Arvind, Ashima to ramp up operations

Eyeing opportunities following the abolition of the quota system in the textile industry from January 1, 2005, textile majors in Gujarat, Arvind Mills and Ashima, are beefing up operations.

While Arvind Mills is looking beyond the opportunities in the denim market with its shirt manufacturing facilities, Ashima is restructuring its finances in an attempt to ease its debt burden.

Sanjay Lalbhai, managing director of Arvind, said: "The abolition of quotas will be a turning point for the textile industry in general and Arvind Mills in particular. The opportunity throws a challenge for the industry to become among the most competitive in the world. Arvind, being a leading supplier of fabrics to leading brands of the world, plans to move up the value chain and supply garments to international customers."

"The company has already initiated steps to integrate vertically in all garment segments like denim, shirtings and knits," Lalbhai added.

Arvind, which commissioned a unit in Mauritius in October this year for the manufacture of denim garments with a capacity of 1 million pieces per annum, plans to expand capacity by 2.1 million pieces by March 2004.

The company has also recently raised the capacity of its shirt manufacturing plant in Bangalore to 4.8 million pieces from 2.4 million pieces per annum. Presently, around 12 per cent of shirting fabrics are converted into shirts and 16 per cent of its knits as knit garments.

This percentage is likely to go up in the next few years. Arvind has also managed to restructure its debts and boost its financial health considerably.

Meanwhile, Ashima, another Ahmedabad-based textile major, is targeting to boost its revenue from exports.

"Ashima is aiming to raise its exports to at least 60 per cent of its total sales by the year 2006. The company at present exports around 35 per cent of its total sales. In fact, the textile majors are now looking seriously towards the export market," said a market expert.

In another development, a team of experts from Wal-Mart visited Ashima's facilities in Ahmedabad in November. The Ahmedabad-based company hopes to get high-value orders from Wal-Mart in the next fiscal year.

Ashima officials could not be contacted for their comments on the company's future strategy. "Dismantling of the quota system throws up a large opportunity for India which has the advantage of having a large pool of skilled manpower available at reasonable costs. The government has already set a target of doubling exports of textiles in the next five years. To make the industry more export-oriented, the textiles ministry is working towards setting up textile parks across the country," said a textiles ministry official.