Denim production is
one of the most labour- and material-intensive processes of the textile and
apparel industry. Denim producers have to also work in a sustainable and
environmentally conscious way to remain competitive as well as provide good
conditions for their workers.
FashionUnited talked with Thomas Dislich, director for Europe and Asia
since 1999 at Vicunha, the Brazilian denim specialist headquartered in São
Paolo, about changes, challenges and trends that the industry is currently
facing. With a production volume of 200 million meters of denim cloth (in
2013), the denim giant has propelled itself to the very top. In 2014,
Vicunha’s turnover reached 443 million euro (around half a billion US
dollars) and a net profit of 38.5 million euro (around 43.5 million US
dollars).
Thomas Dislich: Bangladesh certainly is a very complicated country.
Agitations happen time and again and doing business is not always easy.
However, for the textile- and garment industry, Bangladesh is a force to
reckon with that is impossible to dodge. Despite conditions and atmosphere
having changed, it could be better; progress is happening slowly.
We are a sole fabric producer and this fabric is sold to people who make
pants. Looking at the jeans market in Europe, one quickly realises that
business takes place in Asia. In 2014, 550 million pairs of pants (only
jeans) were imported, of which China, Bangladesh and Pakistan alone bought
two thirds. The bulk of pants is stitched in Asia and Vicunha adapts to the
market accordingly; we have to be where people need the material.
We produce our denim fabric solely in Brazil or better Latin America:
Compared to Bangladesh, Brazil is much, much, much more expensive – about
as much as Turkey.
Which does not meant that we do not have partner factories in countries
like India, China and Turkey when additional volume is needed. This was
the case between 2004 and 2014 but at the moment, we do not need extra
capacities. But when we use them, we are consistent in regards to
standards.
Personal visits, screenings and more visits to ensure that everything is
according to our specifications.
Vicunha uses only BCI cotton, 100 percent, that is sourced in Brazil
where 40-45 percent of the entire amount of BCI cotton is produced. There
are very big and very modern farms, about 40 in total. That is a very
different scenario compared to India or Pakistan for example where there
are 20,000 farms but each one produces much less.
Vicunha needs 100 million kilos of cotton a year, that is more than
100,000 tons or 6 percent of the entire Brazilian cotton output or 4
percent of the entire BCI output worldwide.
Our company culture is very strict and we are 100 percent vertical:
spinning and weaving happens entirely in-house and we check the cotton that
we use very carefully. Apart from technical aspects, we check very
thoroughly under what human conditions it is grown. There a numerous social
clauses and Brazilian laws are very strict.
Vicunha operates five wholly-owned factories – three in Brazil and one
each in Ecuador and Argentina. That enables us to monitor and define
working conditions very closely. Worldwide, there are about 8,000 employees
and on average, they earn about 1,000 US dollars per month, which is far
above industry average. We invest in our workers – after all, it is in our
interest that they stay longer.
Working conditions are approximately the way they are in the US and
labour laws are in place and unions strong. In fact, Brazil is often
mentioned as an example. Large quantities and the latest technology
guarantee competitiveness.
The market is becoming ever more concentrated and has been divided among
a few big players. In Europe, about 600-700 million denim pants are sold; a
large part of it only via a dozen channels. And big players have strong
compliance guidelines. In addition, companies like H&M and Zara are
vertical businesses.
The fast fashion market is incredibly dynamic and huge distances are a
given – despite logistical difficulties, one has to be extremely flexible.
Regardless of location, the same reaction rate is expected. And that means
flexibility and delivering smaller orders more often rather than bigger
orders only a few times.
Although quantities have increased a lot for the denim sector: jeans are
more prominent but are becoming ever cheaper, part of the
‘macdonaldisation’ of the world – there is a lot of everything. It is like
that in Brazil, in China – everything has become big. And it is part of the
business model to push for consumption; that is part of the growth model.
Accordingly, there is a lot of production and one has to be very big and
work keenly to be able to stand one’s ground.
Our customers demand sustainable production processes and there are
guidelines for chemicals. In addition, Brazil is leading the world when it
comes to reduced water consumption. Techniques that save water are in
demand as well as eco fabrics.
Denim is like a broad river where one sometimes does not see the other
side: jeans is not just one thing any more, it is many things. There are
two currents at the moment: everything that has to do with technology,
stretch levels for examples that one could only dream of three to four
years ago. Then there are knitted weaves, knitting with denim for yoga
jeans, perfect fit and athletic jeans. This trend is continuing. Then there
is another, opposite direction that one could call “back to the roots”.
Maybe women will stop earlier than men to wear stretch: they are already
wearing ‘boyfriend jeans’. Basically, there is a trend back to age-old
basic jeans. And the jeans world is divided into performance and
activewear, with denim thrown in the mix.
Images: Vicunha