The Hindu Business Line : Benetton mulls sourcing products from India

Until now DCM has been supplying Benetton's products for the Indian market, but the Italian company is now hoping to source products from Indian suppliers for its global operations.

Mumbai , April 27

UNITED Colors of Benetton has definite plans for India and key among them is outsourcing its garment requirements.

According to Mr Stefano Pigozzo, Purchasing Manager, United Colors of Benetton, in India DCM Benetton has been supplying its orders. However, Benetton is looking at volumes of two-five million pieces annually for direct exports through vendors from India. It is likely to come to a decision on the issue or create a strategy over the next six months, he said.

Benetton is also considering other local players to supply its requirements, but if DCM can supply its volumes it will not look further.

Until now DCM has been supplying Benetton's products for the Indian market, but the Italian company is now hoping to source products from Indian suppliers for its global operations. The company has been slow to embrace foreign suppliers. While it manufactures its yarn and knits and weaves its products in Italy, it subcontracts its cutting processes to Hungary, Croatia, Tunisia and Portugal. Its annual production is 110 million pieces. It has such brands as Mama (for expectant ladies), Sisley, Playlife, Killer Loop and more.

Said Mr Pigozzo, "To stay in the market, we need to change many things — the method, processes of production. We have to convert to the idea to buy ready garments. I am here to understand what the Indian market has to offer us."

Mr Pigozzo added that DCM Benetton could also become the `headquarters' for research in India on sourcing ideas and the kinds of garments that can be made and exported. He said: "We are looking at using Indian fabric and adapting it to our styles for sale in India."

The company, he said, was also contemplating a `global' strategy for its future. It posted a turnover of euro 1,700 million for the year ended December 2004 and was seeking to maintain the same level.

Benetton, he added, has also opted for outsourcing production in line with other companies. He said the textile trade could not survive in Italy because of high production and labour costs. The company employs 2,000 people in Italy and outsourcing production could eventually mean that only about 300 people will remain in the Italian operations.

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