Despite rising cotton prices and margins taking a hit, denim companies in Ahmedabad are anticipating brighter days. Expecting better demand in the coming days, denim companies in the state are taking up expansion of capacities for the year ahead.
Ahmedabad-based denim makers such as Chiripal Group and Jindal Worldwide have decided to increase their denim production capacity, while Aarvee Denim has recently increased the capacity.
At an investment of Rs 100 crore, Nandan Exim, the denim arm of Chiripal Group is expanding its capacity from 30 million metres per annum to 50 million metres per annum. "We have successfully completed phase one of our capacity expansion. While the current capacity stands at 40 million metres as against 30 million metres last year, we are adding another 10 million metres in the near future," says Deepak Chiripal, chief executive officer of Nandan Exim Limited.
Another denim maker Jindal Worldwide Ltd. is also upbeat about the denim market and it has set the ball rolling for expanding its denim production capacity.
Industry sources say that Jindal Worldwide is in the process of increasing its denim capacity to 35 million meters per annum from current 20 million meters.
According to Chiripal, the capacity addition is a direct result of better demand in both domestic as well as overseas markets. "We are expecting better orders in the coming days, not only from existing markets but also from fresh ones," he adds.
Domestic denim market has seen a momentum in growth, which is likely to continue atleast for next two years. "The denim consumption in US is around 35 to 40 pairs per person, while in India it is still 5 pairs. This itself shows that there is a huge growth potential in the domestic market," say industry experts.
Considering the growth potential in both domestic and export denim market, city-based company, Aarvee Denims and Exports Ltd has recently increased its denim production capacity by 20 per cent. "The denim industry is continuously growing at the rate of 15 per cent," said Vinod Arora, CMD, Aarvee Denims.
