India-based Reliance Industries Limited (RIL) and China-based Shandong Ruyi Science and Technology Group Co Ltd (Ruyi) (through its wholly owned subsidiary), have signed definitive agreements for setting up a joint venture (JV) in textiles, RIL said in a press release.
As per the agreements, RIL will transfer its existing textile business into a newly incorporated joint venture company, for which RIL will receive cash consideration.
Subject to obtaining requisite approvals, it is proposed that RIL will own a majority 51 per cent in the proposed JV, with the balance 49 per cent owned by Ruyi.
RIL’s existing textile business is the founding business of RIL and operates under the well-known brand ‘Vimal’. It has a prominent presence in the Indian textile market, especially in the worsted and synthetic suiting fabric segments.
On the other hand, Ruyi is a leading textile company in China with revenues in excess of US$ 3 billion. It has a global presence including in America, Europe, Japan, Australia, New Zealand and China.
Ruyi has a portfolio of world renowned brands such as ‘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 global brands such as ‘Aquascutum’, ‘Simple Life’, ‘Ensuite’, ‘Mano’, ‘addenda’, ‘CHARGE’, ‘next eye’, ‘D’urban’ and ‘Intermezzo’.
Ruyi also operates in India under the ‘Georgia Gullini’ brand in the worsted suiting segment of the market. 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 state-of-the-art technology and its global reach. The JV will benefit from the strength of the ‘Vimal’ and ‘Georgia Gullini’ brands and plans to introduce some of the well-known global brands of Ruyi.
Nikhil R Meswani, executive director of RIL, said, “Our joint venture with Ruyi Group 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.”