Arvind, one of the largest integrated textile, apparel and branded apparel players is expanding its denim manufacturing capacity to 140 million meters by setting a up 30 million meter denim manufacturing plant in Bangladesh.
For this purpose, Arvind is entering in to a joint venture with the Nitol Group of Bangladesh. The company will set up 30 million meters of manufacturing capacity over a period of 3 years with a total investment of $ 60 million. The phase 1 of 10 million meters will be set up over next 12 months with an investment of about US $25 million.
Bangladesh is among the fastest-growing garment exporters in the world. It is expected that with lower cost of wages and high productivity the country will continue its growth momentum. Demand for denim fabrics in Bangladesh is growing more than 25% and is currently at 280 million meters. Out of this, approximately 180 million meters are being manufactured locally and about 100 million meters are imported.
Commenting on the development, Jayesh Shah, Director & CFO of Arvind said, “We look at Bangladesh as a strategic location in view of the unique advantages it offers. Garments exported from Bangladesh do not attract any import duty if the fabric is manufactured in Bangladesh. The wage cost in Bangladesh is amongst the lowest in the world. We will manufacture high-quality denim fabric to cater to the requirements of European countries. Since we are already exporting 36 million meters of denim to Bangladesh annually, we have a ready market available and hence the proposed plant will be profitable from day one.”
Arvind`s JV partner Nitol Group has a turnover of US $100 million. Nitol Group has a joint venture with TATA Group and VIP Industries for Bangladesh. Nitol Group will have a 20 percent stake the JV company.
Arvind Mills was set up with the pioneering effort of the Lalbhai brothers in 1931. With the best of technology and business acumen, Arvind has become a true Indian multinational, having chosen to invest strategically, where demand has been high and quality required has been superlative. Today, The Arvind Mills Limited is the flagship company of the Rs. 20 billion (US$ 500 million) Lalbhai Group.