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Unutilised capacity is slowing down denim projects in India”, Subir Mukherjee, Bhaskar Denim

Unutilised capacity is slowing down denim projects in India Subir Mukherjee Bhaskar Denim 001With an emphasis on sustainability in its products and processes, Bhaskar Denim, one of the largest denim fabric manufacturers and suppliers in India, is focusing on super-stretches and indigo top structures with specialty prints. The brand launches two collections every year: Spring/Summer and Fall/Winter. “There is a trend towards reduced weight and enhanced hand feel,” says Subir Mukherjee, Business Head-Denim. “The installed capacity of denim fabric in India in terms of dying modules is about 1.7 billion meters. The installed capacity, over the last five years has grown at a CAGR of 15 per cent; another 200 million new capacity is in the pipeline with the actual production likely to be around 1.1 billion meters. Our own capacity is around 44 million meters,” he notes.

Denim development in nascent stage

Focusing on forging deeper relations with clients, BhaskarUnutilised capacity is slowing down denim projects in India Subir Mukherjee Bhaskar Denim 002 Denim works with only select customers. “Some of our international customers are involved in garment conversion, while for some Indian brands, we export the fabric that are eventually converted into garments and imported back to India,” Mukherjee says. “We supply to all Indian and global brands like Wrangler, Levi’s, etc,” he adds.

Growth in Indian denim market is fuelled by domestic demand, especially in the men’s segment. “Over the last 5-7 years, Indian investment focused on capacity building rather than developing advanced processes,” states Mukherjee. “Hence, jeanswear in India is still in a nascent stage of evolution.”

Unutilised capacity slows down projects

Mukherjee points out, domestic consumption is growing at a rapid speed and is expected to continue for next few years. Higher penetration in women’s wardrobe is likely to be the main growth driver. “As a huge amount of capacity remains unutilised, new investment in fabric is likely to be slow for next few years,” Mukherjee observes. “Garment capacity for home consumption is largely fragmented. The un-utilised capacity is likely to slow down new projects,” opines.

He feels with current import duty structure, denim fabric import into India is not a serious threat. “However, garment import from Bangladesh under our bilateral treaty is increasing. As India is currently not a destination for denim garment sourcing for many international brands. There is large scope for development in this field,” he adds. What works for India is a large domestic market and abundant cotton availability. However, lack of technical knowledge is impending growth.

No plans for capacity expansion

Bhaskar Denim is not looking at capacity expansion as of now. With denim fabric prices in India under serious pressure due to rising input costs. He feels, over supply has led to a decline in fabric production over last couple of years. “We do not have any plans of capacity expansion in near future. As we have a wide product range, our aim is to balance this capacity vis a vis the growing market demand,” he sums up.

 

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