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Sritex to invest $100 million to enter retail industry
08
Dec '14
One of the leading textile manufacturers of Southeast Asia, Sri Rejeki Isman (Sritex) is set to invest around US$ 100 million to enter into the retail business as part of the company’s integration plan for engaging both upstream and downstream textile operations, according to Sritex president director, Iwan Setiawan Lukminto, Jakarta Post reported.

Iwan said over three years, Sritex will finance its expansion into the fashion retail industry, either by acquiring local and global brands or by designing its own products.

He added that the company would set up its own retail shops and aims to become a global supplier of apparel by 2017.

Iwan said that the retail business would be integrated with the company’s textile and garment manufacturing, which are the company’s core businesses.

To support the company’s expansion into the upstream sector, as well as to ensure the availability of raw materials, Sritex was also studying a plan to develop its own industrial forest (HTI) to cultivate eucalyptus plants, which will be processed to produce rayon fabric, Iwan said.

He said that the company expects to start planting in 2017 and was aiming to own 50,000 hectares of HTI in the next eight to ten years.

The company expects to nearly double its capital expenditures (capex) to $104 million next year. Out of the total capex to be disbursed next year, around $49 million will be used to increase the firm’s weaving capacity, $45 million to add to its dyeing and finishing capacity and the remaining $10 million for the company’s garment unit, he added.

He said the weaving division is expected to see its production capacity increase to 200 million meters of greige cloth per year in 2015 from its existing capacity of 120 million meters. Meanwhile, the dyeing and finishing division will increase its capacity to 58.5 million meters per year.

Sritex’s finance director, Allan Severino, said that Sritex aimed to book a 12 percent increase in sales next year, up from this year’s estimated sales of Rp 7.1 trillion. This year’s sales are expected to increase by around 24 percent, up from Rp 5.72 trillion last year. (GK)

Fibre2fashion News Desk - India

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