India’s denim major Arvind Ltd has signed a memorandum of understanding (MoU) with the government of western Indian state Gujarat enabling the manufacturer to set up a large state-of-the-art apparel unit that should be operational before March 2019.
Kulin Lalbhai, one of the two executive directors of Arvind Ltd, told just-style: “This is an MoU we have signed with…Gujarat to set up a major apparel factory in Dahegam, near Ahmedabad, which, over time, will employ 10,000 people.”
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There is political significance to this deal, given that Gujarat is the home state of Prime Minister Narendra Modi, and elections for a new state legislature will be held next month. The Modi government has been actively pushing the idea that India’s clothing and textile sector supplies products from across the supply chain to global markets, having held a major textile exhibition in Gandhinagar, Gujarat, in July to that end.
The Gujarat Government, run by Modi’s Bharatiya Janata Party (BJP), also announced a new garments and apparel policy last month, which aims to encourage the use of cotton produced in the state through the entire value-chain of farm-to-fibre, fibre-to-fabric, fabric-to-fashion and fashion-to-foreign shores. Explaining the underlying reason for the new policy, Gujarat Chief Minister, Vijay Rupani, said he wanted to see “new investments in garment making”, adding that: “The state is the largest producer of cotton that is supplied to other [Indian] states. It is time to encourage our entrepreneurs to invest in garment making.”
Arvind’s Lalbhai added that the production at the proposed new facility will take two years to ramp up once it is opened. It will make all types of garments and not just denim lines. “Eventually we intend to produce 24m garments per annum there,” he added.
The factory cost INR3bn (US$46.42m) to set up. Asked how the company proposes to finance the project Lalbhai replied: “Arvind Limited uses internal accruals for its capital expenditures and it will be the same in this case.”
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By GlobalDataSince it will be a modern plant, it will be equipped with the best state-of-the art machinery and automation. Lalbhai added: “Our relationship with our global clients is getting strategic and close and we intend to strengthen this relationship with international [apparel] brands.”
