The evolution of technology, the disruption of supply chains during covid and pressure to address sustainability issues in the denim industry is driving a radical rethink of the industrial landscape. Mills and brands are investing in next-generation factories located closer to their customers and consumers, paving the way to a reshoring of production. 

Once upon a time, bigger was better. Vast vertically integrated denim manufacturing factories were, and still are, the pride of many companies in the global denim industry. But what they provide in terms of efficiency, cost and scale is not without drawbacks. They can entail long lead times, high volume minimum orders and generate excess inventory, which is proving to be increasingly costly both financially and reputationally. Add in rising wages around the world, hikes in transportation rates and duties, pressure to address environmental issues, belief in growing consumer demand for locally made products and the prevailing perceived advantages of producing clothing in these mega facilities could turn into a disadvantage.

Factor in the evolution of technology, the development of automated sewing machines and finishing devices, and the stage is set for Industry 4.0 and a new mindset. It is a move spearheaded by one of the world’s leading denim manufacturers no less. Saitex’s first manufacturing facility outside of Vietnam opened in March 2021 in Los Angeles, equipped with state-of-art machinery that can produce 2,000 jeans a day. “Saitex USA provides an opportunity to bring sustainable manufacturing and jobs to the United States, a first step in re-evaluating and reinventing global supply chains,” declared Saitex CEO and founder Sanjeev Bahl.

This self-proclaimed ‘Factory of the Future’ owes much to extensive research, development and investment by SIP Italy, a company that has been working with Saitex for five years to design the machines that make it possible to manufacture jeans in high wage countries. It has supplied the equipment installed in C&A’s new facility in Mönchengladbach, Germany, and in Fashion Cube’s in Neuville-en-Ferrain in the north of France. Other ‘urban factories’ are in the works in France, Italy and the Netherlands, Giorgio Morandin, Factor-Hit CEO, tells Inside Denim. “We reworked ideas that were in development in the 1980s and 1990s. Italy has a strong denim heritage, and manufacturers were at the time already looking for solutions to reduce staff,” he says.

The success of Factor-Hit is the result of a meticulous calculation of all parameters related to jeans manufacturing and finishing, timing each operation, taking into account local wages, energy rates and even the cost of building a facility. The main bottleneck in clothing manufacturing is the labour-intensive sewing, which Mr Morandin says is the main reason it was offshored. But, he says, two parameters change the equation: the first is reducing the number of workers, the second is reducing the skills needed to operate the machines. “We have adapted to the market context and each factory is tailored to a customer’s specific needs,” he says. Why now? “The pandemic triggered a change in thinking. Mass market brands especially felt the need to inspire their consumers with new story telling."

Local jobs and consumers 

When Inside Denim spoke to Christian Kinnen, director of Fashion Cube, the company was in the process of recruiting collaborators. “We are seeking to be as inclusive as possible, hiring people who have been out of work or had difficulty finding jobs and our project is enthusiastically embraced by local job seekers,” he says. Mr Kinnen has been nursing the FashionCube Denim Center project for a number of years, making his first proposal in 2017 to the Mulliez family holding company, the Association Familiale Mulliez (AFM). At the time, he was in discussions with Softwear Automation to install Sewbot equipment, but he says the technology was not ready and ended up adopting SIP Italy’s Factor-Hit concept.

A conjunction of converging trends made the project possible, he says, in addition to the evolution of technology. He cites the fact that six of the group’s brands were rethinking their business models to set up a production facility in France and produce only what consumers buy. “They accepted to pool their resources to lower their environmental impact and make the project possible,” he says. “Recent events have made it even more relevant.” He believes that consumers are prepared to pay extra if a product has added value. “Consumers are well aware that buying a garment that is made in France helps create jobs and reduces its carbon footprint,” he says. The €3.5 million facility will produce 2,000 jeans a day. These will retail from €40-60, 20-30% more than offshored products.

“Over the past few years, we’ve seen a resurgence in demand for goods that are made in America. As the original global hub for denim, there’s a real pride that comes with quality denim from Los Angeles and the consumer knows that,” concurs Saitex USA CEO Kathy Kweon.

