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Arvind not to go ahead with Bangladesh denim plant

23
Dec '11
Ahmedabad, India-based Arvind Limited, one of the leading denim producers globally, has dropped the idea of setting up a denim plant in Bangladesh.

Earlier in September 2010, the company had announced plans to set up denim production unit in the neighbouring country with an outlay of three billion rupees.

The decision was taken mainly in view of lack of natural gas, one of the main components that go in denim manufacturing.

Arvind presently has an annual capacity to produce 120 million metres of denim. But, in order to meet the rising demand, the company intends to enhance the capacity of its Ahmedabad-based facility by another 10 to 15 million metres by next year. The firm may also consider outsourcing to domestic looms.

The denim business accounts for just one-fifth of the Group's overall turnover, and the company also proposes to concentrate on other income generating avenues like apparel brands and technical textiles.

Accordingly, the company has entered into a deal with German-based PD Fiber Glass Group for production of technical textiles.

The new 51:49 joint venture having Arvind as a majority stakeholder would serve industries like wind energy, ship building, automobile and transportation, infrastructure and aerospace. The company has planned to invest Rs. 800 million in this project over a period of five years.

The new plant would facilitate production of 30,000 tons of glass fibre each year. Bi-axial, multi-axial and woven glass fabrics as well as stitched and chopped mat-glass fabrics would be produced at the new plant.

Initially, 30 percent of the total output would be utilized to cater to domestic demand and the rest would be shipped outside the country, but as the demand for these items within India's aerospace, wind energy and auto sector grows, the domestic consumption-export ratio would be adjusted accordingly.

Fibre2fashion News Desk - India


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