Mumbai: Textiles maker Arvind Ltd said on Monday it plans to tap the low-cost Bangladesh market by setting up a denim manufacturing plant in Bangladesh and investing $60 million over three years.
The planned expansion will take Arvind’s denim manufacturing capacity to 140 million meters, it said.
Arvind will be setting up 30 million meters of denim capacity and is entering into a joint venture with Bangladesh’s Nitol Group, which will have 20% stake in the JV, it said in a statement.
Arvind will set up 10 million metres of capacity in the plant over the next 12 months with an outlay of about $25 million.
Garments exported from Bangladesh do not attract any import duty if the fabric is manufactured locally. The wage cost in Bangladesh is also amongst the lowest in the world, Arvind said.
“Since we are already exporting 36 million meters of denim to Bangladesh annually we have a ready market available and hence the proposed plant shall be profitable from day one,” Arvind’s chief financial officer Jayesh Shah said in the statement.
Demand for denim fabrics in Bangladesh is growing more than 25% and is currently at 280 million metres, the statement added.
At 9:37am, shares in Arvind were up 1.39% at Rs43.65 in a firm Mumbai market.