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Reliance Industries Ltd (RIL) India and China’s Shandong Ruyi Science and Technology Group Co Ltd — the latter through its wholly owned subsidiary — have executed definitive agreements for a joint venture in textiles. According to the definitive agreements, RIL will transfer its existing textile business into a newly incorporated company, for which RIL will receive cash consideration. RIL will own a majority 51% in the proposed JV, while the rest will be owned by Ruyi. The proposed transaction is subject to requisite approvals.
RIL’s existing textile business is its founding business and operates under the well-known Vimal brand. It has a prominent presence in the Indian textile market, especially in the worsted and synthetic suiting fabric segments.
Ruyi, a leading textile company in China with revenues in excess of $3 billion, has a global presence — in America, Europe, Japan, Australia and New Zealand, besides China. It has a portfolio of renowned brands like Taylor & Lodge, Harris Tweed, Royal Ruyi China, Nogara Italy and Indios Italy.
The RuYi group includes Renown Inc (founded in 1902 and listed on the Tokyo Stock Exchange), which owns or operates several leading brands like Aquascutum, Simple Life, Ensuite, Mano, addenda, CHARGE, next eye, D’urban and Intermezzo. It also operates in India under the Georgia Gullini brand in the worsted suiting segment. This business operation and activities would get realigned to strengthen the JV.
The JV will build on RIL’s existing textile business and wide distribution network in India, as well as Ruyi’s technology and global reach. It will benefit from the strength of the Vimal and Georgia Gullini brands and plans to introduce some of Ruyi’s well-known brands.
Nikhil R Meswani, RIL’s executive director, said: “Our JV with Ruyi will help Reliance reposition its textile business on a high growth path. Our partner’s deep commitment and global reach in textile business will enable this JV to harness the growth potential of the Indian market and emerge as a global textile player”.
Qiu Yafu, chairman, Shandong Ruyi Group, said: “With closer economic relations between China and India and the Ruyi group’s expanding global presence in the textile sector, we see our JV with Reliance as a significant event for the group. We truly believe in the bright future of this JV”.
