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Reliance Industries to sell textile business

June 25/2012

(yarnsandfibers) -- Reliance industries (RIL), India"s largest private sector company, has decided to sell its textiles business, including its iconic brand Only Vimal. The Mukesh Ambani-led company has hired NM Rothschild to manage the sale of the business, a top official directly involved with the proposed transaction said.

The textiles business, including a factory at Naroda near Ahmedabad, is expected to be sold by the end of the year. Though loss-making now, textiles constitute the cornerstone of the Ambani legend - the rags-to-riches story of the group"s founder, the late Dhirubhai Ambani. Set up in 1966 by Dhirubhai and his brother Ramniklal, the unit contributes less than Rs 2,000 crore, or just over 2 per cent, to the group"s annual turnover of Rs 85,000 crore. "We do not comment on market rumours," said a company spokesperson.

A source in the group said the group does not wish to be in any business in which the annual returns are less than 12 per cent. "We would rather invest that money in bank deposits," the source said, asking not to be identified.

The top management of the group is also not happy with the frequent labour trouble at the Naroda factory. In April this year, employees at the factory went on a strike seeking a 60 per cent rise in wages.

The Only Vimal brand is being sold to make the textiles unit more attractive for potential buyers. The brand was the first to use cricketers as brand ambassadors. The likes of former Australian captain Allan Border and legendary West Indian batsman Vivian Richards endorsed the brand.
Author:Anna Larionova
Tags:polyether, polyether, PP, tekstil.
Category:General News
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