RSWM plans Europe tie-ups

RSWM Ltd, part of the $500 million LNJ Bhilwara Group and formerly known as Rajasthan Spinning, is on a hunt for joint ventures with mainland Europe-based boutique yarn firms, to move up the value chain for marketing its cotton melange yarn.

The textile major is in talks with a couple of European firms for the joint venture but is yet to finalise a deal.

"There is increasing need for smaller operations out of Europe to tie up with Indian units because of the obvious cost benefits. While we sell cotton melange yarn at a certain price, they value add and market the same yarn at 2-3 times the cost, so we want to partner them for value added yarns," said RSWM joint managing director Riju Jhunjhunwala.

Jhunjhunwala added the joint venture route was preferred right now over acquisitions as this would enable the RSWM to take advantage of the expertise of the European companies in processing and marketing the value added yarn.

He said that acquisitions would be more of a long term strategy for the company once it came to grips with the processes.

The company is also in the midst of firming up retail plans for its Mayur brand. The plans are expected to be ready in the next couple of months after which RSWM may take the exclusive outlet route on a pan-India basis.

"Mayur as a brand has stagnated and with retail currently being so hot, this is the best time to take the brand to the next level. We may go into sub-brands as well but the plans will not be on a small scale," Jhunjhunwala said.

RSWM hopes to cater to the same middle class buyer, who has traditionally been Mayur buyers but this time in the ready to wear segment.

"There are no margins in selling mid-range fabric. Only the top of the line brands or basic fabric manufacturers are making any profits, so its illogical to continue in this segment," Jhunjhunwala said.