Aaron Denim Ltd. (ADL), formerly MAB Spinning Ltd. and MAB Denim Ltd. is a 100 per cent export oriented denim fabrics manufacturing unit. From a previous capacity of 1.25 mn, currently, ADL holds a capacity of 2 mn yards fabrics per month which is set to increase to 2.5 mn yards very soon. With dyeing capacity of more than 30 mn yards there is still capacity of further expansion. Aaron has also set-up vertical integration in the form of garments to move even closer to buyers. To know about the company and its further plans Apparel Views Bangladesh spoke to young entrepreneur Sayed Ibn Mazakat, Deputy Managing Director and CEO of Aaron Denim Limited. Given are some excerpts from his interview….
Please tell us about your recent expansions?
Aaron Denim has been growing exponentially over the past few years. With the introduction of new machineries and highly skilled marketing force, we have become a leading manufacture in the denim market. Our company recently doubled its capacity from 1.2 mn to 2.5 mn yards per month. We manufacture all kinds of denims, and have complete finishing range. We already have huge capacity in dyeing so have increased capacity in weaving, and now having 180 looms at present. Our company has been constantly bringing new innovations to the world of denim. We have also set up vertical integration in the form of garments to move even closer to buyers. With the increased capacity and new equipment we are now one of the leading company in Bangladesh.
What is the trend nowadays?
The trend now is cotton spandex; for men’s it’s around 10- 12 ounce and for ladies it is under 10 ounce. We also have dobby fabric, which is called knitted denim. We are also doing new value addition called overdyeing, which has 3 times more depth in colour. It requires three times more chemical and time, but it’s getting very popular now. There are lots of opportunities to explore as the overall world market is still growing.
As a denim fabric manufacturer which is your focus markets?
We do 100 percent exports and don’t have local consumption. Our main customer is Inditex ZARA to which we sell around 50-60 percent of our production. Apart from this, Europe basically Spain is our main market.
What is the current denim market scenario in Bangladesh?
There is overcapacity in denim industry. When people expand, it is basically to neutralise their overheads. Salary is increasing by 10 percent every year so if you are producing same volume and cost increases your profitability decreases. But they forget that they have to sell what they are expanding and when they are unable to do so it creates over capacity which is not good for the industry.
So, why did you expand your capacity?
Because we were under capacity as per export orders. Our dyeing is around 2.5 mn yards but our weaving is underutilised so we had to expand. We are upgrading again in February so we may go around 2.5 mn yards. We are not among top 10 manufacturers in Bangladesh in terms of capacity but quality and innovation wise we are among leaders. We are looking at value added products, as in today’s scenario if you want to survive you have to innovate in terms of value additions.
What as a company you have done for sustainability?
At Aaron, we strive to build sustainability into everything we do. We are investing in ETPs. We are getting our regular audits done from Inditex, so our process is regulated every now and then. Today it is important to innovate if you want to sell, which is not easy in denims. We use world’s leading sustainable yarn brands such as: Dual Core, Tri Blended, Rayon, Linen, Siro, Siro Slub, Thermolite, DCY/SCY/AC, Multicount, Multi slub, Colored Weft & All Blended Yarn to produce best denim portfolio. Besides, our company strives to use the eco-friendly dyes and chemicals in their manufacturing process. Moreover, We are certified by Global Organic Textile Standard, Organic Blended Content Standard, Oeko Tex, Better Cotton Initiative and more.
Are the chemical companies also helping in bringing down the water consumption in denim manufacturing?
Chemical companies have worked a lot on it. They are also helping companies to bring down their water consumption. Customers are asking us to use environment friendly chemicals which we are getting. We have to make our buyers happy by supplying products as desired. But the issue is with spinners, who are changing prices every minute.
Are you facing any competition from denim mills in China, India and Pakistan?
Not much from India and Pakistan but ofcourse from China. We are competing, and industry survived in Bangladesh because of our RMG sector. Bangladesh industry is growing, and compared to last year we may achieve our targets in 2019. Our biggest positive is the cheap labour. Buyers usually prefer us over other countries as we are offering lower prices. Compared to India and China our labour cost is very less. But still China can give a lower price because of Govt. subsidies.
So Bangladesh Govt. should also support us to regularize the price so that we can compete in world market. Govt. should help us in setting up common ETPs. The bank interest rate is high so interest on funding should be lowered and labour laws should be more favourable for manufactures. Apart from this infrastructures support is also needed in roads and port. They should have a body where our product price could be regulated as we are losing money in unfair price war.
Besides, to sell our volumes we have to make something which is saleable both cost wise and quality wise. We are not competing with other companies; we have our own shortcomings, which we are trying to overcome. If we do that in next two years then have a long way to go.
What do you expect from govt. for the betterment of this industry?
Govt. has lots of rules and regulations but those are easily bi-passed. Big companies are getting away and smaller are suffering. Like in spinning market, when there is huge demand they increase the price. Even though they are buying their raw material at same rate so why is there no regulation? We have to make deliveries in one and two months and most of the time we are overbooked. So, in such case we have to do job work outside to support the buyers. But spinners were changing prices every day due to which we suffered a lot of loss.
How is the overall buying side of Europe? Is it really going upwards?
Inditex is going up, but I see a lot of big European retailers falling. Nowadays many customers are going for online shopping by comparing everything, so retail market sale is getting affected. Running a retail industry requires huge cost, so if you don’t have sales, you are going to fall. I have seen many of them going online.
What is your vision as a company?
We aim to be the best in our chosen area of expertise with the guiding vision of Aaron’s Textile engineering and pioneering strategies, being ready to adapt advancing trends and processing techniques. Our commitment is deep-rooted to our brand building enterprise and towards fashion trends at home, in the region and worldwide. Our vision is to synergize skills and expertise in producing denim fabrics of the finest quality based on ethical business and safe working practices, and to retain a large client base serviced with our highest level of customer satisfaction.