Piramal Uk Spread Plan Comes A Cropper

Moulded luggage baron Dilip Piramal's plans of expanding to the United Kingdom has flopped as Salisbury, the retail chain he was planning to take over, has gone into liquidation after running up huge debts.

The Rs 800-crore DGP Enterprises, had earlier sought the permission of shareholders of two group companies, Blow Plast and VIP Industries, to invest up to $16 million to pick up majority equity in the UK-based retail chain.

Acquiring Salisbury would have been an ideal launching pad for group company VIP Industries' premium range of moulded luggage 'Elanza', which is meant almost entirely for exports, and other premium ranges in the UK market, and subsequently in Europe. The group recorded exports of Rs 12 crore in 1995-96 and has targeted Rs 20-crore exports for the current fiscal.

 

The group, which enjoys 65 per cent market share in the Rs 1000-crore industry, had launched three other brands during the first quarter of 1996-97 fiscal -- Sigma, Integra and Infiniti. The DGP group is the largest producer of moulded luggage in Asia and the third largest globally.

The group has laid emphasis on the export market to face competition in the domestic market. The US-based Samsonite, which has tied up with the Tainwala group, is expected to pose a major competition to the DGP group in the Indian market.

"We have fought with them in the European and other Asian countries and are confident of fighting them on an equal footing in India also," said sources at DGP.

The group's biggest advantage over Samsonite in the domestic market is its extensive retail chain comprising 5,000 dealers for luggage, 14,000 retailers for toys and another 1,000 for moulded furniture.

Group company Blow Plast, essentially a marketing outfit, markets the VIP range of moulded luggage, Leo Toys Moderna range of moulded furniture and other upmarket office furniture.

As much as 68 per cent of Blow Plast's revenue comes from marketing VIP products.

It has tie-ups with Mattel of the US for toys, Klocker of Germany and Element International Corporation for moulded furniture.

VIP Industries sells 48.5 per cent of its products to Blow Plast, 40 per cent to defense forces and exports the rest.

The company, had last year embarked upon a Rs 18-crore expansion plan and enhanced its capacity to 4.5 million pieces annually.