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In­dian denim mills strate­gi­cally ready to en­ter Viet­nam Lan­guage, lo­gis­tics, and duty for do­mes­tic con­sump­tion, are es­tab­lished chal­lenges for In­dian mills when they ex­plore Viet­nam, and it is no dif­fer­ent...

Lan­guage, lo­gis­tics, and duty for do­mes­tic con­sump­tion, are es­tab­lished chal­lenges for In­dian mills when they ex­plore Viet­nam, and it is no dif­fer­ent for denim mills, but now af­ter their con­sis­tent ef­forts in re­cent years, some of them are ready to take-off in a big way. At least 10 In­dian mills have ex­plored Viet­nam and few of them have not only suc­ceeded, but have also con­tin­u­ously reg­is­tered growth, find­ing their way to get space in this coun­try. And it seems nat­u­ral as Viet­nam’s denim ex­port to the US has grown nearly 35 per cent in 3 years. The re­cently signed CPTPP and ex­pected FTA with EU, fur­ther add a bright prospect to the growth of ex­ports from this coun­try. Mov­ing on, the in­creas­ing com­pli­ca­tions of sourc­ing from China, par­tic­u­lar af­ter the on­go­ing trade war with the US, goes in In­dia’s favour. Team Ap­parel Online which was re­cently at the den­im­sand­jeans event in Viet­nam ex­plored how In­dian denim mills are in­creas­ing their ex­ports in this beau­ti­ful coun­try.

Viet­nam, the world’s third largest ap­parel ex­port­ing coun­try, tar­get­ing to achieve US $ 50 bil­lion by 2020 and cur­rently at US $ 31 bil­lion, is a grow­ing op­por­tu­nity for In­dian denim mills, yet many is­sues still pose a chal­lenge. One of the big­gest chal­lenges is lo­gis­tics and de­spite the best ef­forts by In­dian mills, it takes min­i­mum 25 days, from dis­patch to de­liv­ery of goods des­tined for Viet­nam. To counter this time slack, many mills are keep­ing or look­ing to keep stock in Viet­nam or are main­tain­ing a ware­house. These mills are also look­ing for nom­i­na­tion busi­ness, which is an­other prospec­tive so­lu­tion to the lo­gis­tics chal­lenge. It also be­comes im­por­tant, as nearly 65 per cent ex­porters of Viet­nam use fab­ric of nom­i­nated sup­pli­ers. Along with nom­i­na­tion, some In­dian mills are ini­tially tar­get­ing Viet­namese do­mes­tic brands which nor­mally place or­ders for 2-3 sea­sons per year.

KG Denim, Coim­bat­ore, mov­ing to­wards hav­ing deep roots in Viet­nam, has been suc­cess­ful in con­nect­ing with some do­mes­tic brands and get­ting rea­son­able vol­ume or­ders from them. Mo­han­raj, AGM – Ex­ports of the com­pany shares, “Re­gard­ing fab­ric sup­ply to the Viet­namese ex­porters, only nom­i­nated pro­grammes by the brand can do well oth­er­wise en­quiry­based or­ders don’t have much scope. We are try­ing to get the nom­i­na­tion to tap ex­porters, es­pe­cially for US mar­ket. It will take time but will def­i­nitely take place. Some more in­ter­na­tional brands are en­ter­ing Viet­nam, so nom­i­na­tion seems im­por­tant. Though com­pared to ex­porters, do­mes­tic brands (cater­ing mainly to ladies and kids) have small order sizes and com­pa­nies work­ing with lo­cal brands/la­bels have to pay duty (nearly 18 per cent), yet we are sat­is­fied to work with them as they are grow­ing. Sim­i­larly, their order size is also in­creas­ing. It is com­par­a­tively easy to work with lo­cal brands as they have enough lead time to ab­sorb the ship­ping time, when com­pared to ex­porters.” Re­cy­cled polyester­based denim and re­cy­cled Ten­cel are two of the in­ter­est­ing of­fer­ings by the com­pany.

An­other com­pany from Coim­bat­ore, KG Fabriks Lim­ited has been putting ef­forts into this mar­ket from the last 4 years and has re­cently suc­ceeded in get­ting some vol­ume busi­ness and new cus­tomers and that too from Hanoi. (Gar­ment industry in Viet­nam is ma­jorly sit­u­ated in HCM City and Hanoi). As of now, the com­pany is work­ing with selected 8 to 10 clients. KR Thama­rai Sel­van, As­sis­tant Man­ager Mar­ket­ing of the com­pany is of the opin­ion, “Good thing about Viet­nam is the op­por­tu­nity to get good vol­ume/con­tainer or­ders. Only lo­cal brands ask for small quan­ti­ties

but even in that case, price is good.

All Viet­namese are very well-versed with Chi­nese mills but not with In­dian Mills so we have the lim­i­ta­tion of get­ting new con­tacts by par­tic­i­pat­ing at sourc­ing event, only.” Ex­pect­ing 30 to 40 per cent growth in or­ders from Viet­nam, the com­pany is as of now man­ag­ing its lo­gis­tics well, as most of the de­mand it gets is for reg­u­lar prod­ucts and there is a con­certed ef­fort to push for early con­fir­ma­tion of order. KG Fabriks claims to use only 3 litres of water to pro­duce one me­tre of denim fab­ric. Use of sul­phur colour rather than re­ac­tive is an­other at­trac­tion of the com­pany’s prod­ucts. Max­i­mum stretch through ad­vanced technology, but with min­i­mum span­dex, is the com­pany’s other in­ter­est­ing of­fer­ing.

