Bombay Dyeing, the Mumbai-based textiles company, has formulated long-term plans to turn around its traditional textile business.
Plans to invest in retail to leverage its strong brand franchise
MUMBAI: Bombay Dyeing, the Mumbai-based textiles company, has formulated long-term plans to turn around its traditional textile business, which comprises textiles and DMT (Dimethyl Terephthalate).
The Rs 1,000 crore company is aiming for the two segments to return to profits in the next one year.
To achieve the target, Bombay Dyeing has forward-integrated its DMT plant to PSF (polyester staple fibre), by setting up a 165,000 million tonne PSF plant. It is situated next to its DMT plant at Patalganga at a cost of Rs 350 crore. The project is likely to achieve optimum utilisation during this quarter.
Secondly, it has also shifted its home textile operations from Mumbai to Rajangaon near Pune, which has allowed doubling its home textile capacity to 25 million meters.
Bombay Dyeing incurred a net loss of Rs 37 crore for the quarter ended December 31, 2007 over a net profit of Rs 7 crore in the corresponding period last year. In an interview with DNA Money, Ness Wadia, joint managing director, Bombay Dyeing, said, “We are working for the growth of our textiles and DMT business as our Pune facility has started operations.”
Wadia said that retail initiatives and concept stores will grow further and the company would open 100 company-owned stores in the next 3 years.
Brokerage firm Motilal Oswal Securities analysts Siddharth Bothra, Satyam Agarwal and Mansi Trivedi said in a note to clients recently that company’s operating margins are expected to expand and textile business to record a strong turnaround post- restructuring exercise.
Bombay Dyeing also plans to invest in the retail business to leverage its strong brand franchise in the home textiles market. It has opened its own concept store in Mumbai on Tuesday.
S K Gupta, executive director, Bombay Dyeing, said, “The company is also planning to take its textile brand to the Dubai market and will sell its branded sheets to specialty retail chains.”
It has initiated major retail makeover through new-look stores with an investment of around Rs 60 crore over the next 3 years.
r_mithun@dnaindia.net
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