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| Denim Club India - Newsletter |
| Denim Club India - a social and
professional networking place, for members of the denim community - brings to your desk well-researched
compilations in the form of articles and documents relating to the Denim industry, carrying information from
India and all over the world. |
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Vol. 1 No. 1 January 2010
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Industry Veterans Express Positive Outlook for the Indian Denim
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Denim Club India
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The year 2008-09 witnessed a major economic slowdown that started in the USA and consecutively sprawled to the other
parts of the world. Surprisingly, denim industry in India did not suffer a major setback due to the ever-increasing demand for
the product in the western world, as well as on the domestic front. DCI puts together thoughts of industry veterans
describing positive outlook for the Indian denim industry that successfully passed through the recessionary phase...
According to the recent research, the Indian denim industry is said
to be growing with 300 million meters of denim consumption
currently with a 10% CAGR, and is expected to reach about 530
million meters in 2015. These statistical figures did not suffer much even
during the year-long slowdown. India's largest denim producer Arvind saw
its jeans garment revenue grow by 32% in volume terms and 47% by value
during 2008-09. Today, the industry is enjoying a strong domestic demand
and on the exports front too, Indian producers have price competitiveness
against rivals like China in the international market.
According to the industry leaders, the Indian denim industry that saw its
capacity rise by 100% over the past five years will see it doubling again, this
time over a shorter span of three years. The estimates are bullish
considering that the capacity base has grown fairly large.
Though India has never been able to compete with countries like China
and Bangladesh because of the higher cost structure, as of now China has
become more expensive. India's devaluation has become much more
competitive than China so most of the export orders have started coming
to India.
Indian economy showed early signs of recovery, as compared to other
countries, leading to yet another boost in domestic demand. Demand for
branded wear including denims that was prevailing even before the
recessionary phase began crippling in, due to various factors like education,
increasing nuclear families, high disposable incomes, brand awareness and
brand penetration in rural Indian market has once again gained
momentum.
Indian Denim Industry'09 : Experts Speak
In an interview with Fibre2fashion.com in June, 2009, Mr. Balkrishna, CEO,
KG Denim Ltd., commented:
"The whole of last year had gone with the recession which affected the
denim industry badly thereby reducing the fabric sales. The mills were
under utilized for most of the period last year and the trend has continued
till March 2009."
View
Source
"We are working at 95% of our capacity. Orders worth 7.5 lakh meter are to
be delivered by coming November. As the demand is always high during festive
season,we give special emphasis to the domestic market. On the export front,
normalcy is still far away," expressed Mr. R. S. Singh,VP of Blue Blends (India),
while speaking to Economic Times in September,2009.
View Source
"While retailing in foreign countries is still at a low point, exports are
increasingly getting better, especially in markets we cater to. The markets
include the US and European countries. Our order books have reached
our full capacity." Mr. Jayesh Shah, chief financial officer and director of
Arvind Ltd. had expressed in August, 2009.
View Source
In October, 2009, Mr. Ashish Shah, Managing Director, Aarvee Denim
& Exports had opined:
"The reason why there is greater demand for Indian denim in the West is
that denim produced in China is now costlier. Hence Western buyers have
turned to India. A few months back, Indian denim was almost 10% costlier
than the Chinese fabric."
View Source
Mr. Sanjay Lalbhai, Managing Director, Arvind Mills Ltd. in an exclusive
interview in Oct.,2009, with CNBC-TV18 expressed:
"In the last year there has been de-growth of 4-5% but things should
improve. Now America is coming back. Europe has a little way to go. France
and Germany have come back, so we believe that good times will start
again and the growth will start coming back as far as denim is concerned."
View
Source
Citing the major reasons of advantage for India, Mr. Rajesh Dudeja, Founder of Denim Club India, speaking exclusively to
Fibre2fashion.com said:
"Recently the Chinese textile industry has been faced with several
challenges, and as a direct consequence, China has been fast loosing its
competitive advantage in terms of cost to other Asian countries like India,
Bangladesh,and Vietnam."
"Raw materials costs, including cost of cotton, which is the main material
for manufacturing denim, have risen in the past more than two years and
despite the large volume of cotton produced in China, there has been a
need to import cotton to fill the gap and it has been estimated that the
Chinese textile industry on an average faces a 10% increase in raw material
costs, each year. Labour shortage has been a common and frequent
problem faced by the textile industry of China and the implementation of
Chinese Labour Contract Law in January 2008 requiring employers to
contribute to employee's social security fund has also contributed in
increasing operational costs and tightening of operating margins," he
elaborated further.
View
Source
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