Sim­i­larly, an­other In­dian mill Anubha In­dus­tries, Su­rat (Prat­i­bha Group) which is push­ing its of­fer­ings into this mar­ket from last three years, is now geared up for good busi­ness. The com­pany is in the process to start its of­fice in Viet­nam and is look­ing to hire lo­cal pro­fes­sion­als. Amit De­sai, Sr. Man­ager – Ex­port Mar­ket­ing of the or­gan­i­sa­tion shares, “We are con­tin­u­ously meet­ing with new buy­ing houses, brands and jeans man­u­fac­tur­ers here and ex­chang­ing ideas in prod­uct re­quire­ment and our of­fer­ing. With our lo­cal of­fice and Viet­namese pro­fes­sion­als, we will def­i­nitely get a much better re­sponse as there is a lot of po­ten­tial here and they are now se­ri­ously look­ing for In­dian fab­ric.” Amit feels that duty struc­ture of Viet­nam is an is­sue in im­port­ing In­dian fab­ric. The com­pany is dis­cussing this is­sue with as­so­ci­a­tions. Known for sus­tain­able denim and piece-dyed fab­ric, the com­pany is GOTS, Oeko-Tex and OCS cer­ti­fied, pro­duc­ing 20 lakh me­tre of fab­ric per month. It is pro­mot­ing wider width denim as it helps the jeans man­u­fac­tur­ers to re­duce their cost. Like the above-men­tioned mills, Aarvee Den­ims & Ex­ports, Ahmed­abad too has been ex­plor­ing this mar­ket with com­par­a­tively lim­ited focus, but is now geared up with full prepa­ra­tions and get­ting pos­i­tive in­di­ca­tions too. Re­cently par­tic­i­pat­ing for the first time at the den­im­sand­jeans event, the com­pany ini­ti­ated its first ever big ef­fort for Viet­nam. Pankaj V. Arora, VP – Mar­ket­ing of the com­pany shared the rea­sons for larger focus on Viet­nam now. “We were work­ing with many brands of late through Bangladesh. Sig­nif­i­cantly, Bangladesh and Viet­nam are work­ing on a very sim­i­lar model in terms of gar­ment ex­port; Viet­nam is catch­ing up with Bangladesh so we felt that it is high time for our com­pany to be present ef­fec­tively in Viet­nam,” he ex­plains.

Hav­ing ex­per­tise in cot­ton span­dex with the low­est shrink­age, Aarvee Den­ims re­searched about Viet­nam and re­alised that over­all there is stiff com­pe­ti­tion from China. Ac­cord­ingly, it plans to en­counter this chal­lenge by fo­cus­ing on the com­pany’s strength which is 100 per cent cot­ton and cot­ton span­dex base. With re­gard to the com­pany’s strat­egy to sur­mount chal­lenges in this mar­ket, he says, “Com­pared to China, we have an edge in lo­gis­tics in case of Bangladesh, yet China is do­ing very good busi­ness with Bangladesh, so sim­i­larly we do the same with Viet­nam. We are build­ing our base for han­dling the Viet­nam mar­ket and I am sure that we will suc­ceed.” Pankaj fur­ther added that ini­tially, the com­pany will focus on such range of fab­rics which can be de­liv­ered much faster and can be also pro­duced within the less lead time. “We have price ad­van­tage over China so the cus­tomer will bear with us a lit­tle bit on lo­gis­tic dis­ad­van­tage, hence it seems to be a win-win sit­u­a­tion for us as well as Viet­namese gar­ment ex­porters,” adds Pankaj. As the com­pany is work­ing with some of the most-tough­est coun­tries of the world like Latin Amer­ica, lan­guage is not a big is­sue for them.

San­deep Agar­wal, Founder, den­im­sand­jeans.com who is con­nect­ing denim mills from across the globe with Viet­nam through his event, also feels that lan­guage is not a prob­lem and it is easy to find good pro­fes­sion­als in Viet­nam who can work for In­dian com­pa­nies; they just need to use them cor­rectly and that will open all the chan­nels. Ac­cord­ing to him, the lo­gis­tics is­sue he adds needs to be tack­led through col­lec­tive ap­proach or in sup­port with trade as­so­ci­a­tions. “Tra­di­tional ways of work­ing will not work here in Viet­nam, so new and col­lec­tive ef­forts will open the gate and clients will have more con­fi­dence in In­dian com­pa­nies. China is now get­ting out of the race slowly and buy­ers are look­ing for a re­place­ment, so this is the best time for In­dian com­pa­nies to ex­plore Viet­nam,” con­cludes San­deep.

(L-R): Vinsline, Man­ager – Op­er­a­tions, Tap In­ter­na­tional Com­pany; Mo­han­raj, AGM – Ex­ports, KG Denim; and Abhi (Asst. Man­ager – Mar­ket­ing), Tap In­ter­na­tional Com­pany Lim­ited

(L-R): KR Thama­rai Sel­van, As­sis­tant Man­ager Mar­ket­ing with S. Kr­ishna Raja, Sr. Mar­ket­ing Man­ager, KG Fabriks Lim­ited

(L-R): Bhavesh Pa­tel, Man­ager Mar­ket­ing, Anubha In­dus­tries; Alok Kumar Trivedi, Coun­try Man­ager, Gate­way Next Ltd.; and Amit De­sai, Sr. Man­ager – Ex­port Mar­ket­ing, Anubha In­dus­tries

San­deep Agar­wal, Founder, den­im­sand­jeans.com

Pankaj V. Arora, VP – Mar­ket­ing, Aarvee Den­ims & Ex­ports

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