Raymond sews up Rs 211 crore expansion plan

Plans two new units for formals, denim

Raymond, the Vijaypat Singhania group flagship, announced plans to invest Rs 211 crore on expanding its textile and apparels business. The company is setting up two new manufacturing units for formal apparels and denim wear in Bangalore.

It will also expand its existing denim manufacturing facility at Yavatmal, Maharashtra, for Rs 127 crore.

The move is seen as helping Raymond to face the challenges and opportunities that will emerge at the end of the quota regime in December 2004.

Gautam Singhania, chairman and managing director, said, "The investments are made in line with our vision to become a global player in our areas of core competence." The expansion will cater to the export market.

Pradeep Bhandari, group president, said, "The investments will be funded through internal accruals and borrowings from the government's textile upgradation fund (TUF)."

Explaining this further, Singhania said, "The capacity expansion is basically moving up the value chain from fabrics to apparels, and provide total solutions to our international customers."

Currently, exports (denim and fabric) contribute 20 per cent (about Rs 200 crore) to Raymond's turnover and its share is expected to significantly increase following the removal of export quotas. Raymond exports to Bangladesh, Turkey, Poland, South America, Europe, and Egypt.

The company will be setting up a new suit and formal trouser manufacturing facility at Bangalore with an annual capacity of 5 lakh suits and 10 lakh trousers in two phases at a total project cost of Rs 40 crore. The phase 1 of the project will be operational by March 2004 and phase 2 by September 2005.

The denim wear manufacturing facility, also at Bangalore with an annual capacity of 3 million garments at a project cost of Rs 44 crore, will be operational by December 2004.

Raymond is also expanding its denim manufacturing capacity at Yavatmal in Maharashtra from 20 million metres a year to 30 million metres a year at a total project cost of Rs 127 crore, which will go on stream by April 2005.

Raymond's other manufacturing units are located at Thane, Madhya Pradesh and Jalgaon, Maharashtra for worsted fabrics. It has also acquired a manufacturing unit at Portugal.