After witnessing a sluggish trend for the past couple of quarters, denim manufacturers have reason to cheer. With various countries recovering from the global financial meltdown, orders have started pouring in for many denim companies.
The revival has been such that denim players are experiencing a tsunami of orders. Arvind Limited, India's largest denim producer based in Ahmedabad, has its hands full with export orders. The firm has a denim production capacity of 75 lakh (7.5 million) metres a month.
"While retailing in foreign countries is still at a low point, exports are increasingly getting better, especially in markets we cater to. The markets include the US and European countries. Our order books have reached our full capacity," said Jayesh Shah, chief financial officer and director of Arvind Ltd.
The denim manufacturer is currently pricing the fabric for export markets at $2.70 per metre (Rs 130 approx.)
Another Ahmedabad-based denim major, Aarvee Denims & Exports Limited, echoes similar sentiment. "The economic revival is now clearly visible through our export order books. Enquiries have been pouring in. However, due to high cotton prices, profitability has been cause of concern for us. Otherwise, we are running at full capacity," said Ashish Shah, managing director of Aarvee.
Currently, Aarvee caters to South American and European markets from where orders have increased in recent times, said Shah.
"The market has showed noticeable improvement. Denim companies, operational in Gujarat, Maharashtra and Punjab, have received fresh orders. The order book of many companies is full for two to three months. Countries such as France and Japan have come out of recessionary pressures and this has helped improve denim demand," said Arun Dalal, owner of Arun Dalal & Co, another Ahmedabad-based leading cotton trading firm.
