Just two years ago the total denim fabric capacity of the country was around 180 million metres/annum, while today according to latest estimates it is over 320 million metres/annum, a nearly double the increase in the capacity. Yet, according to research agency BRAC EPL Research, shortfalls in denim requirement of 40% still remains and this shortfall is being met by mills mostly in China, India and Pakistan.
Bangladesh is a country which is taking huge strides in the fashion-driven denim category, building huge capacities in both fabric and jeans manufacturing. Interestingly, around 20 big companies into the business of denim fabrics today started their productions between 2004 and 2006. While less than a decade ago, the country was only about basic five-pocket jeans, today the facilities being constructed by denim players has made it possible to feed even the differential needs of brands like M&S, C&A, Zara, Next, Lindex, Nautica, Tommy Hilfiger, Wrangler, Lee to mention a few. It has been a successful journey and one of the biggest contributors has been the willingness of the industry to invest in fabric mills, garment machines and washing and finishing facilities. In fact, though the strength of this country is still its ability to produce volumes, with 70% of produce for the masses, top manufacturers are moving towards fashion products with around 30% of total jeans exported coming under the category of fashion.
Supporting the denim manufacturers is a growing base in fabric, now matured to offer huge variations in terms of new weaves and finishes. “Comparing to the last decade we can say Bangladesh has grown both business share and new product diversification rapidly. We are now producing a lot of sustainable products in denim. We are the first denim mill in Bangladesh which is going to launch selvage denim, which is a clear indication that Bangladesh is now at par to any denim producer in the world,” says Showkat Aziz Russel, Managing Director, Amber Group (Partex Denim). The company produces 45.6 million yards/annum of differential denim. “For us China is the only competition; India is not so much as it is busy catering to its own domestic market needs which is huge. I think India would be buying denim fabrics from Bangladesh in future,” he adds.
The confidence of the fabric producers is very high, says Ranjan Chowdhary, Managing Director, Nassa Group, adding “About five years back we were dependent on imported denim fabric from China, India and Pakistan. Today we have about 20 very good mills which are producing denim at par to China, Pakistan and India in terms of quality as now every mill is investing hugely on state-of-the-art imported machineries especially on the weaving and processing side. The way we are going five years down the line you never know that we start producing the denim quality which Turkey is producing today!” The company which is producing 18 million yards/annum feels that the only limitations for growth are the shortage of gas, raw material and skilled technicians. Yet, undeterred companies have hired foreign technicians to produce world class denim in Bangladesh.
[bleft] According to industry watchers Bangladesh exports around 200 million pieces of denim apparel per year to the US and EU alone with many other markets now looking to source from the country. Supporting potential growth, is an expanding fabric bases with the top 17 denim fabric manufacturers in Bangladesh accounting for over 350 million metres per annum…[/bleft]
Envoy Textiles Ltd. (ETL), a part of the Envoy Group started its journey in March 2008 with an installed capacity of 20 million yards of fabric per annum. Within a short span of less than 6 years, it has established itself as one of the most reputed Denim supplier in the country, exporting the denim fabric to other countries including Turkey, Egypt, Kenya and Sri Lanka. The latest in the list of countries is China. “All this has been possible only because of our strict quality norms which are followed according to the global standards,” says Manish Khanna, Director, ETL. The company is now in the expansion mode and will be increasing the installed capacity to 50 million yards per annum by May 2014. It has 2 rope dyeing units and manufactures all kinds of denims starting from 4.50 oz/sq. yd., going up to 15.00 oz/sq. yd., in rigid as well as stretches. It also has the flexibility to do regular, coating as well as flat finishes.
Among the biggest companies in denim is Ha-Meem Group and what makes it stand apart is a sound infrastructural setup, bringing in the latest machines and technologies so that quality and productivity is never compromised upon. The company is producing 42 million metres per annum of denim fabric with rope dyeing facilities. They are also planning to invest in spinning to complete the supply chain. In garmenting the company is handling 5 million pieces per month, with plans to take it to 7 million pieces per month by 2015. The integrated operations of the group have helped to bring down the lead times drastically from the Bangladesh average of 120 days to a mere 60 days. “This is a great achievement for us as we are able to meet our orders in half the time,” says Md. Delwar Hossain, Deputy Managing Director, Ha-Meem.
The Mahmud Group, consisting of Mahmud Spinning Ltd., Mahmud Denims Ltd., Mahmud Jeans Ltd. and Mahmud Washing Ltd., is now one of the leading denim companies of the country producing 1.4 million metres of fabric per month, and a capacity to produce around one million pieces per month of jeans. “We are selling 75% of denim fabric within Bangladesh and 25% is for our in-house consumption, producing specialized fabrics like cross hatch, slub denim and stretch denim for brands like H&M, Next, Esprit, Kiabi, Lindex to mention a few,” says Gazi Mahbubul Alam, Director, Mahmud Group. Another integrated player Royal Denim is producing around one million metres of denim per annum, of which captive consumption is around 40%, manufacturing around 2,00,000 pieces per month in their seven line unit. “Given an option, I would always prefer being known as a textile company, capable of delivering any requirement and capacity to support the growth of denim category in Bangladesh,” says Abu Jafar Nizami, Managing Director, Royal Denim Ltd.
