The denim industry has of late been exploring viable solutions to manage overcapacity issues that have cropped up in the last few years. Among the most popular options is the exploration of new overseas markets, strongly growing in jeans manufacturing. And, after Bangladesh, the next big target market is Vietnam that has some good jeans manufacturing units but lacks completely on strong fabric base which is in fact an advantage for Indian or other countries’ denim mills. During a visit to Vietnam, Team Apparel Online caught up with some high officials of Indian denim mills to understand the challenges that they are facing.
No doubt, Vietnam is a difficult market and its proximity with China increases the difficulties for Indian mills. Despite this, Indian companies are enthusiastic and they believe that this market will take some more years to develop, post which it will generate good orders for them. Changing international scenario does have mix impact on the hopes of Indian companies as they are little disappointed with the ‘cancellation’ of TPP but are positive after the FTA with EU came through. Even upcoming mills which are comparatively new in this industry are equally enthusiastic about this market.
Raymond UCO Denim, one of the most respected names in the Indian textile industry and in the global denim space, is also developing in the Vietnam market for the last 5-6 years. “Vietnam is an upcoming and emerging market for denim. If you look at manufacturing countries after China, especially in the apparel context, Vietnam is very big, in fact neck to neck with Bangladesh and so it naturally attracts international brands and manufacturers. But if you look at just the denim side for sourcing, it is still relatively small compared to Bangladesh. But because of its potential, our team comes here regularly. Currently, our strategy is to build our presence and visibility in this market and to be fully aware about what is going on. We are in discussion with our existing clients as well as other potential customers and they are liking our products. We will continue to stay very focused on this market,” shared Arvind Mathur CEO, Raymond UCO Denim. With an annual global capacity of 47 to 50 million metres of denim fabric and catering to premium and premium plus segments, the company is creating perfect balance between domestic and overseas markets with almost equal share in both.
“To tackle transit time issue, one has to speed up production time. Our entry into Vietnam is at the nascent stage and we are hopeful too as Vietnam is the biggest jeans manufacturer after Bangladesh.”–Yogesh Bhatt, VP, Marketing, Ginni International Ltd., Delhi
Some denim companies sought to enter Vietnam through the exhibition route and the recently organized denimsandjeans.com show in HCM City (Vietnam) that witnessed participation of nearly 30 denim mills from across the world, and also saw 5 such mills from India showcasing their collections – Anubha Industries, Ginni International, KG Denim, Malwa Industries and Ultra Denim. Surat-based Anubha Industries, which has been in the textile industry for the last 3 decades and started its denim production 3 years back, participated last year also in the same event in Vietnam. Akshat Chaudhary, Director of the company stated, “Vietnam is a developing market for us. So far, we have received good response from Vietnam and are expecting decent business here in the next few years.” The company is expecting this positivity because it is already involved in yarn and knitted segment business with Vietnam and has created a strong base in the last 5-6 years. “For denim, we are also reconnecting with our existing customers as well as new customers,” shared Akshat. Currently, Anubha Industries’ capacity in denim is 20 million metres per year and 90 per cent of its capacity is supplied to the Indian market. The company is also catering to Bangladesh and Sri Lanka.
Anubha Industries highlighted light weight fabric, super starches with multiple colours not just standard blue indigo denim, but a lot of overdyed sulphur denim also at the recently held show. Different washes (laser technology), variety of dobby, jacquard structures were also displayed. The company claims to have a unique plant where rope dyeing products are being made (all wider width loom). “Despite industry’s overcapacity, we initiated denim as it was the missing gamut which we needed to cover and it proved to be a very good step for us as we are getting positive response,” shared Aksat.
Another company from Surat, and comparatively a new entrant in the show, was Ultra Denim. With its strong and big team, the company was trying to understand the market as it was its first-ever effort in this place. Bharat Patel, MD of this two-year-old company, shared, “Whatever discussion I had here in Vietnam, I strongly feel that it will take some more extra effort and time of at least 2 to 3 years, but I am confident that business will definitely come as garmenting, especially jeans manufacturing, is increasing here. In future, we will put extra fuel as we are looking at long term and bulk business from Vietnam.”
In next 2 to 3 years, denim will be very important part of Vietnam apparel export industry.
Ultra Denim displayed mixed collection and tried to offer good variety, including rigid, stretch, etc. It speaks about having the advantage of latest infrastructure which makes efficiency, quality and wide ranges of variety its specialization. As of now with a capacity of 25 million metres per year, Ultra Denim is supplying to Bangladesh, Latin America and Canada too. “We will focus more on value-added products especially during the process stage. For menswear, our fabric is of high quality and our focus is to have the same strength in womenswear,” informed Bharat. Being associated with Prism Textile Machinery, Ahmedabad, Bharat is already having expertise in machines for denim fabric manufacturing and processing which motivated him to start his own denim fabric production.
Some important players of Vietnam denim industry
1. Saitex
2. Phong Phu Corporation
3. Protrade Garment Co. Ltd.
4. De. M. Co. Vina (Royal Spirit Group)
5. Le & Le Garment and Washing
6. Creative Resources International
Some of the mills targeting Vietnam observed that the country prefers low-cost or price-conscious products and hence, they are modifying their business patterns accordingly. Currently producing 18 million metres per annum with emphasis on quality as it is targeting prime customers, Ludhiana-based Malwa Industries prefers to offer value for money products here. Ravish Malhotra, GM – Marketing of the company averred, “We don’t want to sell volume; our priority is genuine quality. Therefore, our offerings are mainly based on value for money denim.” The company has been into this market for last two years but till now, it has not got any opportunity to work with any brands or manufacturers. “We were concentrating on it mainly due to TPP which was supposed to happen but with its cancellation, we are facing difficulties. Now we are expecting that European markets’ support to Vietnam in the form of FTA will work out and as such will also benefit for us. Even in its entirety, policies may be in favour of Vietnam, but will help us too. The only thing which is of major concern is to manage the lead time where Indian companies are lacking compared to China. We are working on it and will see how we can improve it,” he added. Beside India and Vietnam, the company is also catering to Turkey, Bangladesh.”