The thinking behind C&A’s Factory for Innovation in Textiles (FIT) follows a similar line of thinking. The mass market retailer believes the added value of local manufacturing makes a bold statement and proves that sustainable fashion need not be a niche category, says Betty Kiess, head of corporate communications Europe.

Earlier this year, Karachi-based Artistic Milliners purchased a denim factory in Los Angeles, with the intention to create an Industry 4.0 design and production hub. “In 2021, we anticipate increased demand from international retailers and brands for near-shoring capacity, digital design services and sustainable solutions. Our investment in this factory gives us a launch platform in the US to meet the demand as we build the factory of the future,” says executive director of Artistic Milliners, Murtaza Ahmed. The facility, renamed Star Fades International (SFI), processes 100,000 units per month and, according to the press release, will grow to a capacity of 300,000 units per month. SFI is currently a laundry facility, but the company says it works with LA-based garment contractors for clients who want full made-in-America production.

Tissages de France, based in Rupt sur Moselle, is yet another example of investment in local manufacturing. Thomas Huriez, founder of French denim brand 1083, saved the operation from bankruptcy in 2018, and it will be adding jeans manufacturing to its denim making operations starting this October. “1083 has been growing by 30% every year, and now sells nearly 10,000 pairs of jeans per month,” Denis Heinrich, factory manager, tells Inside Denim. The automated sewing machines will enable the company to produce up to 10,000 jeans per month and accompany the growth of the brand specialising in jeans and sneakers Made in France.

Clean and lean

The reshoring of jeans production predates the pandemic, as demonstrated by Turkish conglomerate Taypa that has been operating a state-of-the-art facility in Kraljevo, Serbia, since 2019. Its Eurotay factory produces 200,000 jeans per month (2 million a year), with plans to reach 7 million yearly by 2025. Its current staff of nearly 1,000 is expected to grow to 2,500.

“We chose Serbia not only for its proximity to the European Union but also because we can run an agile, high tech, autonomous facility with a skilled workforce. We can produce jeans for European brands and retailers without generating excess stock, they can order what is selling in stores with short production lead times and transport time,” says Burak Karaarslan, general manager of Taypa.

“Interest definitely surged during the pandemic as brands faced many supply chain issues, either because goods were not being delivered, or they were left with inventory that they couldn’t sell,” says Eurotay factory manager Umit Enis. “Our facility is much more flexible than conventional factories, we can stock raw denim fabric and garments, and apply finishing or modify it to adapt to evolving trends."

“A lasting effect of the covid pandemic has been a re-evaluation and redesign of supply chains as customers face longer lead times than ever before. By shifting production to the US, we’ve largely been able to avoid this pitfall,” says Kathy Kweon at Saitex. “Our local state-of-the-art facility can produce a high quality, sustainable product that consumers are looking for, and do so at a price and speed to market that puts Saitex USA a step ahead of the competition.”

On a broader level, Murat Soylu, general manager of Eurotay, points out that manufacturing in remote countries adds costs that are not usually factored into the business-as-usual model. “When buyers place an order six months ahead without knowing what is going to sell, brands risk acquiring inventory that will become deadstock or be marked down. When you add freight rates and duty or custom taxes, the real cost to the brand is the total cost of ownership. It may seem logical to buy from cheaper regions but in the bigger picture, the cost of goods is more expensive than buying from a local supplier if the product does not perform and lies in the warehouse,” he points out.

Creativity & reactivity 

“When I started working in the denim industry, companies would produce their goods in-house, they had staff dedicated to pattern-making and prototyping and even had small laundries. People worked together, shared knowledge and expertise,” says Lucia Rosin, head of Italy-based denim design lab Meidea. The move to outsource changed all that, imposing rigorous management and allowing for less flexibility. “Mass market became mainstream, brands competed on price alone, this led to price wars and flatness of product,” she says. It may cost more to produce in the new local micro factories, she says, but they also offer the possibility of producing shorter runs and allow designers more leeway to develop special ranges.

