IMPRESSIONS from a Cross-section

Development is especially important in the denim market because of demands for novelty and performance. There are 2 aspects to product development of fabrics. Product development is usually thought of as creating a product for the market with significantly different colors, appearances (flat, slubs), hands (soft, raspy) or performance (stretch, permanent press).

The other aspect of product development, equally important, is product improvement, which includes reducing defects, improving performance (shrinkage, stretch, reducing costs).

The leading denim companies in the U.S. conducted extensive research into solving the mysteries of denim production, especially in dyeing and finishing. Outside the U.S., there are some denim companies in countries like Italy, Turkey and Japan that are well-known for their quality.

While most of the denim factories in the U.S. were closed by the late 1990’s, there are still 4 operations remaining, no large establishments are left, only 2 small and 2 medium operations.

The 2 small operations (Cone and Denim North America) are dedicated to high-fashion denim, while the 2 medium-sized companies rely primarily on producing large quantities of a few basic styles, but with high levels of quality.

One of the medium-sized operations, Mount Vernon, also produces significant quantities of non-denim fabrics which provide financial stability and flexibility in textile markets. The other, American Cotton Growers, also produces a line of fashion denims that are in strong demand.

Producing the highest-level quality denims may be the surest route to long-term success. The higher-fashion market is unpredictable and makes sudden changes that have had the effect of a financial earthquake on denim producers that struggle with specialty denim. Mixing basic and specialty denim in the same production operation can complicate manufacturing to the point where effective control is lost.

There have been thousands of different denim fabrics produced and only a few hundred have experienced significant commercial success.

With the exception of minor variations, such as the use of unusual fibers like bamboo or application of special chemicals like polyurethanes, very little truly original denim has appeared in many years.

For the most part, the same denim fabrics are re-cycled in cycles of perhaps 5 or 10 years. They merely seem to be new because of their long absence from the market. An excellent example of this is “antique” or “authentic” denim as it is called. Around1980, the U.S. denim industry had nearly eliminated all shuttle-weaving in favor of rapier or projectile weaving. The denim that we were weaving on the shuttle looms was less than a meter wide, which was no longer acceptable to the market. All of the shuttle looms were sent to the warehouse and no one expected to see them again.

(Contd.)

Talking globally, Pakistan has an advantage of having an abundance of cotton and greater experience in this field. Bangladesh is catching up fast and with their advantage of cheaper labor we often compete fiercely with them on price. Pakistan has an edge due to the availability of the Basic Raw Material though and having the Yarn locally produced. Pakistan has also benefited from a more favorable exchange rate for export in recent times. China has historically been a strong competitor but lately we feel we have come to par with them as the number of local trained Professionals and Technicians for the Denim field increases in Pakistan. We strive to continuously improve and enhance ourselves to rise above the competition from this region.

Presently there are about 28 denim mills in Pakistan, and about 35-40 companies involved in denim fabric or denim garment production. The monthly production is about 30 million meters of finished Denim Fabric. Direct Employment of 18,000 People in industry. A major part is employment on contractual basis. The Textile sector contributes to a 60% share in the exports of the country.

Moreover, in Pakistan, Denim Production is on top in Textile Sector due to Export & Garments Industry. Export of denim has shown a 27% increase per annum in the Dollar value since 2005. Denim is now one of the key apparel sectors and the driving force behind the apparel exports of the country. Total apparel exports from Pakistan were approx US$ 1.23 Billion in 2008-09. This sector still has potential for further growth.

In Volume terms the developed world will not grow at all, remaining at 1240 million units  of jeans, the rest of the world will grow by 13 per cent to 783 million units. In total this means that world volume growth will be 4.8 per cent, delivering 2024 million units.

But talking about in Value terms, Value growth is effectively zero. In the short term the world market will grow by 1.5 per cent in volume and will fall by 3 per cent in value in long term. This is because of continuing downwards price pressure from retailers in USA and Europe, elimination of tariff and quota barriers to low cost imports from the developing world, Overcapacity Global installed capacity of denim.

Every season we see something new and innovative in this field and that really excites us. The glamour associated with denim is quite attractive as well. You constantly see it featured in movies, endorsed by celebrities, on the runway and now it’s making its way into Couture. Also, the various denim tradeshows provide an opportunity to network with denim lovers from around the world, teaching you a lot about the industry and its infinite possibilities.

(Contd.)

The world denim market is likely to grow continuously for the next few years. However, supply is growing at a faster pace. The World Jeans Market was 51.6$ Billion in 2007. It is expected to become 56.2$ billion by 2014. The global demand is growing at 5% while supply at 8%.

Global Denim fabric production in 2006 was 2.7 billion meters. Over 50 percent of denim production is based in Asia with China, India, Turkey, Pakistan and Bangladesh. 70% of world jeans consumption is between EU, US and China.

Estimated Share of Jeans Purchase By Region

·         North America : 39%

·         Western Europe : 20%

·         Japan & Korea : 10%

·         Rest of the world : 31%

No. Of Denim Mills Worldwide

The past floods really have been quite catastrophic. However, fortunately for the Textile Industry the flood waters did not affect any of the major urban cities. The main impact has been through the damaged cotton crop. There is some speculation that around 2-3 million bales might have been affected.

*******