AV Birla group to set up new garment export co
Economic Times, India
BANGALORE: The swelling apparel exports in the post-quota world have hooked AV Birla (AVB) Group now. It has decided to set up a standalone export manufacturing company by hiving off the existing operations of the domestic branded major Madura Garments (MG).
The new 100% subsidiary, Madura Garments Exports (MGEL), will invest about Rs 120 crore in the ongoing financial year and expects a turnover of Rs 200 crore by the end of the same. AVB has projected MGEL to turn up with a topline of Rs 500/600 crore by the year ’10/11, Vikram Rao, executive director of Madura Garments, told ET
MG’s export business ended FY06 with Rs 95 crore turnover. The country’s largest apparel export entity, Gokaldas Exports, currently has a turnover in the vicinity of Rs 850 crore. A host of global brands have made Bangalore the hub for its apparel sourcing activities over the past 18 to 24 months.
“We have board approval to invest in a new shirt and trouser plant near Bangalore, which will attract about Rs 45 crore. We will focus on our core strengths — formal shirt, casual shirts, performance trousers & formal trousers.
We could look at womenswear at a later date,†Mr Rao added. The new company, headed by Partho Kar as COO, is expected to build on MG’s current list of 20 export clients, including six to seven big accounts.
MGEL, Mr Rao said, would develop a production capacity of nearly 18m garments by ’10. It could look for satellite plants in China and Bangladesh, besides a strong base in India. The export company’s road map also includes setting up merchandise and marketing teams in trade blocs across the world and a design centre in Europe.
“The (third party) export business presents a big opportunity for us,†Mr Rao said. He added that the export company would look for synergistic opportunities with other AVB entities like Grasim. “We could look at synergies with Grasim’s fabric base wherever possible. But we will not force it on our clients,†he added.
