Sunil Daryanani & Dinesh Virwani
Joint CEOs Epic Group
We have started building our factories of the future
Since its inception, Hong Kong-headquartered Epic Group has been a key player in the apparel industry – first as a major textiles trading house, then as a leader in sourcing quality fabrics, and since 2005 as a state-of-the-art manufacturing company with facilities in Bangladesh, Jordan, Vietnam and Ethiopia. Joint CEOs Sunil Daryanani and Dinesh Virwani speak to Fibre2Fashion about global apparel manufacturing and next plans at the company.
What kind of impact does the geopolitical crisis have on the global apparel supply chain? What kind of repercussions do you foresee?
The rise in inflation has cascading effect on the entire supply chain as raw material, freight and energy cost have increased, resulting in higher retail prices. At the same time, the same inflation is making consumers to prioritise their spending and decrease their share of wallet for apparels. We are also seeing higher inventories as supply chain got disrupted due to lockdown delays. Some brands have started going aggressive on the markdowns to clear the inventories as soon as possible. This might even out, and still motivate the consumers to buy. Also, the retail market seems consolidating, resulting in unemployment. Few of the key things we see coming out of this is that brands are focusing on nearshoring to make the supply chain more resilient. They are also investing on the right technology to have clear visibility on supply chain and be more agile and flexible in demand planning to avoid inventory issues in future.
What are the biggest challenges that the global apparel manufacturing sector faces?
As mentioned earlier, the rising cost of raw material, energy and freight is the biggest challenge that global apparel manufacturing is facing. Also, the wages of associates keep on increasing as the cost of living goes up. Hence, again, how to keep the retail price at a point where consumer is willing to buy is a key challenge.
Has the growing focus on slow fashion and sustainability affected the order quantities of brands/retailers?
Order quantity hasn’t been affected; in fact, it is growing. However, more and more clothes are being produced with sustainable fibres, and new sustainable practices are being incorporated in the whole manufacturing and supply chain value chain.
What kinds of materials and styles do brands and retailers prefer in recent times?
They want a blend of active and casual wear. It is because people want to feel comfortable even at the office. So, it is a combination of light weight and active wear fabrics.
What is the annual production capacity at your units?
Currently, we are making nearly 120 million pieces per annum. We are, of course, gradually expanding through new product categories and new geographies.
What new technologies and innovations are you investing in?
We are transitioning towards Industry 4.0 and have started building our factories of the future. They are lean and supplemented by sustainable practices. The very first such unit, Green Textile Unit-4, got recently commissioned and is fully operational. These micro-factories will be agile production facilities with modular lines, multi-skilled operators, and advanced technology in terms of equipment and digitalisation. They are built with vigour and passion to ‘cut in the morning, ship in the evening’.
We are also, investing in new washing machine for denim that doesn’t require use of any chemicals and very less water consumption, making it highly sustainable.
From a product point of view, we have partnered with new and innovative denim fabrics, that is sustainable both from material as well as process point of view.
What percentage of garments made at Epic are sustainable?
Last year we made nearly 10 million garments using sustainable fibres. We keep on closely working with the brands and mills to make more and more garments using sustainable fibres.
Which major brands and geographies do you export to?
We are key suppliers for some of the major brands such as Walmart, Uniqlo, Amazon, Levi’s, Tesco, and Sainsbury. We supply across the globe to the US, Europe, UK and Asia.
What are the next plans with respect to capacity expansion, sustainability and technology upgradation?
EXPANSION PLANS
We are expanding our manufacturing footprints in the existing as well as new geographies to ensure that we provide a wider range of product offerings, speed to market, competitive pricing with duty benefits, as well as supply chain resilience. Our expansion plans include creating factories of the future in Bangladesh, getting vertically integrated through equity purchase in Envoy Textiles, setting up a new manufacturing facility in Jordan for synthetics, setting up facilities in India, as well as supporting the near-shoring/on-shoring visions of our customers.
To complement our manufacturing expansion, we have Rainbow Place, an agile and nimble supply chain partner offering product diversification, flexibility, and speed to market using different geographies. It has exclusive agreements with world-class manufacturing facilities in Egypt, Pakistan, Indonesia, Kenya, Vietnam and Jordan.
SUSTAINABLE MANUFACTURING
We have a sustainability aspiration target of achieving Higg leadership by 2023. We also target to reduce our carbon footprint intensity by 20 per cent by 2023 against 2017 baseline.
We have been investing on carbon reduction as part of our strategy. Our factories of the future are designed with complete solar rooftops – the first of which is being commissioned with 730 kW and the second at 1,400 kW will be commissioned in Q1 2023. We are upgrading our machineries and steam systems for energy efficiency using state-of-the-art design and optimisation. Innovations in our washing – with respect to advanced chemistry, machine improvements and recipe optimisation – enable us to reduce our carbon footprints.
Our water intensity reduction target of 40 per cent is achieved through the washing improvements targeting low water finishing processes aided by washing machine upgrades, laser, and ozone machines. Our ETP upgrade at CIPL with advanced membrane technology helps us to reuse up to 50 per cent water back into process. The EGMCL1 ETP upgrade is already in motion and is scheduled to be completed in Q2 2023.
SUSTAINABLE PRODUCTS
We are increasing our use of sustainable fibre – organic cotton, recycled cotton, recycled polyester and sustainably produced cellulosics. In 2021 we produced nearly 6,000,000 garments using sustainable cotton. Our base cotton use comes from BCI certified cotton or equivalent.
Building on our work on low-water-denim in 2021, we are working on the next generation of low impact denim products in a scalable manner using advanced fabrics that eliminates potassium permanganate spray in finishing as well as reducing water, carbon, and chemical footprints.
SUSTAINABLE FINANCING
HSBC has been our long-term partner and it has supported our growth since our inception. Epic Group is proud to be the bank’s partner in completing its first sustainability-linked trade transaction in Hong Kong. The proceeds will support our working capital and trade cycle, with pricing tied to our performance in greenhouse gas emissions intensity, freshwater use intensity, as well as Higg Facility Environmental Module. This facility will propel us even further to enhance our relentless mission of achieving sustainable leadership and making the world a better place.
Epic Group has been awarded the ‘Best Trade Finance Solution’ under ‘ESG Solutions’ in the Asset Triple A Awards – 2022.
What has been your growth story for the last fiscal year? What are the targets set for the next year?
We witnessed a tremendous growth of 40 per cent last year due to high demand. We plan to grow between 10 per cent to 15 per cent year-on-year over next 3 to 5 years.
Published on: 08/07/2022
DISCLAIMER: All views and opinions expressed in this column are solely of the interviewee, and they do not reflect in any way the opinion of Fibre2Fashion.com.