She points out that indie brands have no way to produce small-scale runs that number in the few hundreds. Giorgio Morandin, at Factor Hit, agrees: “If a designer wants to make 100 pairs of jeans, it is not possible to produce them in Asia. Designers and small companies need access to local and on-demand manufacturing.” The same goes for mass market players, he says. “To be successful in a fast fashion market, a retailer needs to follow market trends closely while remaining in an acceptable price range.”

Reducing carbon emissions 

Environmental and social considerations are another key motivation for the creation of these futuristic denim fab labs. A few of the new facilities have taken over former industrial sites. C&A’s FIT found a home in a historical Monforts textile machinery factory and Taypa’s in a closed bus factory. Mr Morandin points out that building a new facility incurs high carbon emissions, citing a Saitex project in Detroit that would be housed in a former factory. C&A intends to make its FIT facility “carbon free” by combining renewable energy sources with regional production and sourcing. Brands and retailers are also keeping an eye on discussions within the EU on the creation of a carbon adjustment mechanism that could lead to a carbon price placed on imports as part of its Green Deal.

In addition to rehabilitating urban industrial sites, the automated nature of these facilities means that inputs and outputs are easier to measure and monitor. “We can share all sustainability-related data with our customers,” Banu Acun, Taypa sales and marketing director, tells Inside Denim. “Brands that have set goals to reduce their impacts increasingly request this information. To reach their targets they need to measure and show progress.” The company joined the Ellen McArthur Foundation Jeans Redesign Project this year, which she says aligns with its own sustainability goals. “We could be a solution partner for brands looking to reduce their carbon footprint. In the next five years, it may become compulsory that products provide Life Cycle Assessment (LCA) or Environmental Product Declaration (EPD) information on a label, like a care label, to be sold in Europe. We need to be ready for that as manufacturers."

Blue Matters, which includes two state-of-the-art facilities recently set up by the Ereks Garment and Era Denim group, is another example of a smart and sustainable denim fab lab that the Turkey-based group has invested in as part of its roadmap to circularity. It is spread over two sites, one in Istanbul dedicated to stitching and the other in Çorlu, which also houses a laundry. Powered by 100% renewable energy, they can produce jeans using only 10 litres of water per item, instead of the industry average of 40 to 60 litres, in Turkey, Kaan Sen, business development manager and circularity manager for Ereks, tells Inside Denim. Building a micro factory is in the group’s plans, he says, to offer just-in-time manufacturing, customisation options and produce shorter runs at cost-competitive rates. “A new automated stitching machine has just been installed in the Istanbul facility. It is a game-changing machine as one or two people can make up to 2,000 jeans per day,” he says.

Finishing labs requiring very little water are also being relocated closer to where brands develop their products, as seen at Turkish denim group Isko, which is setting up one of its Creative Rooms in London with new equipment that will be trialled by Hiut Denim Co. The Nanobubble Technology has convinced the Welsh brand to release its very first light washed jeans using the nebulisation system that radically reduces water consumption.

True to its local ethos, British indie brand Blackhorse Lane plans to install a mini wash lab in its manufacturing site located in a 1920s factory building in Walthamstow, in the north of London.

With the evolution of machinery, including waterless finishing processes, brands of all sizes, from mass-market to boutique, are investing in their own manufacturing facilities and reviving urban or local industry. “The delivery and payment issues brands experienced during covid has turned into a reality wake-up call which, all of sudden, made reshoring a desirable trend,” says Lucia Rosin. She believes that micro factories will see their day in Turkey, Pakistan and even Bangladesh in time. For Giorgio Morandin, “the creation of urban factories is a virgin market with unbelievable potential. It is a new industrial model that enhances brand value and identity, and provides new and more compelling story-telling opportunities”. A sign that smaller is, at times, better.

Local pride: Saitex’s new facility in the US is one of several urban factory projects in development with equipment supplied by Factor-Hit.

PHOTO: Saitex 

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