Raymond, UCO form new global denim powerhouse in 50:50 JV
Mumbai, Aug 8 (UNI) Two global conglomerates, textile major Raymond Ltd and European denim major, UCO NV have come together to form a 50:50 joint venture company with a valuation of 200 million Euros, ''Raymond UCO Denim Private Ltd'' with executive headquarters in Belgium, the chairmen of both companies announced here today.
The new JV incorporated in India will be engaged in the business of manufacturing and marketing of specialised denim fabrics with production facilities spread across 3 continents and 4 countries with a combined fabric capacity of 80 million metres per annum.
Announcing the formation of the JV, Chairman&Managing Director of Raymond, Mr Gautam Singhania, said ''This joint venture brings together the experience and expertise of two major denim producing companies in the world.'' Replying to a question, he said the JV will be managed by a Board of Directors which will see an equal representation of three members from both sides on the board.
As per the agreement, Raymond has transferred its denim business to the JV Company, while UCO NV has transferred its stake in its denim subsidiary located in Belgium, which holds the denim companies of UC0 NV to the joint venture company.
Together, Mr Singhania said Raymond UCO Denim will move closer to its customers by increasing the flexibility of operations and servicing the global sourcing requirements of large international brands in their markets. The flexibility in manufacturing will match customer demand for design, style and finishing that are required for the fast changing fashion world, he added.
Replying to a question, director with Raymond, Mr Pradeep K.Bhandari said in the first full-year of operations the new JV will have a sales turnover of over Rs 1200 crore.
Commenting, Chairman, UCO NV, Belgium, Mr Philippe Vierick, said ''We believe that the brand equity of the individual brands (Raymond and UCO) will give the joint venture a strong position and craft an enviable place in the global denim industry.'' The JV, Mr Vierick said, will also increase width of the merchandise substantially and cater to the requirements of individual markets and assist in the diversification of the customer base of both partners. It will also benefit greatly from international standards in product design, development and manufacturing practices through the European and US facilities, he added.
The global demand for denim today is estimated at around 5.5 billion metres and in value USD 10 billion. Meanwhile, the market for jeans in India is estimated at 90 million pairs per annum. Out of this, 30 per cent is made of branded jeans.
The changing demographic landscape of Indian population is also fuelling the growth in demand for denims. As the demand for end product increases, the underlying demand for high quality denim fabric is also slated to increase.
With international product designs, development and manufacturing practices, Mr Bhandari said Raymond UCO Denim will be able to cater to the increasing demand for value added denim products.
UNI SN WD SKB1734