With competitive pricing becoming critical for survival in the global apparel industry, more and more companies are tightening their supply chain by integrating processes in-house. While the trend is not new for the big companies, the intensity of the efforts and number of small export houses going in for integrated operations is noticeably on the rise. Interestingly the integration could mean backward and forward integration of value-added processes that were earlier outsourced, and in that adding dyeing units and machines for surface decoration takes the lead… For the bigger companies, the movement is backward into spinning for better control of lead times and few moving forward into retail.
[bleft]A couple of years back when embroidery was a rage, many centres like Surat, Ahmedabad, Jaipur saw a huge influx of embroidery machines. The focus has now shifted to digital printing as they are not only in demand but are also very useful in sampling and printing on small quantities [/bleft]
The need to control all aspects of production for better quality and lead times, besides keeping a tight reign on prices is motivating more and more companies to get value-added services in-house. In the year gone by many companies put into implementation their plans to integrate, while many more declared investment to move in that direction. One such company, Hare Ram Export, Jaipur has put aside Rs. 8 crore for the expansion to add its own in-house dyeing and printing unit. The company producing blouses, shirts, shorts and T-shirts for Spain, Germany and France has already started implementation of the project.
In fact, the direction is mostly to bring processing and printing in-house. Mumbai-based Al-Rkayan Apparels and Exports is installing a processing plant in Ambarnath (near Mumbai) with a capacity to process 5,000 garments per day in both dry and wet process, earlier the job was being outsourced. Vuditque Creations, a Sonepat based manufacturer-exporter of scarves is in the process of setting up an in-house printing unit. The company is investing almost Rs. 5 crore on this expansion that will include digital as well as screen and rotary printing.
Apex International, a Varanasi based exporter of scarf and stoles is also in the process of setting up a new dyeing and printing unit which is expected to be commissioned by March 2012. Initially the dyeing capacity will be around 30,000 metres, which will be enhanced later based on feedback from the buyers. Another relatively smaller company Vinegar Exports has recently added 40 multi-head embroidery machines; earlier the company was depending on job work.
A couple of years back when embroidery was a rage, many centres like Surat, Ahmedabad, Jaipur saw a huge influx of embroidery machines. The focus has now shifted to digital printing as they are not only in demand but are also very useful in sampling and printing on small quantities for high-end fashion. Bombay Rayon is looking to add 150 machines in next few months. Kolkata-based Jayram Export is adding three digital printing machines. Even smaller players are investing in the technology and many companies in Surat and Jaipur have already bought digital printers. Encouraged by the trend Hemmy Digital Printing, Surat is going for expansion by adding two new digital printing machines and is also looking to setup a plant for manufacturing of digital printers with German collaboration.
While bringing processes in-house is the focus for smaller companies, most of the bigger textile units are looking to expand operations along the entire textile value chain with spinning being the key area of concentration. Mandhana industries have already announced intention to backward integrated into spinning and is looking to acquire a spinning unit with an investment of around Rs. 100-crore, preferably in Maharashtra, with a capacity of around 50,000-60,000 spindles. Shahi Exports too is getting into spinning with a unit in Karnataka. SEL, which was originally a garment manufacturer with six factories is now a major player in yarn manufacturing and is still expanding capacities in spinning. Presently they have close to 150,000 spindles and by March 2012 it would be 5.5 to 6 lakh spindles.
Among the mid-size players, Om Sakk, Panipat has both forward integrated into garmenting with a new 600 machine factory and also backward integrated into spinning, completing the full textile chain. Kolkata-based Dollar Industries Ltd. (DIL), one of the leading hosiery undergarment manufacturers, has recently acquired a spinning mill at Dindigul in Tamil Nadu for Rs. 31 crore. The acquisition of the spinning mill is part of company’s backward integration plan. The interest in investing in spinning has been brought on by the uncertain and highly volatile cotton price situation, which has motivated many companies to invest in the supply chain.
With its yarn dyed shirting fabric brand in cotton, cotton-poly and linen ‘Dakshlene’, Mumbai-based Shree Daksh standing at Rs. 100 crore turnovers is planning to get into manufacturing of shirts and trousers with a modern 200 machine set-up. Kolhapur-based West-End Fashions, manufacturers of grey and processed fabric, both knitted and woven for bed linen, garments, shirting fabrics, bottom weights, very exclusive ladies dress material like crinkled voile is getting into garmenting now. The building is already complete and in the first phase 300 machines have been installed, and another 800 machines are ready for installation in the second phase. Deegee Textiles, having more than 18 ginning machines, 31,200 spindles, 880 rotors and 48 looms for spinning and weaving, is now setting up a garmenting unit to service the customer with finished product.
Zinnia India, a Noida-based ladies garment exporter producing blouses, ladies’ wear, skirts is installing some looms and printing machines so that we can produce own fabric to get better quality and save from the hassles of bouncing delivery dates by the suppliers. These are only a few of the exporters who are investing in integration. Many other players like Goldenseam, Go Go International, Integra Apparels, Texport Overseas, Meridian Apparels, Eastman Exports, Shahi, Gokaldas Exports are going ahead with expansion plans to enhance capacities confident that business is bound to come to players prepared to take on volumes at competitive prices. Surprisingly many smaller players too are adding capacities like Ginni Collections, MLK Exports, Melange Clothing, Rupayan, Delight Apparels, Lodha Group, Mariko, Neelima International to name a few.
