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Reliance Industries Limited has formed a joint venture company with China’s Shandong Ruyi Science in a bid to revive its struggling textile business. RIL had started as a textile company under Dhirubhai Ambani but today its textile business accounts for a miniscule part of the company’s revenue
The new venture will bring together RIL’s Vimal brand and Ruyi’s worsted suiting brand ‘Georgia Gullini’. As per the definitive agreements, RIL will transfer its existing textile business into a newly incorporated company, for which RIL will receive cash consideration. RIL will own a majority 51 per cent in the proposed venture, with the balance owned by Ruyi. The company did not disclose the size of the deal. Nikhil R. Meswani, Executive Director, Reliance Industries Ltd., said that the move will help Reliance reposition its textile business on a higher growth path.”
Growth potential Our partner’s deep commitment and global reach in the textile business will enable this venture to harness the growth potential of the Indian market and emerge as a global textile player,” he said.
Ruyi has revenues of over $3 billion and has a global presence including in the US, Europe, Japan, Australia, New Zealand and China. Ruyi has a portfolio of brands such as ‘Taylor & Lodge’, ‘Harris Tweed’, ‘Royal Ruyi China’, ‘Nogara Italy’ and ‘Indios Italy’. The joint venture company will look at launching some of these brands in India. Qiu Yafu, Chairman, Shandong Ruyi Group, said the partnership with RIL reflected the closer economic relations between China and India.
Through the joint venture Ruyi will hope to capitalise on RIL’s wide distribution network in India while RIL will gain access to Ruyi’s technology and its global reach.
It was earlier reported that in 2012 RIL had put its textile business on the block but did not find any buyer. The textile business contributes $300-350 million to RIL’s overall $65-billion annual revenue. The company’s textile business, located at Naroda, near Ahmedabad, was set up in 1966.
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