The Hindu Business Line : Mafatlal Denim mulls foray into readymade segment

Mumbai June 4 Mafatlal Denim is looking to foray into the readymade garments segment and will be setting up a garmenting unit by the middle of next year.

"The rationale for doing this is that we are established players in denim and many brands that we supply to now want the full package of fabrics plus garments," said Mr Rajiv Dayal, Managing Director.

The company is scouting for a location in a textile park, SEZ or an area next to an SEZ to set up the unit, with initial manufacturing capacity of 5,000 garments a day, to be scaled up to 10,000 later.

The total investment in the unit will be Rs 20-25 crore, which will be funded through a combination of internal accruals and debt.

"We would prefer to set up this unit in Gujarat, because that is where our other unit is. However, we are still evaluating possibilities," said Mr Dayal. After setting up a garmenting unit, the company will look into launching its own brand. "We will evaluate branding and retailing next year after our garmenting unit comes into operation," said Mr Dayal.

Capacity expansion

The company is also expanding its denim fabric capacity to 20 million metres a year from the current 10 million metres.

The total capex is Rs 110 crore, of which Rs 85 crore is being tied up through term loans under the Technology Upgradation Fund Scheme (TUFS); the rest is to come from internal accruals.

The expansion is expected to be complete by August 2007.

"With our expanded capacity, we expect to grow at 30-35 per cent a year. In addition, the turnover will grow to Rs 200 crore from Rs 100 crore now," said Mr Dayal.

Mafatlal Denim, earlier known as Mafatlal Burlington Industries, was set up in 1995 as a joint venture between Mafatlal Industries and Burlington Industries US for the manufacture and marketing of high-quality denim fabrics.

Last year, the Arvind Mafatlal Group acquired Burlington's equity in the joint venture, which led to the creation of Mafatlal Denim.

Currently, exports account for 40 per cent of the company's turnover.

On the effect of the appreciating rupee on exports, Mr Dayal said: "The rupee appreciation has been making it tough for exporters. But we have been lucky enough to be able to restructure our portfolio depending on what is beneficial for us, since we are not totally dependent on exports."

The company caters to global brands such as Levi's, Marks & Spencer, H.I.S and Lee. In India, its customers include Liz Claiborne, Pepe and Pantaloons.

More Stories on : Strategy | Readymade Garments

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

Stories in this Section
Prime Focus lends high-end visual effects to Hollywood flick

`Condo hotels latest trend in vacation ownership exchange'

Bombay Dyeing to offer platform for premium Indian brands

Volvo Car India looking at preferred finance solution partner

Mafatlal Denim mulls foray into readymade segment

New V-P for Grey Worldwide

`Open retail for FDI'

eBay India Motors to sell second-hand three-wheelers

Reliance unveils FM mobiles

Samina sleep systems launched