The first meter of denim in India was manufactured in 1986, making the denim a very young industry in India, which has been steadily growing at a compounded growth rate of 10-12 percent per annum over the last three decades.
1986 – 1996:
This was the first phase in the growth of the denim industry. Technology for the manufacture of denim was initially imported from Europe, the US and Japan. Most of the denim manufactured was from open end yarn and heavy, classic 14.5 ounces fabric and was used to make 5-pocket jeans for men.
The challenges in manufacturing were selection of imported and sophisticated machines for open end yarns, composite indigo dyeing and sizing machines and finishing equipment. During this decade, Indian technologists, engineers and chemists understood denim manufacturing processes and technology; developed a skilled set of people and managers to produce basic open-end denim fabric, primarily for the Indian domestic markets.
Process control and development work was extensively done in denim manufacturing factories for establishing and stabilising processing conditions and improving machine speeds, efficiencies and outputs.
By the mid-90s denim manufacturing in India was done by 7 mills producing approximately 140 million meters per annum (140 MMA) of denim fabric.
1996 – 2006
During this decade there was again a sharp increase in denim fabric manufacturing capacity in India. The capacity increased from 140 MMA to 350 MMA and the number of mills increased from 7 to 22.
Indian denim manufacturers also started exporting denim fabric from India. Exports necessitated the usage of different fibers ( like Lycra, etc.) and speciality yarns. Yarn capacities for ring spun and core spun yarns were established using sophisticated and computerised European and Japanese technologies.
The denim mills also learnt how to work with global brands like Levis, Gap and VF, with respect to their stringent requirements of shade bands and narrow standard deviations for physical fabric characteristics and fabric packing standards.
The challenges faced were to understand global (especially European) fashion trends, often from the ramps of Milan, and to work closely with fashion forecasters of women’s, children’s and men’s brands.
The denim industry became much larger and attracted talent from various functional areas like chemical engineering, textile technology, electronic and electrical engineering, fashion designers, product developers, international marketers and even logistics and commodity buyers.
During this period, the domestic market also continued to grow at over 10 percent compounded rate per annum, and brand marketers created new brands for different product categories and demanded a variety of denim fabrics from the denim manufacturing industry. Garment designing also became important as brands started demanding creative silhouettes and variety in embellishments on denim jackets and jeans. Washing techniques also gained prominence as differentiated washed looks made the product attractive.
THE DENIM MILLS ALSO LEARNT HOW TO WORK WITH GLOBAL BRANDS LIKE LEVIS, GAP AND VF, WITH RESPECT TO THEIR STRINGENT REQUIREMENTS OF SHADE BANDS AND NARROW STANDARD DEVIATIONS FOR PHYSICAL FABRIC CHARACTERISTICS AND FABRIC PACKING STANDARDS
2006 – 2014
This decade also saw a rapid growth in denim industry with manufacturing capacities jumping from 350 MMA to 1,100 MMA and the number of mills increasing from 22 to 32. While, from the total produce about 200 MMA were exported. This decade is characterised by an increase in the spending power of Indian consumer and rapid growth of retail. Also, tier -II and -III cities in India rapidly becoming large consumption centers. A distinctive change in lifestyles of the mid and upper sections of Indian society, Bollywood, international brands and fashion propelled denim growth at 10-12 percent CAGR.
The challenge for denim industry was to rapidly change technology to make a large variety of differentiated and fashion denims which include ring denims, mercerized and stretch products, coated and printed denims and stretch and soft products in a host of warp and weft colours, and a variety of fibers like Lycra, Viscose and T400.
Manufacturing challenges now include quick design change overs, smaller runs of fabric styles, management of inventory and working capital and quicker deliveries to brands.
The Indian government also, rightly so, formulated very stringent environment norms for all production facilities in the country including denim. This necessitated large capital expenditures by the denim industry in establishing effluent treatment facilities and equipment required for conforming to air pollution and environment norms.
With denim being one of the most rapidly growing textile product categories in India, it has become extremely important for the Indian denim industry to work closely with designers and brands and create collections for the coming season and years. This often meant the meeting of the minds; for e.g., a 55-year-old denim factory manager, a 35-year- old quality assurance supervisor, an 18-year-old young fashion designer from Europe and a marketing manager meeting together, and creating, designing, producing fabrics for the global and Indian consumers.
The Future
The Indian denim manufacturing capacity today stands at 1.1 BMA and this constitutes a significant 17 percent of the global consumption of 6.5 BMA of denim.
It is expected that the Indian denim capacity will continue to grow at between 10-12 percent per annum over the next five years. There would be several new challenges for the Indian denim industry, which would include:
- Understanding how to manage the very sharp volatility in raw material and cotton prices as it is now a freely traded commodity, the price of which is determined by several factors including global and Indian production, consumption, commodity speculation and even trade positions taken by hedge funds.
- As the percentage of denim exports from India increases, the industry’s profits are prone to fluctuate due to forex variations. This would be an important area of management focus.
- Sustainability is going to be a part of life going forward. The current global consumer and specially Gen-X truly believe that we need to leave a world for tomorrow which is as good, or better than today.
Efforts will need to be done to reduce carbon and water footprints. All industries, including denim, will have to clearly understand this reality and create strategies for ensuring that sustainability is built into raw materials (including cotton), equipment selection, technology, processes, manufacturing systems, effluent treatment installations, denim fabric manufacturing, garment production, washing systems and even the distribution / retail chain. - Working capital management is also going to be a major challenge for the Indian denim industry as product mixes become varied and complicated, management of inventory and receivables becomes crucial, and availability of finance from banks and institutions scarce.
- Manufacturing and technological challenges will now be in the area of flexible manufacturing, shorter lead times, shorter run lengths, quicker product changes and continuous innovation and product development.
- Attracting good quality talent to the Indian denim industry will continue to be a challenge and it would become essential for the industry to create a conducive and exciting work environment, offer career opportunities for youngsters in all areas of business, give an opportunity to managers to become ‘entrepreneurs’ for the company, and of course, offer remunerative packages in line with other industries to retain talent.
Clearly, the denim industry needs to be well positioned for leveraging long-term growth opportunities.a