[bleft] There are 40 major players in Pakistan including Artistic Fabric Mills, Pak Denim Limited, Al-Ameen Denim Mills Limited, S M Denim Mills Ltd., Denim International, Classic Denim, Rajby Industries and Kassim Textiles, all of whom are eyeing the Bangladesh market with their value added and processed denim. [/bleft]
While many vertical companies have capacities for other jeans manufacturers, Beximco Ltd., which is producing 20 million metres per annum, has strategically decided to have complete captive capacity for special fabrics like Nitrogen injected indigo range and Bull Denim in a variety of reactive colours ranging from 10 oz. to 13 oz./yd.; in fact they do a lot of customized fabric. This gives the company an edge with very specialized fabric, while for regular orders denim is purchased from other mills or imported. Taking the level of what they can offer a notch higher, latest equipment has been installed in the laundries. “We not only want to offer quality and variety, but also be eco-friendly and sustainable, so we have invested in ozone machines, as washing units consume a lot of water,” informs Syed Naved Husain, Group Director & CEO, Beximco Ltd.
Interestingly, claiming to be the biggest denim bottoms manufacturer out of the country, Tusuka Fashions which manufactures 1.8 million pieces of five-pocket jeans per month, from its six world-class manufacturing facilities, located in and around Dhaka does not believe in backward integration. “It is not difficult for me to invest in fabric, but it would kill my ability to source fabrics from the finest mills of Faisalabad in Pakistan to the depths of Thailand as I would be boxed by the setup of my textile facility. This would further limit my product development and I will lose my niche as a denim bottoms manufacturer. Moreover, Bangladesh is a garment manufacturing country not a textile giant like India; hence we should stick to our roots,” says Arshad Jamal, Chairman, Tusuka Fashions.
Similarly, Armana Group a US $ 120 million company and a big player in denim garments with over 6,000 machines, producing 1.2 million units a month out of which 70% is denim bottoms believes that it is more viable to outsource fabric than setting up your own fabric plant. “What most jean factories have invested in is washing plants and today all the major exporters who ship and manufacture denim definitely have the capability to do any kind of finish, at par to what is done in Hong Kong or even South America,” reasons Syed Asad Ali, Director, Armana Group who is sourcing fabric from India, Pakistan, China, Turkey nd Taiwan With two laundries dedicated to denim washes, the US $ 70 million M&J Group is manufacturing one million denim bottoms a month and is reputed to have one of the best washing facility in Bangladesh. “It doesn’t matter where the fabric comes from Bangladesh, Pakistan or India, we add value at the garment stage with the support of a product development team that works only to create new finishes and taking inspiration from global trends we can offer some very unique finshes,” says Salahuddin Ahmed, Director, M&J Group.
It is because of companies like Tusuka, Armana and M&J Group that many Indian companies such as Arvind are flourishing in the country with many varied offerings in denim fabric. In fact, many of the top companies are eyeing Bangladesh particularly as China gets expensive. “Chinese fabric costs 10-15 cents more than India’s now and buyers are more than happy to come to India,” says Ashish Shah, MD, Aarvee Denims. Denim fabric produced out of Chinese factories now costs US$ 2.60 to US $ 2.65 against India’s US $ 2.50 per metre. China is no more competitive and hence, India becomes lucrative for international buyers. Aarvee is running its 84 million metre capacity denim plant full steam and exports to converters in Latin America, Egypt, Sri Lanka and Bangladesh.
European brand s.Oliver has diverted its China orders to Bangladesh. “This has converted to substantial increased business for us (fabric for a lot of the garments stitched in Bangladesh is sourced from India),” says Subir Mukherjee, Head (Marketing and Commercial), Arvind and whose clients include Walmart, GAP, Levis. Of its 110 million metres of denim produced per annum, Arvind exports near about 3 million metres per month to Bangladesh for conversion. Even relatively newer companies like Soma Textiles, who are nominated suppliers to M&S are in demand in Bangladesh. Abhijit Gohil, President of Soma Textiles and Industries Ltd. says the company will increase its capacity by 10 million metre in next six months to stand at 24 million metre to tap the opportunity arising out of China’s problems.
As of today, China, India, Pakistan and Turkey are the largest manufacturers of denim fabric worldwide. China used to produce 3 billion metres, but its current production stands at 1.5 billion/metres. India has achieved the milestone capacity of one billion metres in 2013, while Pakistan is producing about 600 million metres and Turkey 500 million metres each. Bangladesh with its fast growing fabric bases is fast catching up. Many Bangladesh watchers feel that the country would become self-reliant in terms of denim fabric production within five years, and would only use imported fabric which is nominated by the buyers. Says Mayank Jain, Vice President-Marketing, Malwa Denim, India, “Bangladesh gains importance for us, since lot of our US/EU customers nominate our fabrics and which goes to Bangladesh for garment production for those customers. Apart from this, we have very good relations with many garment factories, who promote their garment business using our fabrics, and hence, in return push-up our fabric business further. We export slightly under 2 million yards per annum to the country.”
Pakistan, another major producer of denim fabric with a total capacity to produce over 600 million metres of denim fabric, exported 126 million metres of denim fabric to Bangladesh in 2011-12. “Bangladesh has always been one sector that we have exported to most, and seeing that this country can provide a unique diversity to garment manufacturing, we always seek to keep strong and fluid business relations with brands and garment manufactures in the country,” concludes Sohail Ahmed, Business Developer, Kassim Textiles, Pakistan. The company produces 36 million metres of denim per annum.
