TEX-FILE
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 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
( 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
22 Apparel Online India | JULY 16-31 , 2018 | www . apparelresources . com