'We are expanding denim capacity by 140%' – CEO, Denim Intl
The denim fabric sector in Pakistan has recently seen a developmental stage and over the last few years, there has been a rapid growth and expansion in production capacity in the country. There has been a phenomenal increase in denim output in the last few years, with exports accounting for a major portion of the production.
However the rising prices of raw cotton which has more than doubled in the last one year, is creating major stumbling blocks and giving sleepless nights to denim producers as finished goods prices have not risen proportionately. These have taken a toll on their operating margins and in turn profit margins, too.
Denim International is a specialized producer of denim fabric, with a capacity of 10 million meters per annum. Its plant is located in Karachi and the plant occupies over 100,000 sq ft of covered space. It manufactures all types of 100% cotton as well as polyester and stretch denim fabrics.
The company has installed state-of-the–art technologies and the plant is equipped with high speed warping with electronic yarn sensors and tensioners to ensure superior quality. It has also chosen the latest technology in dyeing and sizing to achieve the best results and a weaving section with 70 Tsudakoma air-jet looms.
The company exports 60% of its produce, with the rest accounted for by the domestic market. Again out of which, a major portion is exported as clothing.
Fibre2fashion spoke exclusively to the young and energetic CEO of Denim International; Mr Reza Agha, who agreed to spare time from his busy schedule and spoke at length on his expansion plans, the current trends and the challenges faced by the denim fabric producing sector in Pakistan.
We began this very informative chat by asking him about his expansion plans, to which he replied by saying, “We are expanding our denim fabric output by 140% (14 million meters) which will help us reach a production of 24 million meters from 10 million meters per annum in July 2011.
“Currently we have 70 air-jet looms and we are adding 150 more rapier looms, along with which we are installing an Italian make rope dyeing machine with 24 ropes at an entirely new location. We are also contemplating setting up of a spinning plant to have an assured supply chain in place and also an apparel manufacturing plant in the near future”.
Next we asked him to comment on the current market for denim fabrics in Pakistan and abroad, to which he said, “The market was moving towards recovery in the beginning of 2010, but since the last quarter of 2010, we are facing very harsh times, due to rising prices coupled with shortage of raw cotton in the domestic market.
“The shortage has mainly happened as the Indian cotton exporters who had booked our orders in advance, later they did not supply the same, mainly as the Indian government had put a cap on cotton exports as well as the fact that, exporters could not ship the cotton bales in time before the deadline date set by India.