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Bombay Rayon to focus on garments for higher margins
06
Aug '08
Mumbai-based Bombay Rayon Fashions, a leading textile and apparel exporter with an annual revenue of Rs13,000 million has plans to lay more emphasis on generating earnings from garments to improve its existing margins.

In an exclusive interview with Fibre2fashion, Ms Prachi Deshpande, Company Secretary, gave detailed information divulging, "the expansion plan does not involve setting up of yarn manufacturing facilities but rather includes developing yarn dyeing, weaving, processing and garment manufacturing facilities in Maharashtra with a total capital investment of Rs11,000 million.

Funds for the project have already been raised by way of equity and term Loans under TUFS. Besides, the Government of Maharashtra has sanctioned special incentive package under the MOU signed with the company."

With the planned 30 metric tons of yarn dyeing per day, 380 weaving looms, 600,000 meters per day of processing and 30 million pieces per annum of garments at various locations, Bombay Rayon aims at becoming the biggest players nationwide in exports.

Garment production has already started at two of the company's plants, one each at Osmanabad and Ichalkaranji in Maharashtra. Revenue contribution from garments is likely to increase to 58 percent while margins are likely to expand from the present 21.3 percent to 27.8 percent by financial year 2010. However, until the new facility of processing yarn is ready at Tarapur, the company would continue to outsource a major part of its cotton yarn requirement.

Additionally, the greenfield units at Tarapur, Islampur, Latur and Nanded would raise the daily fabric processing capacity of the company by 500,000 meters and garment capacity by 100,000 units and would generate some 32,000 direct jobs.

Some of the most prominent clients of Bombay Rayon include DKNY, Guess, Next and Zara. This apart, with the acquisition of Leela Scottosh Lace in July 2007, the list has expanded to admit Banana Republic, Gap and Wal-Mart.

Fibre2fashion News Desk - India

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