Vietnam denim manufacturer Saitex is sticking with plans to open up its first U.S. operation in the City of Angels. With American clients like J.Crew, Everlane, Target, Outerknown and more, the denim heavy hitter has been plotting a stateside move since before the pandemic struck.
In April, founder and chief executive Sanjeev Bahl told Kingpins podcast host Alison Nieder he believes the factory is still on track to be fully operational by Q3 or Q4 of this year, despite the challenges imposed by the spread of the coronavirus.
Characterizing the new facility as the “factory of the future,” Bahl said it would encompass all of the technology, robotics, artificial intelligence and digital assets the company has cultivated thus far in its Vietnam factory.
Saitex has prided itself on carrying the sustainability torch for the denim industry, and the Los Angeles facility will incorporate the manufacturer’s most successful advancements. Run with clean, renewable energy, its Vietnam factory is the first in Asia to achieve B Corp status.
“We would mirror what we have scaled in our Vietnam facilities,” Bahl told Rivet of the new factory, which will include solar thermal, water recycling and clean energy that doesn’t rely on fossil fuels. The plant will be “fairly automated,” he added, and will operate on Industry 4.0 Standards via the use of lasers, ozone, e-flow and one-step wash technologies that will further reduce its CO2 footprint.
Initially, the factory will produce 600,000 units per year, though Bahl said he expects the capacity to increase gradually and peak at 1.2 million units per year.
The L.A. experiment could determine Saitex’s future stateside plans, he said. “Based on the success of our first foray into manufacturing in the U.S., it would allow us to expand into different geographies,” he said. Benefits to that strategy would include the development of collaborative relationships and agile distribution, he said.
First, though, the new operation must work to build up its customer base. Brands seeking to push their businesses forward into the 21st century will relish having all of the elements of production under one roof, Bahl said. “Organizations who seek on-shored smart manufacturing with speed and realistic pricing will benefit from our manufacturing infrastructure,” he said.
They’ll have to do some acclimating when it comes to pricing, he admitted. “Traditionally, factories in the U.S. are two times more expensive than Far East manufacturing for premium jeans,” he said. “We intend to come in at one-and-a-half times on the cost, but the added advantage for our clients would be our development capabilities.”
Travel restrictions implemented in light of the COVID-19 crisis will mean development and production will straddle two hemispheres, however.
“For the current situation and the foreseeable future, with overseas travel constraints, the U.S. facility would be able to develop product for Vietnam manufacturing,” Bahl said, since the equipment and chemistry will be seamlessly aligned between the two facilities. “This further blended cost model would make our proposition even more attractive,” he added.