Gujarat-based textile major Arvind Ltd is exploring leased and other asset-light manufacturing options to expand denim capacity as strong demand pushes its denim fabric volumes to a 16-quarter high.
Arvind’s denim fabric volumes increased 34% year-on-year to 17.5 million metres in the June quarter, the highest level in 16 quarters. The company said it expects demand to remain strong through the end of the year.
“We see a robust demand going forward. Till the end of the year, we do not see any pressure on volumes,” Punit Lalbhai, Vice-Chairman, Arvind Ltd, said.
The company’s existing manufacturing assets are operating at 100% utilisation, prompting it to explore additional capacity without relying entirely on new, capital-intensive factories.
Arvind is evaluating non-functional manufacturing assets available in the market and could operate them through lease arrangements. The approach would allow the company to add capacity while limiting upfront capital requirements.
“Currently, not much has happened, but in the future we are exploring those options. It is a good demand cycle and we are trying our best to take advantage of it,” Lalbhai added.
Alongside capacity expansion, Arvind is focusing on product development and strengthening its global design capabilities. The company has brought Japanese consultants and designers on board to support its denim business and develop more premium products.
Arvind currently operates design hubs in the US and UK and is evaluating one or two additional locations in Europe. The company aims to use these hubs to stay closer to customers, respond faster to changing requirements and improve its ability to serve customers from different manufacturing locations.
