Cotton Knitted Fabrics

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Product Code 260101001
Quality and Standards N.A.
Uploaded on January 2006


Knitting is one of the fabric manufacturing techniques in which yarn is converted into loops and loops are intermeshed to form fabric. The knitted fabrics are quite different from woven fabrics in which yarn lie in straight line resulting in rigid structure and less elongation. Cotton knitted fabric is used as raw material for the manufacture of undergarments and knitwears. Generally, hosiery yarn of count 20s-40s is being used for the manufacture of knitted fabric. Since, the machinery required to set up this industry are indigenously available, this industry can be easily set up with low investment and can be run by new entrepreneurs. Main buyers of knitted fabrics are garment manufacturing units. Hence, knitted fabrics should be manufactured and supplied as per the requirement of garment manufacturers.

Market Potential

Knitwears are manufactured out of knitted fabrics mainly due to its softer feeling, bulkiness, good draping quality etc. Knitting industry is low skill, labourintensive and remunerative, more attractive to workers, less capital investment, easy process, more turnover, more profits and attractive to entrepreneurs. The main buyers of knitted fabrics are garment manufacturing units and processing units. Presently, garment manufacturing units are running short of quality fabrics, so it is presumed that marketing of knitted fabrics will not be a major hurdle provided the knitting unit is prepared to supply the goods to the buyers in scheduled time without any delay. Besides, there is tremendous export potential for this product as the large number of Western garment manufacturers intend to source their requirement of fabric from India.

Basis and Presumptions

This project is based on two shift basis with 300 working days in a year. The time period for achieving maximum capacity utilisation is considered from 3rd year from the date on which production is started. Rental value of proposed building for the project is considered at Rs. 20 per sq. mt. The costs of machinery and equipment/ material indicated refer to a particular make and approximate to those prevailing at the time of preparation of this project. Installation and electrification cost is taken @ 10% of cost of machinery and equipment.

Non-refundable deposits, project report cost, trial production, security deposit with Electricity Board are taken as pre-operative expenses. Depreciation has been considered at 10% on plant and machinery, 15% on furniture and fixtures and 25% on equipments. Minimum 25% of the total investment is required as margin money. The interest rate on capital loan has been considered at 12% per annum.

Implementation Schedule

The implementation schedule of this project may take a total period of six months approximately for starting the production.

Technical Aspects

Process of Manufacture

Cotton yarn of particular count, purchased from spinning mills or yarn dealers on cones, are loaded into the machine and threaded through eyelets and tensioning device, stop motion and finally to the needle. While cloth is knitted by running the machine, care must be taken to see any breakages in the yarn while knitting and breakage must be attended to. After sufficient length of roll is knitted, the knitted cloth is cut and taken away from the machine. Details regarding yarn count, weight of cloth rolls, date of packing, manufacturers etc. are marked on each cloth rolls and sent to the customers.

Quality Control and Standards

There is no standard specification formulated for cotton knitted cloth. The quality of knitted fabric mainly depends on raw material quality, therefore quality yarn must be used for the manufacture of knitted cloth. Hosiery yarn should be purchased from reputed spinning mills only. Spare parts should be kept ready for immediate replacement in order to maintain the targets.

Production Capacity (per annum)

Plain knitted cloth

Quantity (Kg.)

Amount (In Rs.)

3,20,800 8,65,90,000

Motive Power

Totally 50 HP power is required to run the industry at full capacity, this is proposed to be obtained from State Electricity Board.

Pollution Control

The process of manufacture does not involve any pollution.

Energy conservation

Wastage of energy can be minimised by proper housekeeping.

Financial Aspects

Financial Aspects

Land and Building
Land area 1000 Sq. Mtr @ Rs. 3500 per meter Rs.35,00,000
Boundry wall and Gates Rs. 5,00,000
Covered area for processing yarn into knitted fabric 350 Sq. mtr @ Rs. 8000 per Sq. Mtr Rs. 28,00,000
Covered Area for utility plants like bore well, DG Set, electrical room, maintenance room, store room, staff office workers room etc. 250 Sq. mtr.@ Rs. 9000/ Rs. 22,50,000
Total Civil Cost (Land and building) Rs. 88,00,000

Machinery and Equipments



Rate (Rs.)

Amount (Rs.)

