RSWM acquires 50% stake in Spain's Sisa

New Delhi, May 11 (UNI) The flagship company of the LNJ Bhilwara Group Rajasthan Spinning and Weaving Mills Ltd (RSWM Ltd) today said it has acquired 50 per cent equity stake in Spain's Sisa S A which will enable it to expand its footprint in the higher value added international yarn market.

The acquistion will help the company to market its superior and specialty yarn through Sisa to a broad range of high end fabric makers in Europe, thus helping it to obtain better prices for its products.

''Sisa brings with it a specialty and value-added yarn business in the international market, with a strong customer profile. It adds an established and well reputed marketing network to our operations, which will enable us to obtain better realisations for our high end yarns,'' company's Riju Jhunjhunwala Joint Managing Director said.

RSWM has been keen to expand its yarn business, especially in the value-added space and the transaction is a part of a series of initiative that the company is implementing to enhance the business operations, he added.

In addition to its own operations, Sisa will be able to leverage the company's India manufacturing facilities to procure larger yarn quantities at economical cost, which should enable it to enhance its growth.

As a joint entity, Sisa should be able to report multifold growth in revenues over the next 3-5 years.

Sisa reported revenues of about 12 million in 2006, and has a yarn capacity of 12,000 spindles, along with relatively smaller trading operations. It commands a strong brand reputation in Europe and given its superior product profile, its yarns obtain premium pricing in the market.

The existing management team of Sisa led by General Director Alex Sala Lanz will continue to look after its operations.

The acquisition comes at attractive valuations and is not likely to have a major influence on RSWM balance sheet.

The investment in Sisa is being made by wholly-owned overseas subsidiary of the company.

UNI