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India's denim capacity to touch 1 bn mts by 2013

Capacity build up has been 10-15% CAGR, largely in innovative and premium category

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Vinay Umarji Mumbai/ Ahmedabad

Cashing in on the depleting capacities around it, India is set to touch its denim manufacturing capacity to one billion metres from the current 750-odd million metres. While existing players have been expanding on their part, the denim industry is also witnessing new players joining the bandwagon, say experts.

"People have been watching at the current denim players who have, barring a quarter or two, been exhibiting stability, profitability and growth in their denim business. This has attracted fresh players to the denim industry. The rate at which denim capacities are being added, it will touch the one billion metres mark by 2013," says Rajesh Dudeja, founder of Denim Club of India (DCI).

 

In fact, by end of 2012 itself denim capacities are expected to cross 800 million metres per annum.

"The capacity build up in denim has been about 10-15 per cent CAGR and this is in stark contrast to the rest of the world. Indian denim players have been capitalising on the growing global opportunity in two areas, namely, rapid growth in domestic market and growing uncompetitiveness in other countries," says Rajiv Dayal, managing director of Mafatlal Denim. Currently at 20 million metres, the company targets premium and high fashion denim fabric.

Refusing to divulge names and details about companies, a senior government official of Gujarat government said, "We have been witnessing a rise in enquiries from players, both textile and non-textile, who are looking to set up denim plants in Gujarat. It is well known that about 60-70 per cent of the country's denim is manufactured in Gujarat. Moreover, players are finding cost competitiveness in India much better than other countries."

According to senior textile consultant, PR Roy, India also has potential of growth in per capita denim consumption. "The population in India today stands at about 1.20 billion. With the denim capacities in the country touching one billion metres per annum mark by next year, the per capita denim consumption will still be much below one metre. This means there is a huge scope of growth in the domestic market itself," Roy adds.

Moreover, industry players say that much of the capacity addition now is happening in the innovative and premium category.

"While at 650 million metres capacity we were into basic denim, the new capacities being added are more for innovative and premium denim fabrics," adds Dudeja.

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First Published: May 05 2012 | 12:58 AM IST

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