Arvind Ltd forays into apparel park

Company plans to invest Rs 150 crore

Buoyancy seems to be returning in the apparels industry with Ahmedabad-based textile conglomerate Arvind Limited foraying into setting up of an apparel park. In what would be the company's first such park, Arvind Ltd will also set up a garment manufacturing plant within the park as its anchor unit.

 

To be set through its subsidiary, Arvind Garment Park Pvt. Ltd., the apparel park will come over an area of 300 acres in the state capital Gandhinagar.  The apparel park will be commissioned by March 2015.

 

Confirming the development, Jayesh Shah, director and chief financial officer, Arvind Ltd said that the expected project cost for the apparel park will be around Rs 150 crore. On the other hand, in a bid to strengthen its own apparel manufacturing, Arvind Ltd is also planning to invest around Rs 125 crore for a garment manufacturing plant with a capacity of nine million pieces.  Expected to commission in next 12 months, the apparel manufacturing plant will garner an expected revenue of Rs 600 crore.

 

The new Arvind plant in the upcoming park is believed to be set up with an intention to consolidate on the company's growing brands and apparel retail business. In the recent third quarter results, Arvind Limited saw its brands and retail segment grew by 30% whereas its garment manufacturing grew by 35%.

 

Shah also said that about 7-8 garment convertors and manufacturers have already approached Arvind Ltd and evinced interest in setting up an apparel manufacturing unit in the upcoming apparel park in Gandhinagar.  In all, the apparel park can host an expected number of 20 units within the premises.

 

While the total investment by such units is expected to be around Rs 300 crore, the potential revenue generation capacity of the park is being estimated at about Rs 1500 crore, most of which will come through exports, Shah added.

 

Meanwhile, even as it expands it apparel manufacturing capacity by another nine million pieces, Arvind Limited has also upped the ante in its brands and retail business segment.  The group already has licensing relationships with international brands such as Gant, Arrow, Izod, Energie, US Polo Association, Elle, Cherokee, Mossimo, Geoffrey Beene, Debenhams, Nautica, Next and Hanes, among others. 

 

However, Arvind is targeting revenues of Rs 5000 crore from its brands & retail businesses alone in the next 5 years, which currently stands at around Rs 2000 crore of its total revenue.