India : Textile firms move out as overseas ones zoom in

American textile company, Dan River including its marketing network of about $250 million, was acquired for Rs 80 crore late last month by Gujarat Heavy Chemicals (GHCL).

Along with Dan River, GHCL also acquired manufacturing units, which the US firm operated in China and Pakistan.

Several Dan River units in the US, will be shut down and outsourcing of its production will happpen from units in India , Pakistan and China, said GHCL Chairman Sanjay Dalmia.

Domestic companies look out for units in other countries to improve their margins and gain access to international markets, while West looks to relocate in Asia.

Eskay K'nit and Sabare International too, have identified locations in China and after collaborating with local companies, will start operations before March, said Navin Kumar Tayal, Chairman, Eskay.

It has plans to pump in at least Rs 40 crore in its Chinese operations alone.

Ambattur Clothing is setting up a trouser-making facility in Bahrain.

Many countries in the Gulf are negotiating with the US for zero-duty access.

Duties ranging from 9 to 32 percent in the US and European markets are paid by Indian exporters.

Hence, it is beneficial to set up units in Gulf, said D K Nair, General Secretary, Confederation of Indian Textile Manufacturers.

The Mumbai-based JBF Industries sources its raw material needs from the UAE. The Gulf-sourced raw materials come cheaper compared to Indian rates.

African Growth and Opportunity Act allows concession for exports to the US and EU, so JCT has set up a unit in Senegal.

According to industry observers, Bombay Rayon too, has drawn up plans to join group of Indian textile units abroad.

Fibre2fashion.com