Rahul Shah
Managing Director LB Tex (Kanchan Group)
It is important to ensure that denim keeps innovating itself
Headquartered in Bhilwara, Rajasthan, Kanchan India Ltd supplies fabrics and denim to many leading brands across India and worldwide. At the recently concluded Gartex Texprocess India, a comprehensive tradeshow on garment & textile machinery, Fibre2Fashion spoke to LB Tex's (Kanchan Group) Managing Director Rahul Shah about high cotton prices, eco-friendly denim and government support.
Cotton prices are currently at a record high both in domestic and international markets. How is this affecting the Indian denim industry?
Indian market is doing well in terms of demand, but sudden and fast increase in raw material prices cannot be absorbed by the fabric manufacturers immediately. It will take time. So, the increase in raw material price needs to percolate downstream in few months. Rising raw material prices is always a challenge, but generally speaking, denim has been able to absorb the price increase quite well. In the last one year, the new fabric prices on average have gone up at least by 25-30 per cent.
The difficulty is that we are not able to get the same increase in export markets where we are competing with other countries like China. Secondly, freight price from India to various destinations like Latin America, Egypt and the US has gone up. Further, India’s cotton price is about six to seven per cent higher than international cotton prices, which again puts us at a disadvantage compared to our competitors in the export market.
Overall, we are finding it difficult to compete in the export market in the last couple of months, but we are able to survive due to the domestic market.
Indigo dyes are integral to making denims. With concerns over sustainability rising every day, do you foresee more use of eco-friendly dyes? By when can we expect all denim production to go 100 per cent eco-friendly?
Terms like sustainability and eco-friendly have different meanings in different contexts. So, it is not about using only eco-friendly dyes. Indigo already is a very eco-friendly dye as it is a naturally grown product which fades with every wash. So, some chemicals are put on it before it is applied to the fabric.
So more than indigo, the sustainability concern must be in terms of process. Several questions need to be asked here. Is there liquid discharge during denim fabric production? Is the power being used in production coming from 100 per cent renewable source? Are you making sure that you are using less water and only renewable energies? Is the raw material being used is sustainable; is it organic or BCI cotton? Is the polyester that you are using sustainable; is it GRS certified polyester? In short, the whole production process has to be sustainable.
Sustainability is currently the buzzword, and it is going to remain so for the next 10 years. It is important to ensure that sustainability is practiced in all areas, and not in a single area.
What is the size of denim market in India? At what rate is it growing?
There are no exact figures available about the market size in India. But denim is a fabric that does not go out of fashion. Today, denim is worn by people across all generations from children to old-age persons. In addition, a lot of new innovations are happening, and new denim products are coming into the market. Plus, it is a comfort fabric which can be worn for several days without washing. So, undoubtedly India’s denim fabric market will keep on growing. It should grow at an overall rate of 8 to 10 per cent, which is normal. More important thing is to ensure that denim keeps innovating itself, keeps reinventing itself, and does not go out of fashion.
What is your present denim capacity? Do you have any plans to increase the same because of increasing demand?
As a part of the Kanchan Group, we have a capacity of 10 million metres a month. We are putting up our new denim plant under the name of LB Denim at Ahmedabad. It will start production next year, initially with a capacity of 2.5 million metres, and will increase to 3.5 million metres in the next two years. Apart from that, we are also expanding our capacities in Bhilwara and Surat. So, we will grow to a capacity of 15 million metres a month in the coming three years.
What is your domestic vs export sales proportion? How do you plan to keep the same in future?
As a group, we have been more domestically focused because of our products and capacities. It is only in the last two years that we are looking at exports. Our current ratio is 90 per cent domestic and 10 per cent exports, but we are looking to really grow this to 35 per cent export and 65 per cent domestic.
What are your expectations from the present government in terms of policy support for making denim industry more competitive?
We have already made representation to the government asking for benefits to be given to manufacturers who put up integrated setups for denim, which includes spinning, weaving, dyeing and finishing, under a new scheme which is expected to be launched this year. I am sure the government will consider our suggestion and come out with special benefits for denim players to set up integrated units.
Published on: 01/06/2022
DISCLAIMER: All views and opinions expressed in this column are solely of the interviewee, and they do not reflect in any way the opinion of Fibre2Fashion.com.
