A free rein for Raymond

With the quota regime coming to an end next year, Indian textile companies like Raymond are readying themselves to grab the export opportunity in major markets like Europe and the US.

Raymond is scaling up its production capacity and has also been roping in new clients over the past several months. Last week the company inaugurated a new unit in Bangalore with an annual manufacturing capacity of 1.3 million trousers and 0.5 million suits.

Interestingly, the company has already found buyers for production from the trousers facility and it is already sold out till March 2005. Similarly, the company has got several Japanese buyers who are aiming to de-risk sourcing from China. The Japanese buyers have committed for one-third of Raymond''s suits capacity with the potential to increase sourcing five-fold. This retailer intends to increase sourcing from India by five-fold as part of a strategy to reduce its current 95 per cent dependence on Chinese supplies.

The company''s three-million jeans facility is also scheduled to commence production from January 2005 and holds potential for a sell-out prior to commissioning. These two facilities will add 11 to 16 per cent to Raymond''s turnover.

According to an analyst from a leading firm, "Raymond is in the forefront of seizing the textile export opportunity post-quota dismantling from 2005." It has shed its earlier image of being slow at capitalising on opportunities, he added.

The total cost of the facility is around Rs40 crore and Raymond expects a contribution of Rs1.5 to two billion in turnover.