INDUSTRY WIRE
Positive news has again come from the industry as South India-based SCM Garments has announced to set up a factory of 500 machines in Ethiopia, while North India-based Active Clothing generated Rs. 26.55 crore through IPO and is targeting to touch a turnover of Rs. 500 crore in next five years.
Active Clothing Co.: IPO subscribed 100 per cent; targeting multi-fold growth
Yet another private limited company in the apparel industry has recently gone in for an initial public offer( IPO). Mohali( Punjab)-based Active Clothing Co. has been listed on the SME Platform of BSE. The IPO was subscribed hundred per cent and generated Rs. 26.55 crore. The organization, which started in 1997, has its own manufacturing units at Badali Ala Singh( Dist. Fatehgarh Sahib), Punjab and has a workforce of about 1,000 employees. Objective for going to the public for funds was mainly to meet the incremental working capital requirements and to general corporate purposes.
Rajesh Mehra, Founder of the company, holds a diploma in technology( weaving) and is having
Rajesh Mehra, Founder, Active Clothing Co.
The company has strong relations with Levis which started in 2003 as an authorised distributor for sale of apparels in North India. an experience of 30 years in apparel industry. He worked earlier as Director of Gini and Jony. Talking to Apparel Online he stated,“ We have an ambitious target of becoming a Rs. 500 crore company in next five years. We will go for backward integration, mainly for dyeing facility, which will increase our market reach also.” As per the company’ s website in the year 2016-17, it generated total revenue of Rs. 120 crore. It is into sweaters, outwear jackets, T-shirts, sweatshirts, joggers for men, women, kids and babywear. The company has an annual total capacity of 12,58,810 pieces of sweaters, 2,42,190 pieces of jackets and 7,80,000 tees and sweatshirts. It works mainly for Levi Strauss( India), US Polo, Arrow, Izod, UCB, Numero Uno, Basics, Elle, Iconic, Pepe Jeans, Impulse( buying house) and other reputed international brands. The company is also a distributor for international brands such as Levis, Celios, Arvind owned licensee brands Ed Hardy, Flying Machine.‘ Aagain’ is its own fashion brand of sweaters and jackets. Already using advance machines of Stoll, Shima Seiki and Juki, the company is continuously improving its manufacturing.“ We try to reduce the wastages and keep control on the production floor through effective supervision. Our focus has been to reduce the operational costs to gain competitive edge. Besides, use of modern machinery has increased the efficiency and speed of production which will further reduce our cost of production,” says Mehra.
SCM Garments invests in Ethiopia
In the current unenthusiastic scenario that prevails in the country, some of the garment exporters who are expanding have chosen to move out of the country, and an emerging destination like Ethiopia is their first priority. From South India, Jay Jay Textiles and Best Corporation already have units in Ethiopia. The latest to move to Ethiopia, from the region is Tirupur-based SCM Garments( part of SCM Group of companies). The company has started a small unit with 50 machines in the country and the planning is to operationalize nearly 500 machines which are expected to start production by mid-2019.
M. Ashok, CMO, SCM Garments shared with Apparel Online,“ Initially we will manufacture shorts and leggings in Ethiopia as there is a limitation to do basic products only. As of now, production will be for European customers but later this unit will also cater to US clients.” In terms of its customer base, the company has a ratio of 65:35 between Europe and US.
Supporting Indian Trade And Investment for Africa( SITA), a project of the International Trade Centre, says that about 30 apparel units from India, China, Bangladesh, Indonesia have set up
M. Ashok, CMO, SCM Garments
shops in Ethiopia in last few years. Ethiopia has duty-free access to the US and Europe and enough manpower availability; additionally low-wage rates are attracting the apparel manufacturers to invest there.
Founded by A. Kulandaivel Mudaliar, SCM Group is moving forward under the leadership of its MD, P. P. K. Paramasivam. The vertical integrated setup of SCM Group is GOTS- and WRAP-certified. Working with top companies like Decathlon, Kiabi, the SCM Garments is mainly into kidswear and it ships monthly about 9.5 million pieces to global customers.
40 Apparel Online India | APRIL 1-15, 2018 | www. apparelresources. com