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Abstract

Arvind Mills Limited (AML), a composite textile mill, played a leading role in India?s contribution to global textile trade (51% of its revenues), as it was the largest producer of textiles, particularly denim. It had a strong relationship with leading global brands in denim, shirting and knits. In denim, it had 72% market share of the estimated 80 million metres of the Indian denim market. Leveraging global capacities and strong product development, AML decided to concentrate on high-end segments, which offered higher margins and realisations. With the removal of World Trade Organisation quota restrictions in textiles, 49% of the global trade was freed. Asia was the biggest gainer and exporter to the developed region, China and India being the prominent winners. As a competitor, China has the cost advantage over India. AML being a global player is looking for ways and means to reduce the cost. One of the issues is effective management of working capital. The case gives a brief account of the steps AML has taken at various points in time to overcome constraints and focuses on the issue of working capital management.
Location:
Industry:
Size:
16.8 million sales (2004)
Other setting(s):
2000-2005

About

Abstract

Arvind Mills Limited (AML), a composite textile mill, played a leading role in India?s contribution to global textile trade (51% of its revenues), as it was the largest producer of textiles, particularly denim. It had a strong relationship with leading global brands in denim, shirting and knits. In denim, it had 72% market share of the estimated 80 million metres of the Indian denim market. Leveraging global capacities and strong product development, AML decided to concentrate on high-end segments, which offered higher margins and realisations. With the removal of World Trade Organisation quota restrictions in textiles, 49% of the global trade was freed. Asia was the biggest gainer and exporter to the developed region, China and India being the prominent winners. As a competitor, China has the cost advantage over India. AML being a global player is looking for ways and means to reduce the cost. One of the issues is effective management of working capital. The case gives a brief account of the steps AML has taken at various points in time to overcome constraints and focuses on the issue of working capital management.

Settings

Location:
Industry:
Size:
16.8 million sales (2004)
Other setting(s):
2000-2005

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