Does over-capacity trouble Indian denim sector?

20 May '14

4 min read

Mr Dudeja is of the opinion that the oversupply situation has definitely affected the profit margins of denim producers and more so for players whose focus is primarily the domestic market. Companies which are also exporting have not been affected as much, since the glut in buying of jeans, seen post Id and Diwali festivals every year, is a local phenomenon.

Mr Siddhant Sharma adds that they visualized this scenario much earlier and shifted a portion of their product mix to the Rs 150 per meter and above segment, so it has not affected them much. Although, he too admits that margins have come under pressure.

On their outlook for the rest of 2014, Mr Pandwar informs, “Consolidation will take another 6-9 months and we are hopeful that things will improve in coming times.”

Mr Dudeja expects the same trend to probably continue and thinks that this over-supply situation is here to stay. “If at all, and whenever, the demand catches up with the supply, more expansion will take place”, he informs.

He adds, “However, all is not yet lost. The players who joined the industry post 2009-10, need to introspect and adapt to the current situation. They might very well need to put in place professional and robust marketing systems as well as modify their product mix and take product innovation seriously, by going beyond using denim only for bottoms.”

Fibre2fashion News Desk - India

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