The Hindu Business Line : Raymond to invest Rs 100 cr in denim

Mr Gautam Singhania (right), Chairman & Managing Director, Raymond Ltd, and Mr Pradeep Bhandari, Group President, addressing a press conference in Mumbai on Thursday. - Shashi Ashiwal

Mumbai , March 31

RAYMOND Ltd has said that it would be investing Rs 100 crore in augmenting its denim capacity by 10 million metres per annum.

This would take Raymond's denim capacity to 40 million metres of denim per annum and position it as the largest player in specialised ring denim in the country.

"Denim has come back strongly and we expect the demand to remain firm for the next three years," said Mr Gautam Singhania, Chairman and Managing Director, Raymond Ltd. Raymond exports 60 per cent of its denim production.

The capacity additions are being put in place at Raymond's Yavatmal denim unit. Capacity at this facility was earlier increased to 30 million metres from 20 million metres.

Mr Singhania acknowledged that the fabric business does tend to get cyclical. "But the trends in denim have changed. Today fashion designers are using it. Denim has moved from a basic to high fashion fabric," he said.

Raymond is focussing on moving up the value chain in all its businesses. But denim will be the focus area, he added.

The company also formalised the Rs 200-crore deal with Gruppo Sambaiti, the Italian textile company. Raymond has set up a 50:50 joint venture with Cotonificio Honegger, part of Gruppo Zambaiti, through this deal.

The joint venture will set up a greenfield facility at Kolhapur in Maharashtra to manufacture a cotton and cotton linen shirting fabric with a capacity of 11.5 million metres.

`Sufficient' reserves: Raymond, sitting on cash reserves of Rs 600 crore, is open to international acquisitions as the industry worldwide is going through consolidation.

"We are happy we have sufficient cash reserves. There could be some international opportunities that might come up. We see the reserves as a war chest to protect Raymond." said Mr Singhania.

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