Kota Fibres Inc

8/16/2019 Kota Fibres Inc

1/20

KOTA FIBRES, LTD.

Action Plan 2001

Presented b!

Lin Li, Ind"str E#$ert

%reta Todoro&a, Strate'ic S$ec.De&as(is( B(arat, )FO

*os+ Solis, Financial $lannin'

Ste&e )ondac(ian, Restr"ct"rin' E#$.

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2/20

)o-$an O&er&ie

/ Kota Fibres -an"act"res snt(etic iber arns"sed or ea&in' color"l abrics to -ae t(etraditional Indian saris.

/T(e -aret is ("'e as eac( o t(e 00 -illiono-en in India b" nearl t(ree saris a ear.

/ T(is de-and e"als -ore t(an 12 billion ardso abric.

/ Indians celebrate a lot o esti&als and eac( ot(ese create a de-and or ne clot(es.

Alt(o"'( t(e de-and is risin' it( stable ear3to3ear 'rot(, t(ere are seasonal &ariations inde-and. De-and or Saris $eas aro"nd Diali.

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3/20

Ind"str O&er&ie

/ Accordin' to Porter4s i&e orces...

S"$$liers KOTA Fibres )lients

5e entrants

S"bstit"tes


4/20

Ind"str O&er&ie! S"$$liers

/ In t(e $ast t(e s"$$l o ra -aterials "sed or -an"act"rin'

nlon arn as "ncertain and inconsistent. As a conse"ence

Kota (as (ad to -aintain a airl (i'( le&el o in&entor.

/ T(e ter-s o $a-ent are in a&or o t(e S"$$liers (o 'i&e little

or no trade credit. So or Kota, t(ere is little roo- or -ane"&er

and it -"st $a -ostl cas( to 'et its ra -aterials.


5/20

Ind"str O&er&ie! )"sto-ers

/ Since t(e cr"cial deter-inants o s"ccess are$rice, ser&ice and credit, Kota4s c"sto-ers b"-ostl on credit.

/ T(e clot( -ills essentiall $rod"ce to order, b"ildin' t(eir in&entories o clot( 6"st inad&ance o t(e $ea sellin' season (ile-aintainin' -aintenance stoc t(e rest o t(eear.

/ T(ere is an intense co-$etition a-on' t(eclot( -ills or sellin' to t(e -erc(ants.7erc(ants -aintain a lo le&el o in&entor and b"ild t(e- in ad&ance o t(e $ea sellin'season.

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6/20

Ind"str O&er&ie! 5e entrants,

s"bstit"tes and co-$etition.

/ Since t(e $roit -ar'ins are lo and t(ere is a to"'(co-$etition a-on' se&eral e#istin' arn-an"act"rers, t(e lieli(ood o an ne $laers

enterin' is lo, t(o"'( consolidation is $ossible

/ Since nlon arn is basic to t(e -an"act"re o abric

or saris, as o no t(ere does not see- to be ac(ance o s"bstit"tes e-er'in'.


7/20

Kota4s $rod"ction and distrib"tion sste-

/ T(in $roit -ar'ins orced to ado$t $olicies a'ainsto&er$rod"ction and o&erstocin', (ic( (ad orced "sto carr in&entories t(ro"'( t(e slac season.

/ Since e (a&e seasonal sales, e (a&e a c(asestrate' o $rod"ction it( t(ree -ont(s o $ea$rod"ction and at -odest le&els or t(e rest o t(eear. T(is -eans t(at e (a&e to $eriodicall (ire andire orers, (ic( (as in t(e $ast an'ered orers.

/ For distrib"tion, Kota -aintains to distrib"tionare(o"ses. Inrastr"ct"ral $roble-s increased t(ecost o deli&er to c"sto-ers.


8/20

Kota4s $eror-ance

/ Sales (a&e been increasin' e&er ear.

/ Sales increased b 18.9: in 2000 and e

e#$ect an increase o nearl 1;: in ear 2001.

/ Kota (as been -ain' $roits consistentl. T(is

can be seen ro- t(e balance s(eet i'"res.

>? in

2001.


9/20

Kota4s $eror-ance

Li"idit ratios 2000 2001 @

)"rrent =,2> 1,0"ic 2,=8 1,00

)as( 0,2 0,19


10/20

)as( Flo

90 Das > Das

20 Das? Das

10 Das


11/20

S"--ar ear 2000

/ Des$ite bein' $roitable, Kota (as lon' o$eratin' and

cas( ccles (ic( (as led to $roble-s in its cas( lo

-ana'e-ent

/ Kota (as a &er (i'( le&el o acco"nts recei&ables

(ic( is a conse"ence o t(e nat"re o t(e trade(ere in Kota.


12/20

S"--ar ear 2000 @contd..

/ T(e lon' recei&ables and conse"entl cas( ccles

(a&e led to a (i'( le&el o s(ort ter- debt and interest

e#$enses.

/


13/20

Forecast or ear 2001

Kota "ses a s$reads(eet -odel to $redict -ont(l, detailedres"lts on t(e olloin' acco"nts! C 7ont(l de-and C Acco"nts recei&able

C In&entories C Acco"nts $aable C Re&en"es and e#$enses

In addition, t(is -odel $ro&ides $ro3or-a state-ents o! C )as( recei$ts and disb"rse-ents C Inco-e C Balance s(eet


14/20

Forecast ear 2001 i'(li'(ts

/ O"tstandin' borroin's EO Rs. 2,88;,;;

/ Total interest e#$enses Rs. 1,?=,920

/ 5et Proit Rs. 1,==,>>?

/ A&era'e assets Rs. 28,;1,1=9

/ A&era'e 5otes $aable Rs. 12,88,29>


15/20

Alternati&es

A 5e In&entor Pro$osal

C Red"ction o ra3-aterial3in&entor

re"ire-ent ro- 90 to =0 das

B *"st in ti-e @in = : o -aterial $"rc(ases

C Red"ction o in&entor o $ellets ro- 90 to =

das

) Ado$tin' t(e Le&el3$rod"ction -et(od


16/20

S"--ar


17/20

Dear e-$loees, clients and ban$artners!

T(e -ana'e-ent tea- o Kota Fibresa$$reciates bot( o"r "nderstandin' o t(issit"ation and o"r coo$eration to b"ild a better"t"re or o"r co-$an.


18/20

Anne#es


19/20

I-$act! 5e In&entor Polic

/ O"tstandin' borroin's EO C Decrease ro- Rs. 2,88;,;; to 2,020,89

/ Total interest e#$enses

C Decreases ro- Rs. 1,?=,920 to 1,2;?,2/ 5et Proit

C Increases ro- Rs. 1,==,?>? to 1,812,00>

/ A&era'e assets

C Decreases ro- Rs. 28,;1,1=9 to 2>,>1;,01?

/ A&era'e 5otes $aable @Debt C Decreases ro- Rs. 12,88,29> to ;,0=8,9?0


20/20

I-$act! 5e In&entor Polic *IT

/ O"tstandin' borroin's EO C Decrease ro- Rs. 2,020,89 to 1,?=;,?8=

/ Total interest e#$enses

C Decreases ro- Rs. 1,2;?,2 to 1,102,;=>/ 5et Proit

C Increases ro- Rs. 1,812,00> to 1,;1,;21

/ A&era'e assets

C Decreases ro- Rs. 2>,>1;,01? to 2=,128,2?2

/ A&era'e 5otes $aable @Debt C Decreases ro- Rs. ;,0=8,9?0 to 8,9?=,10

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