AMANN India’s new state-of-the-art production site promises a greener future for thread industry

AMANN has been present in India for more than 15 years and has been offering high-quality sewing and embroidery threads for India’s thriving apparel, footwear and leather market. On 18th April 2024, AMANN India inaugurated its new sustainable, state-of-the-art production site in Ranipet, Tamil Nadu. This expansive manufacturing facility, covering 32,000 square metres, serves as the central hub for producing high-quality sewing thread across various applications. The factory is designed to produce 800 tonnes of thread annually. With a deliberate emphasis on inclusivity, it boasts a team of 200 individuals striving towards gender parity, with a targeted female-to-male ratio of 50:50.

Team Apparel Resources was graciously invited to participate in the inauguration ceremony. During the event, our team engaged in an insightful discussion alongside AMANN board members, including Peter Morgalla, COO of AMANN Group and Wolfgang Findeis, CFO of AMANN Group as well as with Sanjeev Grewal, CMD, AMANN India and Regional Business Director – SW Asia & ME, AMANN Group. The team explored the purpose and offerings of the new facility, as well as its future plans.

AR: Congratulations on opening a new factory in India! What is the rationale behind establishing the factory?

Peter: Generally, our vast experience in the textile industry has shown that establishing a factory is essential for success because the presence of a factory ensures that crucial services are provided within a short response time. Moreover, since we cater to various industries and their applications, we often need to customise products according to customer needs, a task efficiently undertaken within the factory premises. While it’s theoretically possible to provide these services from other countries, it doesn’t align with customer expectations due to many probable logistics challenges that may arise.

Since 2007, we’ve recognised the importance of having our own manufacturing facility. Initially, we focused on niche, high-quality products not readily available in the Indian market. Now, with the factory being operational, we’re poised to engage in bulk production and offer a comprehensive range of products.

AR: With increased production capacity, how would you now assist your clients in achieving faster production?

Peter: Enhancing production speed and efficiency is indeed important. Typically, our clients expect colour development within a span of two to three days, considering the make-to-order nature of our market. This process involves receiving fabrics, conducting colour development, providing samples for approval and subsequently initiating bulk production.

Regarding sampling, we offer both physical and 3D samples to cater to varying preferences. While many manufacturers are embracing 3D sampling, we understand that some clients still prefer traditional methods. Though we offer both 3D sampling as well as follow the traditional approach, we maintain flexibility in our approach. However, we encourage the adoption of digital solutions due to their precision and measurability.

Wolfgang: Our system operates in the cloud, facilitating seamless colour development and ensuring the reproducibility of colour recipes. We are committed to providing efficient solutions to meet the evolving needs of our clients.

AR: What specialised products do you plan to introduce in the Indian market?

Peter: We maintain a diverse product range without compromising on quality and service. Our aim is to offer a consistent global standard across all our products. Whether these products are sourced from India, China, Bangladesh or Europe, customers can expect the same quality and colour. We operate with a global data bank, ensuring seamless sharing of recipes amongst our teams worldwide.

Our wide product range enables us to cater precisely to various applications and designs. We understand that our customers, primarily factories, prioritise efficiency. They measure success by minimising stoppages during the sewing process. Our goal is to keep their operations running smoothly, setting us apart from our competitors.

Sanjeev: We have a dedicated sewing advisory team focused on problem solving and process improvement at the customer’s end. One product we’re excited to introduce in the Indian market is Serafil.

This product boasts sophisticated technology, prioritising both performance and aesthetics. Even climatic factors in eastern regions of the world like India and Bangladesh don’t pose a challenge for our product. Whether it’s higher humidity levels or other environmental conditions, our product is designed to excel. For instance, our successful production in Bangladesh over the past decade, where humidity levels often reach 90 per cent, demonstrates our product’s resilience in such climates.

AR: Could you highlight some of the recent technological advancements or product developments in AMANN Thread’s portfolio that have had a significant impact on the apparel industry?

Peter: Our focus has always been on refining processes and products within specific applications. Regarding processes, the primary trend revolves around automation and digitalisation to minimise human errors. Automation, exemplified by the Lawer installation, streamlines operations where recipes are entered and the system handles mixing and transportation autonomously, eliminating human intervention. Digitalisation involves digitising the databank for daily production use, further mitigating errors. This approach not only enhances product quality but also reduces waste significantly.

Moving on to product applications, the latest trend involves high-bulk products, now a standard in the market. These products offer exceptional comfort, akin to wearing a cloud, making them ideal for underwear. We continually innovate in this area, seizing every opportunity to stay ahead in this competitive landscape. However, staying ahead is an ongoing challenge; it’s like a race with no definitive finish line.

Adapting the strategy to changing production quantities is important for AMANN, with regular ABC XYZ analyses conducted in real-time to inform decision making. The analysis determines whether to maintain stock levels based on product-ticket combinations. In Europe, stock levels are typically at 60 per cent, compared to 15 per cent in Asia, where the majority of orders (85 per cent) are made-to-order. Inventory management for finished goods involves anticipating global logistics challenges, such as during the Covid pandemic, where increased stock levels protected customers effectively.

AR: Do you perceive growth opportunities in the Indian apparel, leather and automotive industries, which are your primary targets?

Wolfgang: Absolutely! India’s rapid growth trajectory is evident, buoyed by impressive growth rates and shifts in global dynamics, particularly in light of changes in China. We anticipate a significant influx of foreign businesses into India, including industries like automotive, where we have a presence, supplying products such as airbags and other applications.

