The Hindu Business Line : GHCL plans foray into home textile market thro' brand acquisition

GHCL Ltd, which has just raised $70 million through a foreign currency convertible bonds (FCCB) this week, is planning to enter the branded home textile market through overseas acquisitions.

The company is investing around Rs 230 crore in the textile sector to increase its capacity from 73,000 spindles to 1.4 lakh spindles annually.

Speaking to reporters here, the Joint Managing Director of the company, Mr R.S. Jalan, said that while at present textile accounts for around 20 per cent of the company's revenue and soda ash business accounts for the remaining 80 per cent, once the expansions are over textiles would contribute about 40 per cent of the turnover.

The company is looking at overseas acquisition for both soda ash and home textiles.

For textiles, the company is in advanced stage of negotiation with a company that has its own brands some of which are accepted in global retail chains. The company plans to get market access by acquiring these brands and eventually shift the production base to India to cater to the global market.

"As far as textiles is concerned, we are looking at branded home textile players in the developed market of the US and Europe to leverage on their market reach and branding power," Mr Jalan said.

"After acquisition we would shift the production unit to India to benefit from the cost competitive advantage," he said.

The company is also undertaking capacity expansion in its soda ash business and plans to increase it from the existing 6 lakh tonnes per annum to 11 lakh tonnes per annum in two phases with an investment of approximately Rs 750 crore.

With regard to growth in the soda ash business, Mr P Sampath, Joint Managing Director of the company, said that growth would be piggy backing on the growth in the glass industry and detergent industry both of which are growing at a very fast pace.

GHCL opened on Thursday at Rs 90 and touched a high of Rs 105 before closing at Rs 100.90 on NSE.

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page