The Hindu : Business : Raymond venture with Italian firm for woollens

Online edition of India's National Newspaper
Friday, Jun 10, 2005

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Business

Raymond venture with Italian firm for woollens

Staff Correspondent

To export 70 p.c. of its output

— Photo: Shashi Ashiwal

LEVERAGING STRENGTHS: The Chairman and Managing Director of Raymond, Gautam Singhania, addressing a press conference in Mumbai on Thursday. — Photo: Shashi Ashiwal

MUMBAI: Raymond has announced a proposed joint venture with Lanificio Fedora, Italy, a leading woollen fabric manufacturer. Raymond will transfer the existing carded woollen unit, making largely blankets and shawls at Jalgaon, Maharashtra, to the new joint venture.

The cost of the total project, with capacity addition, is Rs. 40 crore and both parties will take a 50:50 stake in the venture.

The loss-making Jalgaon unit had a turnover of Rs. 17 crore last year and a low capacity utilisation due to severe competition from cheaper acrylic based products.

Apart from accessing technical expertise from Lanificio Fedora, the new partnership will see the enhancement of current capacity from 15 lakh metres to 25 lakh metres annually in the first phase.

In addition, the venture will leverage the strengths of the brands in the domestic and international markets. It will have a product mix that includes blankets, shawls and fancy woollen jacketing and expects to export 70 per cent of its output. The new venture expects a revenue of Rs. 65-70 crore in the first year of operations.

According to Gautam Singhania, Managing Director, Raymond, the joint venture will be on stream by January 2006 and will focus on exporting to top brands. It will open a new line of products for Raymond and will also help the company utilise the idle capacity at the Jalgaon facility.

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