service of Rieter machinery in India since August 1, 1995. Rieter India started with 35 people in 1995 and today is a team of 120 professionals backed by the strong manufacturing, sales and service team of Rieter, Switzerland. Rieter has five offices around the country, located in Coimbatore in the state of Tamil Nadu, Chandigarh in the state of Punjab, Guntur in the state of Andhra Pradesh, Mumbai in the state of Maharashtra, and its registered office in the capital city New Delhi. Rieter also has a full-fledged electronic service center in Coimbatore, with stocks of critical electronic and mechanical parts. Today, electronic parts are also stocked in Chandigarh to meet the immediate requirements of customers in North India.

With the start of manufacturing activities by Rieter in India, Rieter India has metamorphosed from a trading organisation into a manufacturing organisation. Rieter India has become a business group within Rieter, enabling it to handle independently most of the business processes associated with manufacturing. It is also a challenging and time-consuming task for Rieter to train and develop local personnel to manufacture machinery that has to match the benchmark of Rieter's production sites in Switzerland and Germany.

Future growth

The world has witnessed enormous growth in India and China in recent years. India's GDP has been growing at an average of 7 - 9% in the past 3 years, with industry and services growing at 10 - 11%. The textile industry has also grown at a similar pace, reflected in increasing investment in factory buildings. The Indian textile industry has already identified weaving and finishing as the weak links in the value chain. The action taken to remedy these weaknesses, once implemented, will once again trigger a new surge in growth and opportunities for all sectors of the industry.

The Indian textile industry is also facing many short-term problems in the areas of infrastructure, power shortages, increasing raw material prices, high interest costs and a shortage of skilled labour. The positive outlook is that the industry and the government are now making joint efforts to minimize and solve these problems.

The long-term growth prospects

The long-term growth prospects for India are good for the textile industry in the light of factors such as increasing domestic consumption, increasing exports as well as the ample availability of cotton and a young workforce. The vision document drawn up by the textile and clothing industry with the government projects an increase in the total market size of the industry from USD 52 billion to USD 110 billion in 2012. It's time for India to get over the present global financial crisis and gain pace to achieve this target by 2012.

Be global - act local

Rieter's commitment to building close and long-term relationships with customers has resulted in long-term plans for India. The focus now is to build up manufacturing facilities, enhance product portfolios and offer superior sales, marketing and service facilities with suitable machines and technology. India is one of Rieter's key markets. With positive growth trends in past years and inherent strengths in raw material and the workforce, there are enough reasons to look forward to a long-term presence and association in India.

published July , 2009
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