Raymond, Treves to set up JV for auto furnishing

The Rs 2000 crore textile and apparel major Raymond is eyeing the booming automobile sector to enhance its business.

The group is setting up a joint venture (JV) with Treves SA, $1.3 billion French company, to foray into the automobile furnishing sector. The JV is expected to manufacture and sell furnishings of automobiles and related products. The JV will cater to the domestic and global markets.

Pradeep Bhandari, group president, Raymond, told Business Standard, "We are foraying into automobile furnishing and have got an approval for a JV for the same." Raymond and Treves SA will form a 50:50 JV to the market, to sell and distribute knitted and woven textiles for internal furnishing of automobiles and related products.

Established in 1836, Treves SA is a leading French company with the presence in the about 20 countries. The company is engaged in automotive parts and components, seat parts, textiles, fabrics and cloth.

The company has entered into a marketing and technical know-how JV to market automobile upholstery, added Raymond spokesperson.

Initially, the company's existing fabric manufacturing capacities will cater to the automobile industry requirements. Currently, Raymond has installed capacities of 2.8 million (28 lakh) metres of wool and blended wool fabrics, which the company plans to scale to 3 million (30 lakh) metres by April.

The company has three manufacturing units at Maharashtra, Gujarat and Madhya Pradesh.

The Indian automobile sector is growing at around 18-20 per cent with passenger vehicles registering close to 25 per cent growth. In the current financial, more than 1.2 million passenger cars were sold in India. Moreover, used car sales are expected to account for about 1.8 million unit sales this financial. "The market for upholstery is large in both the car manufacturing and the used car segment," said a Mumbai-based analyst.

As a part of its expansion strategy, Raymond intends to enter into strategic partnerships with leading international players to enter into the new product categories. Raymond posted 25.60 per cent increase in the net profits for the quarter ended December 2006.

The company's textile division grew 12 per cent. In the last quarter, the company had entered into 50:50 JV with an Italian company, Grotto, for retailing of premium casual wear and accessories under the GAS brand. The company is increasing its exclusive branded outlets in the country and plans to expand its retail presence in the Middle East as well.