The JV with UCO NV will create denim capacity of 80 million metre a year. |
Raymond today announced that it has entered into a 50:50 joint venture with UCO NV of Belgium. |
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Raymond and UCO will bring their denim business under the JV company, to be christened UCO Raymond, to create a capacity of 80 million metres a year. The company will be based out of Europe. |
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Claimed to be the first of its kind in the world, the new company will have denim manufacturing units in four countries "� UCO's in the US, Belgium and Romania, and Raymond's unit in India. |
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The Belgium company, like its Indian counterpart, specialises in high value-added denim. European and American markets provide the best margins for the upper-end denim garments. |
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"The joint venture will be the biggest player in the European denim market. In its first year of operation, the JV is expected to have a turnover of more than Rs 1,100 crore. The management of the company will take shape by the first quarter of FY07," said Gautam Singhania, chairman and managing director, Raymond. |
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UCO's denim and flat fabric businesses account for 75 per cent of its sales. Its denim turnover in 2005 was Rs 550 crore. At present, the company has capacity of 30 million metre, which will increase to 40 million once its Romanian unit is commissioned in May this year. |
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Raymond has denim capacity of 30 million metres a year. This will increase to 40 million metres when the company's expansion is completed by March. Moreover, the company is expecting Rs 450 crore turnover from its denim business in the FY06. |
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This is the fourth JV that the Indian textile player has entered into with European companies. Last year, Raymond had signed three JVs "� with Italian woollen fabric manufacturer Lanificio Fedora, a Rs 206-crore JV with Italian Gruppo Zambaiti to manufacture high-value cotton shirting in India, and another JV with French player MOB to manufacture files and rasps at an investment of Rs 21 crore. |
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"The JV with UCO will give us a European face. The new company will have a better product mix, better realisation and a more effecient supply chain," said Pradeep Bhandari, group president, Raymond. |
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The global high value segment has 30 per cent share in the $4.5 billion denim market. The new company will have 7 per cent share in the high-value segment. |
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