Mumbai Capital

Heard of Nandan Denim? Here’s why you should

With a planned expansion to 110 million metres a year by June, the Gujarat-based firm is set to become Asia’s largest denim manufacturer

Nandan Denim Ltd, India’s second largest and the world’s fifth largest denim fabric company is set to become Asia’s biggest denim fabric maker by June this year when the company completes its Rs 621-crore capacity expansion programme.

At present, Nandan’s capacity is 99 million meter per annum (MMPA), putting it at the second spot behind Arvind Ltd, whose capacity is 108 MMPA. In four months, the Gujarat-based Nandan claims, its capacity will rise to 110 MMPA, making it India’s and indeed Asia’s largest denim maker.

“We are at an advanced stage of completing our expansion,” Deepak Chiripal, CEO, Nandan Denim, told The Hindu in an interview. “The denim industry in India is growing at 15 to 18 per cent a year.” Mr Chiripal added that several international players have begun to source denim from India “due to raw material and other input advantages” apart from stable economic and political environment.

“India needs to double its denim manufacturing capacity in next three to four years due to exploding global demand,” he added.

Arvind and Nandan Denim are both based in Ahmedabad, Gujarat. While Nandan Denim was set up in 2004 and is a part of the Chiripal Group established in 1972, Arvind Ltd was founded in 1931 as part of the Lalbhai Group, whose first manufacturing unit, Saraspur Manufacturing Company, was set up in 1897 to produce cotton yarn.

Interestingly, it was Arvind’s success in the denim business that prompted the Chiripals to enter the segment. Nandan’s original capacity was only 6 MMPA, and it has gradually scaled up in the wake of growing Indian and global demand. Nandan officials said the company exports denim to 28 countries and has 3,000 employees at its facility in Gujarat.

Govind Sharda, President, Nandan Denim told The Hindu , “We always wanted to make denim for different segments of buyers, and never wanted to confine to any specific segment like our competitors. We also focused on catering to the requirement of both local and global brands at different price points. This created demand for our fabric and helped us add capacity.”

In India, the current per capita consumption of denim is at 0.3 pairs per person as compared to 2 pairs in China and 8/9 pairs in UK/US. “This leaves scope for expansion by all players in this segment,” officials said.

The installed denim capacity in India is 1.2 billion metres per annum (BMPA). Production capacity is approximately 1 BMPA, taking into account 85-90 per cent capacity utilisation. “Of this, we had a capacity of 99 MMPA on September 30, 2015 giving us almost 10 per cent of the market share of the Indian denim industry,” Mr Sharda said.

Industry estimates put the current domestic consumption of denim at between 700-800 MMPA, while 200-300 million metres are exported. Assuming the domestic market grows at a compounded annual growth rate of 15-18 per cent (the current growth rate), that demand would reach 2 billion metres by 2020.

At the close of BSE on Tuesday, Nandan Denim was trading at Rs 130.40 a share, down Rs 3 from the previous close.

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Printable version | Jul 15, 2020 4:44:34 AM | https://www.thehindu.com/news/cities/mumbai/business/heard-of-nandan-denim-heres-why-you-should/article8216865.ece

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