Quota dismantling spawns raft of orders for the garment industry

The order books of almost all the garment majors, such as the Arvind Mills Ltd, Ashima group, Aarvee Denims and Exports, and Welspun India, are full.

"We are witnessing a surge in demand for garments after the removal of quotas, and currently we are operating around 95 per cent of the installed capacity," B Ravi, vice-president, corporate finance and company secretary, Ashima group told Business Standard.

To meet the increase in demand, the Rs 470-crore company has tied up with spinners and weavers and with the manufacturers of yarns and fabrics so that the company will have adequate capacities.

The Ahmedabad-based Rs 1,450-crore Arvind Mills is currently operating at around 100 per cent of its installed capacity. The company has recently integrated vertically in all the product groups such as denim, shirtings and knits.

To meet the international demand, the company will set up a cotton trouser unit and a jeans plant in Bangalore. After the expansion, the company's production capacity will double to over 14.4 million pieces from a single shift, from the current production of 7.2 million pieces.

"We supply garments to world's leading brands. We have already taken steps to move up the value chain and supply garments to international customers. Our knits garment section is operating at its full capacity," said Karthik Krishnan, senior manager, corporate finance of Arvind Mills.

Arvind plans to increase the garment production to over 28.8 million pieces on a double shift basis in the next two years. The proposed new garment facilities, the 2.1 million pieces per annum jeans unit and the 1.5 million pieces per annum khaki unit at Bangalore, will be ready by the end of 2005 fiscal year.

Arvind is also expanding its knits garment capacity in Ahmedabad to 4.2 million pieces per annum.

To take the full advantage of the robust demand for denim, the company has invested over Rs 10 crore for debottlenecking its manufacturing facility.

Ahmedabad-based Aarvee Denims is currently operating two manufacturing plants at their full capacity. The company had recently expanded the denim manufacturing capacity by 11 million metres.

"We need to gear up for the price war with China. Our order book position is better as compared to last year and we are operating at 100 per cent of our installed capacities," said Vinod P Arora, chairman and managing director of Arvee Denims.

Welspun India, the biggest makers of terry towels also has witnessed huge surge in demands.

"We have already exported over 1,000 tonne to the US market within the first two months of opening up of quotas. Our existing towel and spinning unit at Vapi is operating at 100 per cent of its capacity," said official spokesperson of Welspun.

The company's new facility at Anjar, Kutch with total project cost of over Rs 575 crore commenced its commercial production recently.

The new facility has a terry towel capacity of 13,000 metric tonne per annum, cotton spinning capacity of 25,000 spindles and sheeting capacity of 35 million square metres per annum.