What is the current market size of denim in India?
India’s production of denim fabric has doubled over the last five years, from 250 million square meters to almost 500 million meters today, and is expected to go up to 600 million meters over the next two years.
Denim is now associated as fashion product where constant efforts are being made by denim fabric manufacturer and garment manufacturer with specialized laundries to provide constant fashion input in the jeans. It is expected as with increased GDP growth and its impact on disposable income in India, demand for branded and fashionable product will increase. As per one of the studies demand growth for jeans in future will be primarily coming from Asia more specifically India and China. Further, with increased interest of European Brands to enter in retailing like Diesel, VF, Ms Sixty etc., the demand for upper and high end jeans is expected to increase which will be ultimately manufactured and finished in India only.
Indian denim export to US is low but slightly up in EU. However, exports to major denim processing markets like Turkey, Egypt or Cambodia surged showing India is effectively gaining share in countries where garment conversion is increasing competing with China. India’s exports of cotton denim fabrics reached US $95.05 million during the first three quarters of fiscal year 2006-07 (April-December), as against exports of US $91.06 million for the whole of 2005. Exports to neighboring Bangladesh-one of the key market were sharply down during 2006.
How has Indian garment industry established itself in the world market?
According to National Manufacturing Competitiveness Commission (NMCC), it is estimated that India’s share in global clothing and textile trade can be increased from US $51 billion to US $110 billion by 2012.
India’s textile export has grown at around 11-12 percent during last two years. However the growth is expected to be effected by 12 percent Rupee appreciation. Bangladesh and Pakistan are already giving tough competition to India and with Rupee appreciation vis-a-vis their currency depreciation will further erode our competitiveness. Bangladesh textile export has already touched $8.90 billion out of which 80 percent constitute garment exports. At this pace of growth Bangladesh will overtake India in garment export. Bangladesh average wage cost $30 has bolster its competitiveness.
Which according to you are the areas that need improvement?
The Government must focus on textiles and provide the right support in terms of financial packages and infrastructure which is much needed now particularly to leverage the appreciation in rupee. To keep the pace of exports and to enable the Indian garment rather textile Industry as a whole; the government must intervene to check appreciation of rupee or in larger interest of economy alternatively incentives textile product exporters to accommodate the squeezed margins on exports. Our port charges are higher than ocean freight to Europe. Transaction cost is very high for export.
What would you say are your company’s advantages?
Malwa Industries Limited is strategically replicating Turkish model with Asian cost. We are moving from basic to niche fabric and garments with value addition. Turkish mills are able to sell fabric and Jeans to Europe because of the fashion, value and service and being very near to Europe (logistics). This is what Malwa strategically inching towards achieving.Our prime advantages are:
Business Model: Malwa is developing a value-added growth story that focuses on 3 different customer segments, each denoting a differing value proposition in terms of product quality, fashion and lead time. Malwa's 3 target customer segments are (a) Basic (b) Premium and (c) Super Premium. We are fully vertically integrated and hence offer this combination.
Supply Chain Model: Malwa is able to deliver a full packaged (a) from India (b) from Jordan and (c) from Italy. Such a combination of multi-locational delivery capability offers us a unique selling proposition to capture and retain global customers.
Technology & Back-End: Malwa has invested in most sophisticated manufacturing equipment in the world at its plants which are comparable with most European plants. Such technology is extremely modular and provides a significantly better finish to the product with high quality levels.
Taking Malwa to next level, are there any plans on card?
What is your message to the Industry?
DISCLAIMER: All views and opinions expressed in this column are solely of the interviewee, and they do not reflect in any way the opinion of Fibre2Fashion.com.