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