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Divestment Pays Off for Raymond

Soon after succeeding his father as chairman and managing director in September 2000, Gautam Singhania steered Raymond, a pioneer in the textile and men’s apparel business, through a radical consolidation process by initiating divestment of the non-core businesses — synthetics, steel and cement — to enable it to refocus on areas of competence.

Since then, Raymond, now with a workforce of over 20,000 people, has been on a fast-track, emerging as a leader in areas of core competence — textiles and readymade.

In Dubai on a brief visit, Singhania sounded quite upbeat about his business expansion plans regardless of the fallouts of the global recession on his textile exports. “Our plans for network expansion in India and the Middle East are intact. We don’t anticipate any major challenges to expansion despite the global gloom as sales of most of our readymade bands are not much affected.” Raymond has 550 outlets in India. In the Middle East, it operates 25 stores in partnership with Globe Trading.

“We want to expand further across our focus markets and make our presence more strongly felt,” he says. Raymond made its direct marketing in the Gulf 16 years ago when it opened its first outlet, albeit the brand made its Gulf debut way back in 1977. In the UAE, it runs eight showrooms, of which six are in Dubai.

Singhania believes that the 21st century would see India and China dominating the global industrial world. “In tandem with India’s growing clout, we want to make our presence felt stronger globally.”

The deepening global recession, although had impacted Raymond’s textile and fabric exports volume, an almost 25 per cent drop in Indian rupee has more than offset the shortfall in value, he says. It exports its suiting fabric to more than 50 countries, including USA, Canada, Europe, Japan and the Middle East.

Singhania feels that India’s growth in 2009 would surpass current prediction of five to six per cent. “Unlike China, India is less dependent on exports that account for less than 20 per cent of India’s gross domestic products. “We are nation with customer mind-set unlike China which has an industrial mind-set,” he argues. “Our focus will continue to be on values and quality not on volumes or quantities. A fast growing population that used to be a major growth hurdle is now India’s core strength. India will thrive on its growing middle class population and fast expanding rank of entrepreneurs.”

Today, the the $600 million Raymond is integrated across various categories like worsted suiting, denim, shirting. “We have achieved this through partnerships with companies that are the best in their business to create synergies in sourcing, manufacturing and marketing. We have entered into a joint venture with Gruppo Zambaiti, Italy’s leading manufacturer of shirting fabric. Likewise, our partnership with UCO of Belgium is a merger of equals that will create a global denim major with transcontinental,” says Singhania who has initiated a Rs2.50 billion programme envisaging capacity expansion of existing manufacturing facilities and setting up of new garment units.

Raymond Group has six textile plants and four garmenting factories in India and Europe supported by design studios and Italian designers who put together collection twice a year.

JK Files & Tools, a subsidiary of the group, also grew under Gautam’s stewardship to become, arguably the world’s largest producer of steel files with close to 90 per cent market share in India and about 35 per cent in the world.