'We're looking at acquisitions'
In a world of burgeoning opportunities in the post-quota regime, Singhania has over the past five years zeroed in on the company's core strengths in textiles.
You now have a multibranded strategy in the garments business, what are the strategic imperatives in this regard?
I want to straddle the entire garment business chain by providing a wardrobe solution for men. With our acquisition of ColourPlus and our tieup with Manzoni, we are plugging all the gaps. India and China are suppliers to the world. But there is a clear division in terms of perception. The discernible difference is between volume and value. Yes, China has quantity, but believe me, we have the quality. It is as clear as chalk and cheese.
We are working towards an end objective against this backdrop. Five-six months ago we entered into a joint venture with the Gruppo Zambaiti family for high value shirtings. Then we concluded a deal for woollen fabrics with Lanificio Fedora. Fedora went to China, but chose us -- why because of what I just explained. Design is critical in the new age and India has the wherewithal and expertise in this regard. I am convinced that like ITES in the past, textiles is poised on the springboard.
Why are you so convinced that India can deliver quality now, after all made in India wasn't a very good idea till recently?
International players increasingly find it prudent to have a multi-sourcing strategy these days. SARS changed everything. Maybe that is why, foreigners are putting enormous pressure on Indian companies to ramp up capacities. In the past six months, we have invested Rs 730 crore to build an additional capacity of 20 million. We want to build a vertically and horizontally integrated enterprise.
One notices that you have deliberately segmentised your offerings -- from hi-value to ready-towear -- Manzoni, ColourPlus, Park Avenue, Raymond, Parx where are you headed?
That is why I maintain that scalability is critical at all times. We at Raymond want to create a one stop shop offering everything to everybody. More importantly, any menswear sourcing retailer should naturally come to us. In order to gain mass, we are now looking at acquisitions both at home and abroad. The world is interested in us and we aren't able to cope. Infrastructure is sues remain top of mind. Sears, JC Penny and the like want to deal with select vendors. As such size will matter because they don't want any disruption in supply. We have evolved into a solution supplier and, if to achieve lower cost we need to grow inorganically abroad, we will do it.
Your divestment programme has worked wonders, how did you achieve this, did you bring in consultants...?
I realised that we had several things which didn't fit into our portfolio. So we needed to unlock value and focus on textiles. I didn't need a consultant to tell me that I needed to exit. Every single divestiture was done by us. In fact, consultants came to us and told us that we should buy X,Y and Z. But God was kind. The speed at which we sold steel (Rs 400 crore) in 37 months, cement (Rs 785 crore) in 4 days and filament yarn (Rs 300 crore) in 24 months is truly remarkable. We raised Rs 1,600 crore, became debt free and now have liquid assets amounting to Rs 600 crore. A lot of people came to me and said $85 per tonne to Lafarge was cheap, but for me $85 per tonne changed Raymond forever.