UK chemicals, paints and fibre giant Courtaulds Plc has shortlisted India as the location for its third tencel fibre plant, along with Indonesia, Singapore and South Korea. The 2,100 million company plans to invest over $200 million to set up a unit with a minimum capacity of 60,000 tonnes to manufacture the wonder fibre, the first new man-made fibre for the past 30 years.
Courtaulds may go in for a joint venture, provided it has management control in the venture, or float a 100 per cent subsidiary if it decides to set up the project in India. The UK company, which has set up two other tencel plants in the US and Europe, is likely to use a plant in India as a base for supplying the fibre to the entire region.
Talking to Business Standard about the companys business plans in India, Cour-taulds director Peter Rogers said, India is surely a key country in the running for our third tencel plant in the world. But a final decision is to be taken within a years time.
More From This Section
According to Rogers, India offers the advantages of educated human resource and ease of business, since English is widely spoken in the country.
Courtaulds had quit India over a decade ago after breaking off from its Shalimar Paints venture. However, it now sees both India and China as key investment destinations. It re-entered India through a 100 per cent subsidiary colour coating company two years back. The company commissioned a lamitube plant in Goa on Tuesday.
The company has also shortlisted India for investments in other fields like plastic packaging tubes, mostly used for health and beauty care products, and acetate-based chemicals.
Slightly costlier than cotton, tencel is a biodegradable and eco-friendly product which combines attractive aesthetics with absorbency and high strength. The fabric, which has become a rage with fashion designers in Europe, is used to meet a wide range of specialist needs in healthcare and other markets.
Tencel produced in the proposed Indian plant would mostly be exported to the Asian region. The importance of the Asian market can be gauged from the fact that as much as 13 per cent of the companys worldwide sales came from Asia in 1996-97 (in 1995-96 it was 11 per cent), while the corresponding figure for the UK during the same period was 14 per cent, Rogers said.
The UK-based company has already started investing in India. Its 70:30 lamitube venture with Indal, Courtaulds Packaging India, has already invested Rs 40 crore in the first phase of operations to set up the manufacturing unit at Goa, with Indals share being Rs 17 crore. The Goa plant is slated to produce 125 million tubes in the first year.
CPIL will invest another Rs 40 crore by mid-1998 in the project, which will enhance the production capacity to 300 million tubes. We see the Indian lamitube market growing annually at an average rate of about 15 per cent. Hence the thrust... Rogers said, adding adding, ... our aim is to corner 30 per cent of the market.