What are the current developments in the denim industry worldwide? How is Sri Lanka placed in the segment?
At present, increasing costs, overcapacity, rising competition, and other factors combined with the worldwide economic crisis are affecting the denim wear producing exporters in general. The demand in the European market has been declining due to the ongoing financial crisis. Whilst the American market is picking up gradually now, we find sound business opportunities in Latin America, Russia, India where the markets grow at a steady pace. As a result, industry-wide capacity is reported to be between 70% - 80%.
Other than the mass producers, the other successful denim companies globally have recognized the need to strengthen their R&D to develop new varieties. China accounts for 60% of current global production. Its denim industry has a large capacity but they presently don’t seem to spend much on R&D as their focus seems to be on the mass market. We now spend more in our R&D efforts and process innovations as well. Recently we formed a strategic alliance with a mill to produce new fabric and we are looking at more such options in the region as the sailing time is only 3-4 days. As we are focusing on niches, our efforts are more in to growing our capabilities rather than volume.
A successful denim industry first of all must face market realities. The requirements in the market change rapidly. For instance, there were only blue, black and two other colors of denim wear but now that trend is changing. It is predicted that denim in a wide range of colors is emerging as the most promising route to a considerably improved denim business by the year 2013.
Published on: 09/03/2012
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