Financial Daily from THE HINDU group of publications
Friday, May 30, 2003
Industry & Economy
Denims in for a new feel with Tencel blends
MUMBAI, May 29
DENIM, one of the most important fabric exports of the country, is now getting a new feel. Tencel, a fibre that blends easily and improves the utility and feel of the fabric, is targeting denims to provide value-addition and improve exports.
Tencel Ltd, part of the UK-based Euro 1.9 billion Acordis Group, and which has developed Tencel and viscose, has already tied up with 12 Indian partners to blend the fibre into its products.
According to Mr Prem Sadhwani, Country Manager, Tencel Ltd, its use in denim best showcases the fibre's versatility and provides value-addition for better pricing. This may yield large benefits as India's denim capacities have almost doubled in the past couple of years, most of which is exported.
Said Mr Sadhwani, ``Customers see value-additions and are willing to pay for the extra inputs.'' The company also ventured into the knitted fabrics and T-shirt segments in 2000. It is eyeing companies and mills in the Tirupur area, which is famous for producing low-value garment exports and whose exporters are keen to enter the high-value segment. Despite the fragmentation in the market, Mr Sadhwani said players in Tirupur were professional and efficient in their operations.
While Tencel supplies the fibre, it supports partner firms with technical assistance and supply chain operations, especially to take advantage of the removal of quotas in 2005. Globally, the company is looking to develop a strong supply chain network in Asia. The textile business in Europe is on the ebb, mostly because of declining competitiveness in pricing, and the focus is shifting to Asia China, Hong Kong, Bangladesh and Sri Lanka.
Tencel is a relatively new fibre and its presence here is tiny, importing as it does the fibre from the UK. Tencel produces 60-65,000 tonnes of fibre, but India's consumption will only be about 1,000 tonnes in 2004-05.
According to Mr Sadhwani, helping companies in product development and new market initiatives are key to increasing the fibre's popularity. Also, to push its recall value with consumers it is using the tag that goes with Tencel fabrics worldwide. In India it is already being used in products of Allen Solly, Dockers and Pantaloon.
The fibre's other advantage is that its production is environment friendly. According to Mr Sadhwani, it is produced from wood pulp that is harvested from sustained forests. Very little pesticides are required and the trees yield about seven times more cellulose per hectare than cotton. Further, 99.9 per cent of the solvent amine oxide is extracted and reused in future production.
Though the cost of this process is rather high, it is expected to fall if the fibre becomes popular in India. Besides, because of its soft feel, the fabric was initially targeted at premium brands. Now even medium-priced brands are selling Tencel-blends aggressively.
The company expects to see profits in 2004-05. 2003 has been a good year, with high demand registered in Europe, the US and Asia.
The US is Tencel's biggest market, accounting for 50-60 per cent of its market share, with retail outlets proving the major players, with Europe and UK following. Customers include the likes of Liz Clairborne, Marks & Spencer, Zara and Mango.
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