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India : Oswal group to begin new textile venture |
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2005-7-26
Post its split with parent Vardhman group of companies, the Rs 300-crore Oswal group is planning to set up a greenfield facility for textile weaving — under the banner Vardhman Polytex Ltd (VPL) — with an investment of Rs 150 crore. The foray will be undertaken through a joint venture company, for which VPL is in talks with a couple of European firms.
Adish Oswal, MD of Oswal group, declined to divulge names of the potential joint venture partner, but said: “We hope to finalise the JV within a month’s time."
The investment for the new facility will be raised through internal accruals and partly through FIIs, Oswal said. The facility, aimed at vertically integrating VPL’s textile business, will be based in Maharashtra, and will focus primarily on exports. Woven textile and apparel manufacturers across Western Europe and US have, over the past one year, intensified relocating plants to low-cost countries like India, Sri Lanka, China and Latin America.
Last month, for example, Raymond has announced setting up a 50:50 manufacturing joint venture with Italian woollen fabric maker Lanificio Fedora.
Apart from cheap labour, other factors that have forced firms in developed nations to shift plants to low-cost countries include manufacturing skills and potential for growth.
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