Remember the iconic brand, “Only Vimal”, which became a household name during the 1980s and resonated as a jingle for years? Reliance Industries Ltd (RIL) chairman Mukesh Ambani is now planning to expand his textiles business.
The Rs 4.5 lakh-crore RIL, India’s largest private sector company, on Tuesday announced the sale of a 49% stake in its textiles business that includes the iconic brand “Only Vimal” to the $3 billion (Rs 18,000-crore) Ruyi, a leading Chinese textiles company, for an undisclosed amouunt. RIL will retain a majority stake of 51% in the textiles business.
“RIL and Shandong Ruyi Science and Technology Group Co. Ltd, China (Ruyi) through its wholly owned subsidiary, have executed definitive agreements for a joint venture in textiles and as per which RIL will transfer its existing textile business into a newly incorporated company (joint venture), for which RIL will receive cash consideration… The proposed transaction is subject to obtaining requisite approvals,” RIL said in a statement.
Ruyi Group operates in India under the “Georgia Gullini” brand in the worsted suitings segment. “The JV will benefit from the strength of the ‘Vimal’ and ‘Georgia Gullini’ brands and plans to introduce some of the well-known global brands of Ruyi,” the statement said.
“Our JV with Ruyi Group will help Reliance reposition its textiles business on a high-growth path. Our partner’s deep commitment and global reach in the textiles business will enable this JV to harness the growth potential of the Indian market and emerge as a global player,” said Nikhil R. Meswani, executive director, RIL.
RIL’s textiles business includes a factory at Naroda near Ahmedabad and was the first industrial business of the undivided Reliance Industries under the group’s founder and Mukesh and Anil Ambani’s father late Dhirubhai Ambani.
While RIL’s annual report does not disclose income or other financials of its textiles business, sources said the business does not contribute a significant share in RIL’s turnover.
Ruyi, with revenues in excess of $3 billion, has a global presence in the US, Europe, Japan, Australia, New Zealand and China. Ruyi has a portfolio of world renowned brands such as “Taylor & Lodge”, “Harris Tweed”, “Royal Ruyi China”, “Nogara Italy” and “Indios Italy”.
“With closer economic relations between China and India and Shandong Ruyi Group’s expanding global presence, we see our joint venture with Reliance as a significant event”, said Qiu Yafu, chairman, Shandong Ruyi Group.