By: Shramana Ganguly Mehta

 

Selfish Jeans: India dresses up world in denim

 

Global Brands & Retailers Such As Wal-Mart, VFCorporation, GAP, Levis & H&M Flocking To India To Source Fabric

 

The way to Arvind Ltd's design studio in the basement of thecompany's mill in downtown Ahmedabad's Naroda area, amid the hum of textile machines processing cotton that would go into thebest brands of the world is somewhat deceptive. It does not reflect the buzzand the plush down there

 

The well-lit, swanky studio has various shades and texturesof denim are splashed across a huge table and Aamir Akhtar, CEO (denim fabrics)of the world's largest denim maker, is working with several young designers tofinalise the 'Arvind Meets Kato' collection for the global buyer

 

Donned in chic denims, Akhtar and his team virtually live ondenim ever since the world's largest retailer Wal-Mart placed an order for onemillion metres of organic denim every month earlier this year.

 

Barely 10 km away, at Narol in Ahmedabad, the manufacturingplant of Aarvee Denims and Exports is working round the clock buoyed by another"handsome" order from Wal-Mart. "There is no time to lose," says Ashish Shah,MD of Aarvee.

 

The story is similar at denim plants across the country.

 

Global giants such as Wal-Mart, VF Corporation, GAP andH&M have begun flocking to India to source the fabric with China, the largest supplier, slowly retreating from denim production due to cotton crunch.

 

Indiahas a golden opportunity to grab a major share in the world denim market, saysPR Roy, veteran textile exponent known as the father of denimin India.

 

This is because China has reduced its cotton acreage due toits government policies and is strategically changing itself from a masssupplier to a value supplier, he says.

 

Arvind's Akhtar says the company has already witnessed a 13%jump in denim business in the current fiscal due to aggressive buying by globalbrands and retailers such as Wal-Mart, GAP and Levis.

 

Indiais nowhere near China in numbers though. The big Asian neighbour makes 3billion metres of denim a year, miles ahead of India's 650 million metresoutput.

Asia is clearly the denim destination of the world with brands shifting manufacturing from traditional places like the US, Mexico, Turkey and Italy, to low-cost destinations.

 

"Suppliers in Asia have provided high quality products at competitive prices for many years," says a Wal-Mart India spokesperson.

 

And India is the new flavour. "We have begun sourcing aggressively from India, foreseeing good retail demand," says a senior sourcing executive of a global retailer.

 

"With trouble brewing in Bangladesh over labour, more business would come to India in days to come," says the person who asked not to be named as he is not authorized to speak for the company.

 

This explains the huge build-up in manufacturing capacity in the country. In the recent past Indian manufacturers have added close to 80 million metres to their capacities, points out Mr. Roy.

 

And everybody is on an expansion mode.

 

Arvind, for example, is slated to add about 10 million metres denim fabric to its existing 95 million metres of production this quarter. Arvee is spending `150 crore to ramp up its production from 60 million metres to 96 million metres by December 2011.

 

Other major denim manufacturers such as Raymond, Nandan Exim, Bhaskar Industries, Modern Denim and Mafatlal Denim too have pulled up their socks to cash in on the rising demand for denim, which accounts for 13% to the world textile trade. The global denim market, estimated at $55-60 billion, is expected to grow 3-5% a year.

 

That's a huge opportunity for India, to dress up the world in denim

 

 

Originally published in The Economic Times, Ahmedabad dated August 17, 2010