With multiple crowns to add to its glory like the textile state of India, the denim capital of India, Gujarat, at present, has a textile market of around US $ 25 billion and contributes nearly 12 per cent to India’s textile exports. The list is quite long and impressive as Gujarat covers the entire supply chain right from cotton production to textile machinery. And now, Ahmedabad, one of the biggest textile hub and the largest city of Gujarat, is growing as a garmenting hub. The companies based here, and working in an organized way, are in the process of huge expansion for garments, while some of them are taking the IPO route. There are emerging garment manufacturers purely focusing on the domestic market but having state-of-the-art manufacturing units. Some of them are also having expert technical consultants working with them. The vertical integrated companies are already going strong in garmenting, and are further diversifying and adding new product categories, expanding both into export as well as domestic market. Team Apparel Online visited these companies to understand their growth strategy in this booming garmenting scenario.
In textile segment for last six decades, CA Patel Textiles, entered into casual and semi-casual shirt manufacturing just six months before for its own brand ‘ITALFIC’ with 200 stitching machines. It further plans to install 800 stitching machines in the next two years. Manufacturing millions of garments per month, offering an entire range of fashion garments, Komal Texfab is now diversifying into jeans and ethnic wear manufacturing with an investment of nearly Rs. 50 crore. It is also going to double its circular knitting capacity which is currently 200 tonnes per month. Globe Textiles India Ltd., manufacturing 2 lakh jeans (majorly basic as well as semi-fashionable) for the Indian and the overseas market, is also increasing its stitching capacity. Kolkata based brand, AppleEye recently tied up for 25,000 garments per month with one such Ahmedabad-based company. Two years old, Bubble Bee Export House, which had seen 200 per cent growth last year, is in the process to install 250 stitching machines. These are ample examples which prove Ahmedabad’s strength in garmenting.
There is no doubt that Gujarat, or even Ahmedabad, has a strong availability of cotton fabric since a long time, reasonably good labour availability, State Government support which motivates entrepreneurs to move forward. Already going strong in processing and manufacturing of home furnishing products, apparel is the only segment which was not explored in Ahmedabad, and hence companies in this city are naturally moving towards this. Processing/printing, yet another strength of Ahmedabad, is also one of the reasons for knitted garments’ growth here. “Garmenting was already here in Ahmedabad but it was majorly for the domestic market and the unorganized market. However, since last few years, it is growing in an organized way because only garmenting is left to be ventured further. We have everything required for support structure, right from yarn to finishing in surrounding areas, so garmenting was a natural option for companies like us. Further growing domestic market with organized retail is also attracting top companies to come up in garmenting. All chain stores or retail giants are already associated with this hub, so there is as such no challenge for us in garmenting,” states Suresh P. Bagrecha, CMD, Komal Texfab. He further added that there are hardly any top exporters across India who do not take fabrics/printing support from Ahmedabad, so they tend to have a fair idea about the fabric required for export.
Komal Texfab Group that started in 1981, entered into garmenting in 2008 and now has two units. The company is strong, both in export and domestic market with regard to garmenting. Currently, it is having an order of Rs. 60 crore from the domestic market. Having a total turnover of Rs. 200 crore in the last fiscal, the company is expecting more than Rs. 250 crore in the current fiscal. Apparel business constitutes 50 per cent of the company’s turnover.
Even Swapnil Patel, Director, CA Patel Textiles, shared, “We already have strength in cotton fabric, which is 60 per cent cost of the garment. This strength motivated us to start shirts manufacturing. Other apparel hubs are sourcing fabric from this city and growing well, so why can’t we? Our existing strong retail network is supporting us in marketing which enables us to have more margin with less efforts and less investment in garmenting. Our focus for expansion will be garmenting primarily as we will start tees, trousers, etc. The garment manufacturers to whom we supply fabrics across India are willing to start units here.” He further added that good business environment, proper infrastructure like enough electricity is another motivation for the company to start garmenting. At present, CA Patel Textiles is having an annual business of Rs. 300 crore and is expecting growth of at least 30 per cent.
AOI also got a chance to have more information on this rising garmenting business from Bhavin Parikh, CEO, Globe Textiles India Ltd. who briefed: “In the last few years, textile business has strengthened across India. In Ahmedabad, the focus has shifted towards apparel. The capacities have already been enhanced at the fabric level and now we want to cover the entire value chain, so things are in motion. We are also getting lot of support from State as well as Central Government for the same.” He informed that his company has four verticals, namely apparel, printed fabrics, denim fabrics and recently it started home furnishing also which is nearly 5 to 10 per cent of its total business. Its apparel domain started in 2006 and is now 35 to 40 per cent of the entire business of the company. In the last fiscal, it had a turnover of Rs. 190 crore and it is expecting 15 per cent growth this year and 25 to 30 per cent in the next few years.
