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OCM India, the 87-year-old textile company owned by US-based WL Ross & Co, has set itself a stiff target of wiping out its accumulated losses by 2012-13, and take off on its expansion programme on a faster track thereafter.
The privately held, former SK Birla Group company, while refusing to reveal the exact losses, indicated that it was lesser than the value for which it was bought by WL Ross in 2007 for $37 million.
WL Ross, which specialises in turning around loss-making companies has committed to be a long-term investor and support its plans to pump in about Rs 30 crore annually for its expansion and marketing spends for the next three years.
Top management change
Ross changed the top management of OCM only in November 2010 and subsequently shut down its ready-to-wear garments business as part of its restructuring.
WL Ross has made it clear that its investment in OCM will be like those in the Mittal-owned International Steel Group, International Textile Group and Compagnie Europeene de Wagons, in which it has been involved for nearly 10 years.
OCM, which has begun to notch up net profits, has already flagged off an image makeover programme, uncorking a new brand identity and stitching up plans to expand its portfolio of offerings. “We will be investing about Rs 15 crore annually for the next three years to ramp up our capacity of our Amritsar plant from the present 5.5 million mts to 6.2 million mts by March 2013 and 8 million mts by March 2014,” Mr Nitin Jain, Chief Marketing Officer of OCM India, told media persons here on Thursday.
Marketing spend
In addition to this, it will be spending another Rs 15 crore annually towards marketing, as part of its makeover.
It has unveiled a new brand identify that speaks of the company's evolution and its firm focus on textile.
OCM is today close to occupying the second position in this segment, where Raymond commands an unchallenged market share of about 62 per cent.
“Our market share (in this segment) is about 7 per cent, which we aim to increase to 13 per cent in the next two to three years,” Mr Jain said.
The fabric maker, which exports some women's Western wear products, has no plans to introduce them in the domestic market.
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