One of the oldest textile businesses in India, Bombay Dyeing & Manufacturing Company Ltd, is selling the last of its textile manufacturing units, as competition from the unorganised sector and growing imports from Taiwan, China and Bangladesh have rendered its factory nonviable.
The Wadia group flagship’s textile processing unit at Ranjangaon in Pune is being sold on a “slump-sale basis”, or without assigning specific values to individual assets and liabilities, for Rs 230 crore to a firm called Oasis Procon Pvt Ltd.
The Ranjangaon facility was built after the Nusli Wadia-led company decided in 2005 to undertake a strategic business restructuring and shut down manufacturing activities in two prime Mumbai locations.
The Ranjangaon unit was built to cater to exports and institutional sales. However, this hasn’t worked as per plan, as the company in a notice to shareholders admitted that the manufacturing unit is no longer viable.
The sale of the unit may not have any impact on the company’s existing retail business and its brand Home & You Bombay Dyeing. But it may have some sentimental impact on those associated with the company, which was established by Nowrosjee Wadia in 1879 as a small operation of Indian spun cotton yarn dip dyed by hand.”It is a pragmatic call. It is not core to their business,” Arvind Singhal, chairman at consulting firm Technopak, who closely tracks the textile industry said. “Bombay Dyeing has struggled with the textile business for almost two decades. “The focus has clearly shifted to monetising real estate …
The value of the land on which its factories stood once is much more valuable than its textile business.”Bombay Dyeing is shutting down the textile processing plant at a time when home textile manufacturers in India have developed an edge over their Chinese and Pakistani peers.
2015-06-08
