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Raymond Calitri Denim Ltd (RCDL), the denim manufacturer, will change a part of its product line. The Rs 84-crore company is in the process of changing 25 per cent of its ring denim production to gaberdine.

 

This move comes at a time when Raymond's plan of buying out its joint venture partner is still hanging fire. According to Raymond sources, Calitri in Italy is allegedly on the verge of liquidation, and it would take some time before the deal is through.

 

RCDL is a joint venture between the Singhania promoted, the Rs 1,307 crore Raymond Ltd and Calitri Denim of Italy. Raymond's has a 75 per cent stake with Calitri holding the rest.

 

 

The takeover plan was mooted in February this year. Earlier, with the demand for denim diminishing in the global markets, Calitri reneged on a 75 per cent buyback agreement.

 

The company's 10 million metre denim plant was set up in Yavatmal Maharastra to mainly produce ring denim, a technically softer fabric. It was believed that the price premium it fetched over the regular denim would make it profitable. The current capacity utilisation is 80 per cent. But in the last two years, denim prices crashed. Ring denim available at Rs 105 per metre two years ago now sells at Rs 85.