Sinker body knitting machine 22 gauge 17" dia with needles and all accessories 8 75,000 6,00,000
Sinker body knitting machine 18 gauge 18" dia with needles and all accessories 8 100,000 8,00,000
Sinker body knitting machine 24 gauge 15" dia with needles and all accessories 8 80,000 6,40,000
Electrical motor for knitting machines 24 10,000 2,40,000
Electronic weighing balance 1 75,000 75,000
D.G. Set, Bore well, electricals LS 50,000 10, 00,000
Total 33,55,000

Other Fixed Assets

Erection and installation 10% of plant and m/c 3,36,000
Office furniture 5,00,000
Pre-operative expenses 2,00,000
Total 10,36,000
Total Fixed Capital 1,31,91,000

Working Capital (per month)

Staff and labour Wages



Rate (Rs.)

Amount (Rs.)

Manager 1 25,000 25,000
Sales, marketing, finance, purchase administration, office, laboratory, stores, computer and office staff 15   1,50,000
Watchmen and peon 6 3,500 21,000
Total 1,96,000

Production Staff

Machine operators 30 5,000 1,50,000
Unskilled workers 6 3,000 18,000
Total 1,68,000
S. Total 3,18,000
Perquisites @22% 70,000
G. Total G. Total

Raw Material


Qty. (Kgs.)


Amount (Rs.)

40 S Cotton yarn 27200 180 48,96,000
Total 48,96,000



Electricity bill 37.5 x 25 x 4 x 0.8 x 24 72,000
Water charges 10,000
Fuel Coal/furnace oil 100,000
Fuel for vehicle 8,000
Total 1,90,000

Utilities (per month)


Electricity bill 37.5x 0.8x4x16x25 48,000
Water charges lump sum 2,000
Total 50,000

Other Contingent Expenses (per month)


Rent -
Postage/stationery 5,000
Repair and maintenance 12,000
Transport/travelling charges 50,000
Insurance 8,000
Telephone bills 10,000
Total 85,000

Total Recurring Expenses (per month) = Rs. 54,19,000

Total Working Capital for 3 months= = Rs. 1,62,57,000

Total Capital Investment

Total fixed asset value Rs. 1,31,91,000
Working capital for 3 months Rs. 1,62,57,000
Total Rs. 2,94,48,000

Machinery Utilisation

Machinery utilisation is considered as 75% of installed capacity.

Financial Analysis

Cost of Production (per year)


Recurring expenses 6,50,28,000
Depreciation on machinery @ 10% 3,35,000
Depreciation on office furniture and equipments @ 20%Depreciation on building and civil construction@ 5% 1,00,000 2,75,000
Interest on total investment @ 12% 35,34,000
Total 6,92,72,000

Turnover (per year)




Amount (Rs.)

Cotton Knitted fabric 3,20,800 269.92 8,65.90,000
Total 8,65,90,000

Net Profit (per year) Rs. 1,73,18,000
Net Profit Ratio (Net Profit/ Turnover (per year) 25%
Rate of Return on Investment (Net Profit/Total Capital Investment) 58.8%

Break-even Point

Fixed Cost


Depreciation 710,000
Interest on capital investment @12% 35,34,000
40% of wages of staff and labour 18,62,000
40% of other contingent expenses 4,08,000
Insurance 96,000
Total 66,10,000

B.E.P. FC × 100
FC + Profit
= 27.6%

Addresses of Machinery and Equipment Suppliers

  • M/s. Bharat Machinery Works
    44, Industrial Area-A,
  • M/s. Moonlight Knitting Machinery Works
    Vishvakarma Colony,
  • M/s. S.T.M. Knitting Machinery Works
    Near Savitry Complex,
    G.T. Road, Ludhiana.
  • M/s. T.S. Mechanical Works
    Janta Nagar,
  • M/s. Raj Mechanical Works
    410, Industrial Area-A,
  • M/s. Sohalson Knitting Machinery Works
    Industrial Area-B,
  • M/s. Punjab Machinery Works
    Vishvakarma Chowk,
    Near Fire Brigade,

Raw Material Suppliers

  • M/s. Mahavir Spinning and
    General Mills
  • M/s. Abohar Co-operative
    Spinning Mills
  • M/s. Adinath Textiles Ltd.
    Registered Office,
    Village Bholapur,
    P. O. Sahibana,
    Chandigarh Road,
  • M/s. Vardhman Spinning General Mills
    Samarala Road,

For further information please contact

Information Manager
TIMEIS Project