Verticle Integration

shivi sangwan By shivi sangwan, 9th Mar 2012 | Follow this author | RSS Feed | Short URL
Posted in Wikinut>Business>Supply Chains, Procurement & Logistics

As the emphasis on quality control and cutting costs has been increasing, one company took the step towards controlling its quality at every step of manufacturing - Esquel Group. Esquel stands for world class quality and it maintains this reputation through controlling all processes, "from cotton to shelf" as they call it. "Fiber to Fashion" is what I would call Esquel's mantra.

Esquel Group - A near perfect example of Vertical Integration

Their process of manufacturing begins with farming and ginning of cotton in Xinjiang province of China. The scale such that they ginned 8000 tons ELS cotton in 2009. From there the cotton is moved to Goaming in China for the remaining processes of creation of a garment, where their specialty yarn spinning mills are located. Their 2,10,000 spindles focus on spinning high count yarn (up to 330s/3) which is then woven or knit in the same premises. They have an annual capacity of knitting 18,000 tons of fabric and weaving over 100 million yards of yarn dyed and piece dyed fabric per year. They have garment manufacturing facilities located in China, Hong Kong, Malaysia, Mauritius, Sri Lanka and Vietnam, which in total produced 82 million shirts in the year 2009. Most manufaturing comes from Goaming, the premises I had the opportunity to visit. It is a city in itself. Esquel provided me with a futuristic view of absolute specialization and consolidation. They produce everything that goes into making their garments in Goaming, except threads which are procured from Coats. They have merchandising and design departments even for each raw material, including the trims, accessories and packaging material, which are again produced in house. In addition they have also ventured into retailing. They have expanded into China Retail through their luxury shirt brand - PYE and casual shirt brand - ShirtStop. Their major clients however are located in United States and Europe. To meet the growing challenges of increasing labor costs Esquel continuously upgrades its machinery and invest in machines like sectional warpers and auto drawing machines to enhance flexibility and efficiency. Esquel believes in moving forward through its dedicated Research and Development facility, which applies various kinds of bio technologies to breed new varieties of cotton. Esquel also developed its own "Esquel 1" ELS seed variety, named Xinhai 33 which improves fabric strength and makes it more disease resistant. They are also experimenting with super fine high count 330/3 cotton yarn to provide finer fabrics.

A world where speed to fashion in conjunction with quality is becoming the priority, Esquel has fashioned itself as the most sought after manufacturer by cutting lead times through locating and controlling all processes and raw material that go into making a garment in a single premises.


Fashion, Garments, Manufacturing, Production, Retail, Supply Chain

Meet the author

author avatar shivi sangwan
Major in Fashion Business and Management. Passionate about writing, not just on Management but also book reviews and opinions..

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author avatar Funom Makama
16th Mar 2012 (#)

Nice work friend.

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