First global denim group formed by UCO and Raymond
Source: CCPIT TEX Date: 2006-02-23
Indo-European alliance on the textile market
A deal announcing a joint venture between Raymond of India and UCO of Belgium was yesterday announced. The move is considered to be the first of its kind and will see the merger of their lucrative denim divisions. This will provide Raymond's products with a larger presence in the important European and US markets.
Raymond Limited of India and UCO of Belgium announced Wednesday the setting up of a joint venture to merge their respective denim divisions.
Setting a precedent
The new company is believed to be the first of its kind between manufacturers in the West and Asia.
Both producers have large production space and will result in a combined 80 million metre capacity with equity split equally between the two partners.
The joint venture could be the first of many others to come with rivals elsewhere in India possibly interested in making similar arrangements with Western manufacturers.
Making products known in West
The denim division merger with UCO will help Raymond gain a foothold in key European and US markets and make it easier to put their products across to buyers.
UCO's strong presence in such markets is considered by Raymond as essential in achieving this goal.
UCO has bases in both Belgium and the US and is expected to commence production in Romania this May.
Sales increase
Denim production at UCO represents around 75 per cent of the company's total sales revenue.
Its denim turnover last year stood at 104 million euros and produces top of the range denim items.
Raymond is also known for quality denim products and last year increased sales by 14 per cent with after tax profits increasing 204 per cent.
Whilst revenue from textile sales grew 10 per cent, the value of Raymond's denim output was up 40 per cent.
Raymond stretching even further
"The joint venture with UCO will give us a European face," said Raymond Group President, Pradeep Bhandari.
In an additional statement, UCO Chairman Philippe Vlerick said "We believe this strategic partnership would significantly enhance our business proposition."
The new company is hoping to profit from a better product development, product mix and a flexible supply chain.
The deal with UCO is the fourth that Raymond has concluded with a European company which also includes a joint venture with Gruppo Zambaito in Italy.
Involvement with the Italian company will see Raymond developing high-value cotton shirts.
