Apparel Sourcing Intelligence - Worldwide

Now Chinese yarn firm reviews Brandix’s Indian location for mill investment

Hong Kong’s Bros was reported on December 26 to be “evaluating the opportunities offered by  Brandix India Apparel City (BIAC) ”

Brandix has struggled to attract investors into its ambitious project in Visakapathnam,  on anything like the scale it forecast in 2007, though the problem has been widespread among businesses attempting special economic zones in India 

BIAC has capacity for 30-32 units, but only 13 units are operating, of which three units belong to Brandix Apparel India . The other operational units  include UK-based Quantum Clothing, Hong Kong-based  Pioneer Elastics and Vardhman Yarns & Threads Ltd. Brandix was rumoured in early 2013 to be contemplating pulling out, as local authorities were rumoured to be conmtemplating action against it for allegedly failing to deliver the economic growth that had justified a extremely low price for the land it acquired.lready imports Indian cotton and is keen to have its base in India to process the raw materials here,

Though Hong Kong based, Bros operates ginning plants in Xinjiang, spinning mills in a number of Eastern China locations and dyeworks in Zhejiang. Government official in Andhra Pradesh state have claimed that Bros “already imports Indian cotton and is keen to have its base in India to process the raw materials here”, though it ” is also examining the policies of the [Indian] government relating to cotton import and exports”. It is unclear whether this is code for “wants subsidising” or just reflects worries about India’serrratic recent policies on imposing export bans and slapping import duty on yarns.

Bros’ interest arises as a growing number of Chinese spinners and weavers have started announcing plans to set up foreign operations. We believe this is not primarily about growing Chinese wage costs, but stems from a combination of:

  • Toughening Chinese pollution laws
  • The confusion China has got itself into over cotton subsidies, and their effect on Chinese cotton prices
  • Concerns that Rules of Origin will freeze garments made from Chinese yarn and fabric out of eligibility for duty-free access to markets throughout the West and in Latin America.

Bros investment likely to be Rs 5 bn ($81 mn):