S Kumars To Buy Reid & Taylor India

S Kumars Synfabs Ltd (SKSL), the synthetic-textiles company of S Kumars Enterprises, will take over Reid & Taylor (India), the domestic arm of Reid & Taylor, Scotland, for over Rs 230 crore. An official announcement is expected towards the month-end.

With the acquisition, Reid & Taylor (India) will be become a wholly-owned subsidiary of the Kasliwals-controlled textiles company, with which it has a marketing tie-up for fine worsted cloth.

SKSL, the first domestic company to introduce worsted cloth, has also decided to transfer the worsted fabric unit at Mysore to the new subsidiary.

The Rs 508-crore SKSL is also undertaking an expansion plan, comprising setting up a composite worsted unit at Mysore, an 100 per cent export-oriented facility, at Dewas in Madhya Pradesh and increasing its weaving capacity. It is also introducing 300 exclusive outlets across the country. The expansion, which aims at strengthening the company's brands and marketing network, has been recommended by Andersen Consulting.

 

The home textiles unit, which is being set up with an investment of Rs 520 crore, will produce high-value 100 per cent cotton "Damask" cloth. The unit has a firm tie-up with German companies for buying the entire products.

The weaving expansion programme, comprising 28 double-width sulzer machines, has been implemented to cater to the export market and also to the domestic readymade-garments segment.

The SSKL management is considering the idea of entering into the ready-to-wear and work-wear-garmenting business. It plans to electronically network its retailers and dealers to provide them an infrastructure facility for e-commerce business, according to company secretary LN Somani.

The company will soon be rechristened S Kumars Nationwide Ltd as the present name does not signify the true scope of the company's future activity, which includes building major brands for ready-to-wear garments as well as focusing on the textiles business, nationally and internationally.

SSKL posted a 73.30 per cent growth in net profit at Rs 40.43 crore in the year ending September 1999 from the previous year's Rs 23.33 crore. Sales, during the year, went up to Rs 508.94 crore, a 33 per rise over the previous year. The company increased the installed capacity of spinning to 51,524 spindles and weaving to 266.59 lakh meters.

SSKL was acquired from Standard Industries Ltd, a spinning-cum-weaving unit at Dewas.