Calitri Denim Industries of Italy, the manufacturer of premium Ring Spun denims , has entered into Joint Venture with GFM Textiles of Mexico . The Denim division of GFM is also commonly known as Parras.
GFM is a diversified group with interests in Minerals, Energy,Electronics and Textiles. Its denim division Parras has four plants and an annual production capacity of about 100 million metres.
On the other hand , CDI is a much smaller plant with a capacity of about 15 million metres p.a.
Probably due to their relative sizes, the Joint Venture GFMT Italy, will be 80% owned by GFM and 20% by CDI. GFM also has an additional option to acquire all of CDI’s assets within next 12 months.
The Joint Venture gives advantages to both the sides since GFM gains from the CDI’s design , development and quality and its premium image of an Italian manufacturer in the market and CDI gains from the size of GFM.
It needs to be noted here that the exports of denim and jeans from Mexico has been continously falling over a period of time . However, the exports of Denim from Italy to USA had been growing due to the increased imports by premium and high-end Denim brands like 7 for all Mankind, Chip and Pepper and numerous others. The Mexican manufacturer not only benefits from the image of an Italian supplier (that is why the name has been changed to GFMT Italy), but also gains access to some high-end customers of CDI.