Textile Exporters Start Using Cheaper Materials

As overseas buyers of textiles continue to insist on lower prices, large export firms have started using cheaper materials for international markets so that they can stay profitable.

Bangalore-based Gokaldas Images, for instance, which counts Armani Exchange, Calvin Klein Inc., VF Corp. and Oxford Industries Inc. as clients, has replaced acetate or viscose fabric with cheaper polyester to line the inner side of a garment. That way, it maintains quality and texture of its garments while saving 15-20% on lining material, substantial when done in large volumes.

And with demand for premium wool suits drying up in foreign markets, Gokaldas is producing more polyester viscose suits at nearly half the price of woollen suits.

The demand trend from European and US markets have changed from premium to value and they now want cheap stuff that also look good. So, manufacturers have to find various ways of meeting this demand.

This using of cheaper material, lower thread counts, or a more cost-effective design, has allowed several textile exporters to fill up their order books ahead of the key holiday season in the West.

But it’s still a challenge to make a shirt that cost $69 earlier for $39 and make it look and feel the same.

To reduce input costs, Orient Craft is switching to fabrics that costs Rs80 ($1.71USD) a metre, down by Rs20 ($0.43), and opting for cheaper machine embroidery of Rs35 ($0.75) a metre from Rs50 ($1.07) earlier.

Inbuilt input efficiencies is critical now and they are trying new things like metallic-finish fabric or African prints for clients who want value-added products.

Exporters are also removing non-profit clients that demand high-value products in small volumes.

Mumbai-based Morarjee Textiles Ltd says the way ahead is through value engineering of products, price reduction and product innovation. Many Indian exporters are now trying to include value-added features at a lower cost to push sales.

Morarjee, one of the largest suppliers of material for the Arab headgear guthra—a headscarf worn over a skull cap—has modified the design to make it cheaper. 

The company, which also supplies to retailers such as Robert Talbott and Hugo Boss AG,   removed a design accessory in the guthra and it has reduced the price by 10-15%.

Midas Touch Export Ltd, has introduced a woven component as value-addition to t-shirts, which are typically made in jersey or knitted fabric.

Earlier, Alok would supply more expensive, finer bed linen with a thread count of 500 per square inch, which has now shrunk to 200-300 making the linen cheaper by 25%.

“Margins are not hit because input costs have also reduced. We can use cheaper quality of yarn to cut cost,” said Alok’s chief financial officer Sunil Khandelwal.

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