GHCL to enter textile retail segment abroad

Gujarat Heavy Chemicals Ltd (GHCL) will soon foray into global retail market for apparels.

The company plans to announce its proposed retail foray in textile in a month which will be focussed more on China, India, Pakistan and some of the east European countries.

Sanjay Dalmia, chairman, GHCL Ltd told reporters here the company plans to exploit the potential of under-retailed markets of China, South Asia and East European countries as the next logical step as part of its strategy for company¿s textile business.

Dalmia said GHCL will go for either company owned stores model or as an alternative strategy for a franchisee model for retail textile business.

In franchisee model the company will offer support and guidance to individual or companies with display space and trade facility at prime locations worldwide.

Dalmia said the emphasise would be more on franchisee model where there may be some percentage of company-owned stores. GHCL management feels the markets with overexposure in the retail business in the US, UK and other western parts of Europe have already been tapped, mostly by the existing players.

Dalmia said the lack of forward integration in textile retail squeezed profit margins in home textile business during the last quarter.

The EBIT for the home textile segment remained lower at Rs 1.4 crore compared to Rs 1.7 crore during the corresponding period last year. Interestingly the turnover in home textile segment has registered a 184 per cent jump from Rs 30.58 crore to Rs 86.96 crore.

Dalmia also admitted a dent in the company¿s export business due to the rupee appreciation. He said despite some forward cover in foreign exchange dealing company suffered by 10 per cent in value term in export due to strengthening rupee against the US dollar.

The Indian home textiles spinning unit of the company is expanding capacity from 115,000 spindles to 140,000 spindles and also has a processing unit at Vapi in South Gujarat catering to the demands of the US-based Dan River acquired by the company last year and also Rosebys of UK.

For the Dan River unit, the company has embarked on heavy outsourcing from India, Pakistan, Mexico and Turkey.