India’s automotive sector, with the establishment of manufacturing facilities by renowned brands like German automakers, presents substantial potential. While we primarily serve Tier-1 suppliers like Daimler and BMW, our aim is to align with OEMs and scale our capacity accordingly to meet their needs.

Our initial focus lies in the apparel and leather industries, given their prominence in the region. This is why we strategically located ourselves in South India, where both sectors are thriving. Within the apparel industry, we position ourselves akin to Tier-1 suppliers due to our emphasis on quality and competitive pricing. As for target customers, our focus remains on those who prioritise quality and value in their raw materials, a criterion we aim to meet.

AR: Do your factories in Asian regions including India, Bangladesh and Vietnam cater to differential products for the entire region or will these factories now be producing threads specific to the country’s requirements?

Peter: In general, our focus lies on catering to the local market. We consider crucial factors such as timing of our customers, including lead time and development time. Hence, the primary intention is to target the Indian market. However, apart from India, Sri Lanka also remains a significant region to address for AMANN, given its close proximity to India. As previously mentioned, while we adhere to global standards, there are countries without factories such as Cambodia, Thailand and even Australia. Moreover, there are additional countries in the region where, through our network of sales agencies, we also distribute our products.

Michaela Küchler, Consul General of Germany in Chennai (India) speaks with Team AR on India-Germany Trade Relationship FTA talks between Germany and India are on the table Germany prioritises finalising the FTA with India to encourage country diversification away from China. However, with ongoing elections in both India and the EU, negotiations are pending until new governments are formed. Anticipated progress is targeted for the first half of next year. Germany holds a significant presence in India, with many German companies already established in the country. German firms constitute a third of European companies in India, with substantial trade and investment volumes. Given Germany’s prominent position in the Indian market and its export-oriented economy, finalising the FTA is deemed crucial. Germany to send delegates to India and discuss the migration of skilled workforce To address the high demand for skilled labour in both Germany and India, collaborative efforts are underway. A delegation of experts from Germany is set to engage in discussions with Indian counterparts to understand the needs of the German market and explore opportunities for skilled migration. Emphasis is placed on safe migration practices and reliable partnerships. Whether it’s in universities, or in professions such as mechanics, tool makers or welders, the need is ubiquitous. In Saxony, a German state with a population of 4 million, approximately 400,000 individuals are projected to exit the workforce over the next decade and will need to be replaced. This presents a monumental challenge, necessitating a concerted effort to attract skilled workers.

AR: AMANN has been known for a long time as a company championing sustainability practices. Could you outline AMANN’s major sustainability practices that contribute to a circular economy and elaborate on the specific criteria that have led to the company receiving awards for its sustainability initiatives?

Peter: Championing sustainability practices is important for us, as evident from our sustainability report that highlights our inaugural zero liquid discharge initiative along with a number of other sustainability initiatives that we have taken. Broadly speaking, our approach revolves around three key pillars: CO2 emissions reduction, encompassing CO2 equivalents and other gases; water conservation; and embracing the circular economy model, which involves recycling materials or obtaining credits.

We utilise materials like recycled bottles or industrial waste and our biodegradable products have undergone successful testing, signalling our readiness to incorporate them. However, despite our readiness, the biodegradable product market currently lacks traction due to the necessity for comprehensive implementation. For example, producing just one per cent of biodegradable sewing thread makes little sense without considering the fabric it complements, presenting logistical challenges.

Nevertheless, we’ve successfully developed a biodegradable sewing thread that performs well. Notably, we collaborated with Lidl, a German company, to produce a product line – a jacket – entirely made from biodegradable materials. Unfortunately, the market response fell short of expectations, as customers were unwilling to pay the premium for sustainable options.

Wolfgang: Now, why do we win these sustainability awards? Many companies simply put words on paper, presenting strategies and many such similar things. The key success factor lies in our transparent and well-defined processes, which we not only document but also practically implement. We work according to these processes every day, ensuring continuous improvement and clear accountability. I always emphasise the importance of confronting issues head-on. If someone deflects responsibility to a team or offers vague explanations, it’s a non-starter.

We also believe our code of conduct serves as the foundation. However, we have numerous policies implemented across different departments. For instance, in the purchasing department, we prioritise qualified sources that adhere to our German standards, ensuring no child labour, abuses, environmental harm, etc. Can clients trace this back? Absolutely. If you hold a spool and inquire about its batch and production journey, you can have detailed information about which batch it belongs to, when and where it was produced and by whom.

AR: Can you provide insights into AMANN’s forthcoming expansion strategy in terms of entering new markets and expanding its presence in existing markets?

Peter: Our origins lie in Europe, primarily Germany and Western Europe. About 10 to 15 years back, we initiated investments in Asian countries, starting with China. This marked a significant move for us at that time.

During those discussions, we outlined our intention to invest in four key countries within the Asian textile markets: China, Vietnam, Bangladesh and India. India is the final country slated for investment in this phase of our strategy. However, we harbour aspirations for further growth in these vast markets.

Plans for a second plant in Bangladesh are already underway and we aim to expand production in Vietnam as well. We have already been present in Chittagong. We are in the process of developing a factory there, having already acquired the land. Construction for the second factory is slated to commence, ideally, next year. The upcoming year presents an opportunity to introduce new processes such as twisting and bonding, alongside extending our operations.

Given the sheer size of India, we envisage establishing a second or even a third factory over the coming years. Our focus remains on growth within these markets, without venturing into new territories such as Indonesia.

AMANN is undoubtedly an ethical company and has gained respect in the industry worldwide. Team Apparel Resources was also present at the inauguration of the AMANN factory in China. We feel honoured about our association with AMANN and the mutual respect that we strive to maintain, always adhering to ethical standards.