The Hindu Business Line : Textile cos gear up to ride retail boom

New proposals
Shri Govindaraja Mills plans a Greenfield venture in Andhra Pradesh
Pioneer Group has plans to set up 100 Hakoba Lifestyle retail outlets across India and overseas by the year end
House of Pearl Fashion Ltd plans to double capacity at an investment of Rs 400 crore

Mumbai , Jan. 18

Textile companies are fast gearing up to ride the retail boom, investing in capacity additions and signing exclusive agreements with retail companies. The currently promising international markets, with the cap on Chinese exports to the US applicable until 2008, have added vigour to their expansion plans.

The industry buoyancy can be gauged from the fact that even relatively low profile small and medium sized companies are investing in new units.

Shri Govindaraja Mills, an unlisted company, plans a Greenfield venture at Cuddapah, Andhra Pradesh for 1-lakh spindles, and will add 25,000 spindles at Aruppukottai, Tamil Nadu, to its existing capacity of 1 lakh. It will invest Rs 350 crore through the Technology Upgradation Fund Scheme (TUFS), said company officials.

Ahmedabad-based Gupta Synthetics, a listed company, will invest Rs 220 crore (partly through TUFS) for setting up a new manufacturing unit of nylon tyre cord fabric (NTCF) and nylon filament yarn at Silvassa. "Most of the installed capacity of 8,128 tonnes per annum will be operational from October 2007, while NTCF unit will be on stream from March 2008," said a company official.

In a bid to maintain their brand-value in the present retail rush, some of them are setting up their own outlets or sewing up exclusive manufacturing arrangements with big retailers.

Pioneer Group, which acquired Hakoba brand in 2001, has plans to set up 100 Hakoba Lifestyle retail outlets across India and overseas by the end of 2007. "We wish to set up 50 stores across India by February-end. Our target is to have 200 stores and achieve a turnover of Rs 150 crore by the end of 2009," said Mr Srikant Velu, CEO, Hakoba Lifestyle Ltd.

Celebrity Fashions, Chennai-based garment exporter, recently signed an agreement with Reliance Retail for its economy brand `Spirit', to produce shirts, trousers and t-shirts priced between Rs 500 and Rs 800.

The ready-to-wear supply chain `House of Pearl Fashion Ltd', a wholly owned Gurgaon-based unit of international entity `House of Pearl', plans to double its capacity to 40 million pieces at an investment of Rs 400 crore in the next three years.

"The 10 per cent cap on Chinese textile exports will continue till 2008. This has also provided ample opportunity for India to establish itself in the export market and compete with China when the cap on the country's textile exports will be lifted,'' said an analyst with a private broking firm.