Financial Daily from THE HINDU group of publications
Saturday, Jun 19, 2004
Alliances & Joint Ventures
Integra to fire Piramals' foray into garments
Bangalore , June 18
MORARJEE Mills, part of the fast expanding Rs 2,000-crore Ajay Piramal Group, is forging a joint venture with a team of industry professionals to tap the global market for garment exports as textile quotas unravel in January next year.
Piramals will keep the majority stake in the Bangalore-based Integra Apparels & Textiles Ltd leaving a significant minority stake in the hands of a group of five professionals led by Mr R. Krishnakumar, who previously headed the garment export business of Arvind Mills.
The move signals the business verticalisation plans of Morarjee Mills, which has till now remained a pure fabric manufacturer. The development could be a trendsetter for influential garment industry professionals aspiring to be entrepreneurs based on their international exposure in the post-quota regime, informed sources said.
When contacted, Mr P.K. Gothi, Managing Director of Ajay Piramal Group's textile business, confirmed plans to enter garment manufacturing.
"We are working towards it and will take another month to finalise details. The joint venture will focus on export market for women's wear and children's wear. We see a big potential as the quotas are phased out," he told Business Line. He did not comment on specific queries including the size of equity base of the new venture.
The joint venture will set up a new manufacturing plant in Bangalore.
Sources said the deal was in the making for the last four months and added that Mr Krishnakumar will head the venture as the Chief Executive Officer besides being on the board of the company along with Mr Harsh Piramal and Mr Gothi.
It must be mentioned that Mr Krishnakumar had quit Arvind Mills in January this year in a spate of top-level attrition in that company.
Analysts tracking the sector have viewed the development as "interesting" as Piramls have entrusted their foray into garments in the hands of a team of professionals.
"The success of the venture will depend a lot on how fast the venture can scale up its operations as the post quota scenario is going to be all about economies of scale," analysts said.
The Piramal group has diversified interests in sectors such as pharma, retail and glass.
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