Jayashree Textiles, a division of Grasim Industries of Aditya Birla group, is staring at a sharp fall in profits in the current fiscal owing to dumping of Chinese products in the Indian market, a company source said today.
Jayashree Textiles is a leading manufacturer of linen yarn and fabric as well as merino wool.
"We are expecting a steep fall in EBIDTA margins between 2015-16 and 2017-18, particularly after the implementation of GST (Goods and Services Tax)," the company official said.
In the last fiscal, the division's revenue stood at Rs 1,700 crore.
He said that pre-GST, Chinese players had effected a 23 per cent price drop which was making the company's products uncompetitive in the domestic market.
The source told PTI that post-GST, Chinese imports were getting a 15 per cent offset in the value chain which was taking the effective drop in selling price to 38 per cent.
"This situation has made things very difficult for us and the company and other domestic manufacturers had written to both the commerce and industry ministries to take remedial measures against cheap Chinese imports," he said.
He said that the only way was increasing productivity and the company had introduced modern and high-speed machines at its Rishra unit in West Bengal to facilitate it.
Linen Club branded stores, which sells the company's apparel and yarn, was on an expansion mode across the country.
"There are 180 Linen Club stores in the country now. We plan to add 30 to 35 stores each year. All the stores were run on franchisee basis," the source said.
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