The Hindu Business Line : Ambattur Clothing dons new garb

Chennai May 24 Mr Vijay Mahtaney, Managing Director of the Rs 500-crore Ambattur Clothing Ltd, and one of those who in the mid-1990s brought sartorial elegance to Corporate India with the ColorPlus smart casuals range, is on overdrive sewing up a variety of diversification plans.

From setting up hotels, large residential projects and IT parks to an avowed intention of coming back to the branded garments business two years down the line, Mr Mahtaney has it all marked and cut.

Sitting in his cool, minimalist office with a floor-to-ceiling glass wall, overlooking a lush roof-garden and far removed from the heat and dust and pot-holed roads of the Ambattur Industrial Estate — Asia's largest `small-scale' estate — Mr Mahtaney outlines his sweeping plans which will change the profile of his group of being a supplier to top-notch garment brands such as Gap, Levi's and Banana Republic.

Taking a "long-term interest in real-estate," as Mr Mahtaney puts it, the group has invested Rs 150 crore in a land bank across several cities over the past few years, worth much more at today's market value. The group has begun work on an upper-end 220-room hotel to come up just off Anna Salai near Guindy in Chennai, the management of which he has signed up with a US hotel chain. This will be followed with a 220-250-room hotel in Coimbatore. The Chennai hotel project is expected to be operational in early 2010.But the group's first IT park has already sprung up. "Unlocking value" at ACL-owned land in the estate, the group is constructing Ambit, a sprawling IT park of 1.2 million sq. ft on a five-acre plot. The hotels and IT Park will entail an investment of Rs 400 crore, 70 per cent of which will be funded internally.

The group's foray into residential projects will begin with a 110-apartment complex at Perungudi, off the IT highway on the southern outskirts of Chennai. This mid-market apartment complex, Mr Mahtaney says, will be done in 18-20 months at an investment of Rs 40 crore.

To exercise better control on these investments, the group's real estate projects and land bank will be spun off into a separate company, Ambattur Developers Pvt Ltd, with its own management team. An ACL subsidiary will handle the hospitality part of the diversification. Once done, the group will have three distinct entities in real-estate, hospitality and the garments business.

Mr Mahtaney indicated that he intends to seek public funds once the hotel projects are up and running a few years down the line. However, the flagship company, ACL, will not see any equity dilution.

Mr Mahtaney seemed to be chafing at the bit to get back into the branded apparel business in the local market. Having been a trailblazer with the ColorPlus brand before the group sold out to Raymonds, he says that ACL has a lot of expertise in the garments business, which he can bring into play. "Most brands have a disconnect with what's available in the international market. None of the leading brands too, is supported by a thriving export industry like ours," he says. Once his non-compete clause expires two years from now, he says he will be back in the market.

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