The Hindu Business Line : Raymond to invest Rs 211 cr to expand apparel business

The program will include setting up two new manufacturing units for apparels and denim-wear in Bangalore and a capacity expansion of its existing denim manufacturing facility at Yavatmal in Maharashtra.

The company's board today decided to set up a new suit and formal trouser manufacturing facility in Bangalore with an annual capacity of 0.5 million to 1 million trousers in two phases at a total project cost of Rs 40 crore. Phase-I of the project will be operational by March 2004 and Phase-II by September 2005.

Raymond will also set up a denim-wear manufacturing facility in Bangalore with an annual capacity of 3 million pieces at a total project cost of Rs 44 crore, which will be operational by December 2004.

Additionally, Raymond will expand its denim manufacturing capacity at Yavatmal to 30 million metres per annum from the current 20 million metres per annum at a total project cost of Rs 127 crore. This will go on stream by April 2005.

According to Mr Gautam Singhania, Chairman, Raymond, the suit and trouser facility will make 1,000 suits per day, going up to 1,500 suits per day, and 2,000 trousers per day, eventually rising to 3,000 per day.

The rationale behind the capacity expansion is to move up the value chain in terms of solutions provided to customers. The focus of the expansion, he said, is on exports.

According to Mr Nabunkar Gupta, Group President, Raymond, a large portion of this capacity expansion will be earmarked for existing customers. This is in response to customers seeking value-added products from their preferred vendor.

The expansion is also aimed at making the most of opportunities that will arise in 2005 when quotas are dismantled. The expansion will seek to build on scale and competitiveness and improve on delivery schedules.

The expansion is to be funded through internal accruals and loans under the technology upgradation fund scheme. There will not be a dilution of equity to fund the expansion, he said.

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