Financial Daily from THE HINDU group of publications
Tuesday, Jun 17, 2003
Financial Daily from THE HINDU group of publications Tuesday, Jun 17, 2003 |
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Corporate
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New Projects Mafatlal Burlington plans denim capacity expansion Anna Peter
Mr. Rajiv Dayal
MUMBAI, June 16 MAFATLAL Burlington Industries Ltd (MBIL) is planning to expand capacity from the current 10 million metres per annum to 20 million meters per annum to take advantage of the renewed interest in differentiated denim worldwide. A 50:50 joint venture company between the $1.3-billion Burlington Industries, USA, and Mafatlal Industries Ltd, MBIL's turnover in 2002-03 was Rs 120 crore and is currently operating at full capacity. According to Mr Rajiv Dayal, Chief Executive Officer, MBIL, this is up significantly from the 50-60 per cent capacity utilisation registered four years ago. It is also looking to leverage its distribution systems, brand strength and customer relationship to improve business. According to Mr Dayal, the potential for growth in India was enormous and the Indian denim segment alone would register 8-15 per cent growth over the next few years. These would result from the spurt in incomes, consumerism and retail sector growth currently being witnessed in India. From 15 per cent 5 years ago, its exports now account for 85 per cent of production. Of this, 40-50 per cent is exported to Europe, 15-20 per cent to the America, and another 15-20 per cent to South-East Asia. It has over 25 countries on its export list. He added that the domestic sales could even rise from the present 20 per cent to 30-40 per cent as the market scenario improved. From the quality and export points of view, the various certifications it had acquired, such as ISO 9001, ISO 14001, Oeko-Tex (for products and processes) and membership in the Cotton Gold Alliance had bolstered the image of its products in foreign markets. In fact, Mr Dayal is confident that denim will grow at the expense of blended fabrics, attributing the increased demand to consumers and fashion designers, whom he said had transformed "denim into another avatar". So now instead of the stoic, hardy denim jeans of a few years ago, such differentiated products as lightweights, flower prints, embroidered denims and low-waisters are throwing up huge opportunities. The company is also in a pact with DuPont Textiles & Interiors to blend lycra into its products for the global market. While the company's product plank started off with basic denim, it began to introduce differentiations with the aid of Burlington's product development section in the US.
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