Aarvee to shift focus to non-denims

Aarvee Denims and Exports Ltd, India's second largest manufacturer of denim fabric is on a drive to re-define its business strategy by focusing on non-denims and garments, reducing its dependency on denims in the process.

The company is also in talks with international retail majors like JC Penney and Wal-Mart for exporting garments.

The denim market has been sluggish due excess supply and falling demand for exports this year. In a bid to focus on newer segments, the company has planned a 25,000 per day manufacturing facility at an investment of Rs 100 crore to be operational by March 2007.

At present, 75 per cent of the company's revenues are from denims while the rest comes from non-denims and garments. With the focus shifting firmly to the later, post expansion, the company expects revenues from denims to fall to 40 per cent, while that from non-denims and garments are expected to rise to around 40 per cent and 20 per cent respectively.

"The change in strategy has come about due to the stagnant denim market as well as the rising demand for non-denims and garments in the export markets, " said Vinod Arora, CMD, Aarvee Denims and Exports Ltd.

Of its total monthly production of 75,000 garments, the company supplies 50 per cent to Pantaloons and the rest is used for Aden, its garment brand which has been available in Gujarat and north India.

In a phased expansion plan, the company is set to ramp up its production facility to cater to retail chains that have made orders of 50,000 garments per day.

"At present, we are catering only to Pantaloon's B.A.R.E brand but if we can increase our production we might even start supplying to the other five-six brands that Pantaloon owns as well as other retail chains, " said Ashish Shah, MD, Aarvee denims and exports.

According to unaudited results for the quarter ended September 30, 2006, the company's income from sales including exports and wind farms for July-September period totalled Rs 68.04 crore as against the last year 's income of Rs 78.20 crore. The company has declared an interim dividend of 5 per cent.