Denim makers all set for expansion

Local entrepreneurs are investing heavily in denim, as at least six new factories will come into operation this year to meet growing global demand.

“We will start producing an additional one million yards of denim fabric a month in the next three months,” said Kutubuddin Ahmed, chairman of Envoy Group. It produces three million yards a month at present.

“I know that five to six other groups have already installed machinery to produce the fabric,” Ahmed added. Currently, he purchases 60 tonnes of yarn a day from local yarn makers to produce denim.

“To meet growing demand, we are now establishing a new spinning mill at a cost of $30 million to produce 50 tonnes of yarn a day. Production at the new factory is scheduled to begin in the next 18 months.”

In the middle of 2013, denim lost much of global demand to jeggings, a kind of stretch fabric. “But people rejected it later due to poor quality. Western buyers now returned to denim," Ahmed said.

Bangladeshi entrepreneurs supply denim to major retailers and brands, including H&M, Uniqlo, Levis, Nike, Tesco, Wrangler, s.Oliver, Hugo Boss, Puma, Primark, JC Penney, C&A, Tommy Hilfiger, Inditex, Walmart, M&S, Calvin Klein, Diesel, Gap, Channel and Dior and G-Star.

Bangladesh exports denim fabric and denim garments worth more than $600 million a year to the $60 billion global market, industry insiders said.

Bangladesh has 25 denim factories that produce around 20 million yards of denim fabric a month. Total investment in the sub-sector stands at Tk 6,500 crore.

Bangladeshi firms meet 40 percent of demand for fabric by the local denim makers and exporters; imports account for the rest.

Demand for denim fabric is high worldwide, as denim garments are comfortable and fashionable, said entrepreneurs.

“The sector is maintaining slow but steady growth. The country will definitely perform better if the political environment remains stable,” said Showkat Aziz Russell, managing director of Partex Denim.

Denim makers have to be creative in design, said the chief of one of the largest denim makers in Bangladesh.

“They should be passionate about the products, customers and markets, as the business is linked to both local and international markets.”

 “There are some denim makers who are facing troubles with bank loans," Russell said.