Smooth labour handling
It is easy to manage labour in Ahmedabad as there are no union issues which makes working smooth. But labourers here have an entrepreneur mindset and after few years of experience and resources, some of them start their own jobwork or similar kind of business at a small level. But companies are managing it effectively, like CA Patel Textiles which is giving incentives to the workers, and that too despite piece rate, is also training operators to increase productivity and keeps motivating them. It even runs programmes in nearby villages to bring labour to the factory apart from offering them living space at discounted rates, transportation, etc.
More than 60 per cent of the work strength of Globe Textiles have been associated with it for more than a decade. “We put in a lot of efforts to retain the operators and give them the best working environment. We hire freshers too and give them proper training. We prefer to work from the bottom to the top,” stated a proud Bhavin. He even confirmed that the company has very less absenteeism which helps to solve the cost issue.
Garmenting in-house
The nature of textile business in Ahmedabad is majorly outsourcing as very few players are vertically integrated, but the good thing is that in garmenting, they have most of the processes in-house be it cutting, product development, stitching or finishing. “With regard to fabric, we are cost-effective compared to big mills as they have their overheads compared to our weavers and process houses. Our strong network, vast experience, quite open sourcing, bulk purchasing power help us in managing costs,” reasoned Swapnil. The company sources 30 to 35 lakh metres of fabric per month. He further added that rather than focusing on backward integration and investing more, it is better to focus on marketing and the forward side which is garmenting. But Suresh strongly insists that their vertical system supports in reduction of costs and quick deliveries.
Inclusion of organized retailers, for exports and own brands
In Ahmedabad, players like CA Patel Textiles are focusing on domestic market and want to develop their brands for better margin rather than going for contract manufacturing in export. Even manufacturing for organized domestic retail giants is not their priority. Complication of exports is another reason for this shift in thought. While Komal Texfab is strong in exports as well as domestic, Global Textiles is working for Landmark Group in India as well as Dubai, along with other overseas buyers. Many more small- and medium-level companies are actively exporting garments.
Transit to polyester is not essential
Be it knits or woven, most of the companies doing garmenting in Ahmedabad are majorly into cotton-based garments and they have no interest or plan to focus on polyester-based or blended garments. Will it not make them lose the growth happening in this segment as it is developing fast? Local industry does not think so. Suresh justifies such a stand saying, “Companies like ours are already full with orders of cotton-based fabric and garments, we don’t have even time to think about polyester. Surat is already strong in polyester and there is no need for Ahmedabad to divert in similar direction.”
What needs to be done more…?
Industry accepts that bringing overseas buyers to Ahmedabad is comparatively difficult, but events like Textiles India will be definitely helpful in this regard. For fabric, already a chunk of overseas buyers keep coming to the city. Companies have understood that at this level, they need to put extra fuel to go overseas and meet buyers. “We have to think of getting buying houses of Delhi-NCR and Bangalore to visit Ahmedabad frequently as it is very important to grow in export,” adds Suresh. He stresses that better price and improved service can also be solutions in this aspect. Suresh himself is very much keen about R&D. Most of the apparel export from Ahmedabad is into Middle East countries rather than US, EU or other countries. One of the reasons for this is that Ahmedabad is not quite viable since competitive exporting countries have duty advantages in US and EU. But local exporters feel that with the growing apparel manufacturing capacities, more and more companies of Ahmedabad will also be able to cater to bulk buyers. It can be taken as a positive indication that some entrepreneurs accepted and insisted that the city needs to change its mind set, skill set for export specifically, only then it will be able to challenge other established apparel exporting hubs in India.
On the path of growth
Buying office support
Not only manufacturers, but even buying office‘s support structure is emerging in Ahmedabad, but is very limited so far. Amit Gordhandas, MD of Dassani Global Group, Ahmedabad, shared, “We book the lines at the factories rather than placing order one by one and controlling the production. We have clients in Europe, South America and Africa, who support from trend forecast to final delivery.” The company offers entire range of garments and accessories. It is associated with 35 apparel manufacturers across India.
Niche segment too
Some of the companies here are also doing very niche segments. Like Samvit Sarabhai, Director, Rajka Designs, said that the company started home furnishing with specialization in artisan work based in Kutch and Rajasthan. “In our garments, we mainly use handmade fabric like khadi, handloom with hand embroidery and offer contemporary design but with Indian roots. We are working with clients like Muji from Japan and Designer Guild from UK with a capacity of nearly 5,000 pieces per month,” he stated confidently.
Young generation coming in
New generation is also entering into apparel business and is quite geared up for the future aspects just as LMNO (Life Means New Options) online brand started by Aayushi Chiripal. Just six months old, this initiative is having full support of textile giant, Chiripal Group. It is a serious effort to connect with the younger generation directly and to offer same and even more strong spirit, accurate size compared to any international brand in India.
Own store in overseas
Two-year-old Bubble Bee Export House offers semi-fashionable ladies garments and exports 80 per cent of its production to the Middle East. Having 17 retail outlets of its associates in Kuwait, the company is having its own associated manufacturing in Tirupur and Jaipur. “I started to support our stores but later we got more overseas buyers as well as Indian retailers, just because of good set-up. We are geared up for expansion,” said Murtaza, MD of the company.
