Financial Daily from THE HINDU group of publications
Saturday, Dec 21, 2002
Mergers & Acquisitions
Renfro buys out Intersocks' 49 pc in Karnik Hurwits EOU name changed to Renfro India
PUNE, Dec. 20
RENFRO Corporation, manufacturers of socks with a turnover of $300 million, has signed a partnership deal with Karnik Hurwits Intersocks Private Ltd to foray into the Indian market.
Renfro Corporation has acquired 49 per cent equity stake from Intersocks SPA in Karnik Hurwits Intersocks and the company has been renamed Renfro India Private Ltd.
Talking to Business Line, Mr Rohit Pal, Chief Executive Officer, Renfro India, said the 100 per cent export oriented unit (EOU) which has its manufacturing facility in Sanaswadi near Pune would act as the manufacturing centre for the US markets and product distributor for the European market. He noted that the company would also be looking at the domestic market.
He said to cater to the export demand and at a later stage to the domestic market, the company was setting up another facility at Ranjangaon near Pune, which would have an area of 40,000 sq.ft.
This would house the knitting, finishing, dyeing and bleaching centres and is expected to become operational by the fourth quarter of the next financial year.
The investment to the tune of $1.5 million would come from the parent company, Renfro Corporation, and would be utilised for increasing the number of knitting machines from the present 82 to 200.
Mr Pal said the current production of socks at the Sanaswadi plant was 9,000 dozens per week which was expected to be increased to 90,000 dozen per week.
"This, being a stepwise phase would however happen within 24 to 30 months,'' he said.
He noted that Renfro India would be launching `Fruit of the loom' product in the domestic market.
This would cater to the mid-high range and would be priced between Rs 55-65.
The other products which are slated to enter the domestic market include `Sketchers' and `Vasarette' at the premium end, priced between Rs 75 and Rs 95. He said Renfro India exported more than six million pairs of socks per year and was estimating to close the current financial year with a turnover of Rs 18 crore.
He added that the target for the next financial year would be close to Rs 45 crore which would be on an annualised basis.
Renfro Corporation, which manufactures more than 500 million pairs of socks per year, has eight manufacturing plants across the globe (six in the US and one each in Mexico and Honduras).
The company is looking at strengthening its European presence by setting up a sales, marketing and distribution company in the Netherlands which would be headed by Mr Rohit Pal, who would move out of the Sanaswadi plant.
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