THE STRANGE CASE OF RAYMOND
Article Abstract:
The Rs1,225 crore woollen textiles major, Raymond, unsuccessfully diversified into many areas in the last few years. These were steel files, silicon steel, synthetic fibre, denim, air taxis, helicopter chartering, cosmetics and condoms. Some of these divisions may be sold for revival. It failed in silicon steel, as its German joint venture partner, Thyssen, which held a stake of 74 percent, withdrew from the deal without any reason. Raymond's cement division in Bilaspur is also suffering, due to high inventory. But in steel files and file-making machinery, Raymond has a market share of 50 percent and exports half of its Rs120 crore output. In the synthetic fibres sector, Raymond's net profit has suffered as it had to sell its product at Rs3-4 per kg less than the landed cost of imports due to a fall in international prices. Profits are expected to improve if the domestic prices become on par with international prices. In denim, Raymond has a tie-up with Calitri Denim Industries (CDI) of Italy in Raymond Calitri (RC). RC manufactures premium grade ring denim. It is incurring losses as the international denim price has declined from $5 per metre to $2, making it difficult for CDI to buy back 75 percent of RC's production. RC has an accumulated loss of Rs33 crore now. In woollen textiles also, Raymond is facing stiff competition from OCM, Vimal and Digjam. Plans are being made to sell international labels through the 175 outlets the company owns. In 1997-98, the fabrics sales of the division increased by 24 percent and realisation rose by 38 percent. Its net profit was Rs45.02 crore (Rs9.44 crore in 1996-97). (gsh)
Comment:
Woollen textiles major unsuccessfully diversifies into many areas in last few years
Publication Name: BusinessWorld
Subject: Business, international
ISSN:
Year: 1998
User Contributions:
Comment about this article or add new information about this topic:
THE KOREAN TSUNAMI
Article Abstract:
Korean companies Daewoo Electronics Co (DEC), Samsung and LG Electronics (LG) are forging ahead in consumer durables market. In 1997, the three companies sold over 3 lakh colour television sets(CTVs) in the 2.4 million unit market together garnering a marketshare of 12.5 percent. During 1998 they expect to increase their share to over 20 percent by selling 6 lakh CTVs in the estimated 2.8 million market. Both DEC and Samsung broke even in 1997-98 and are likely to make profit during 1998-99. LG expects to make $1 million profit as against loss of $2 million in 1997- 98. These companies have made huge investments for expansion plans. DEC will invest Rs164 crore for its second phase of expansion for manufacturing CTVs and refrigerators at Noida and Ranjangaon units during 1999. Samsung will invest Rs150 crore by 2000 AD in its Noida factory. LG is investing Rs525 crore in a new factory at Noida and will spend another Rs515 crore for further expansion in 2001 AD. The Korean companies have a strategy for every aspect of their business. For distribution, Samsung has restricted itself to a few good dealers who can give it grater loyalty and more display space. LG used housewives to act as dealers and two percent of its sales come from this housewives network in Delhi, Mumbai and Chennai. The Koreans offer feature driven products. LG offers Golden Eye TVs, which adjust screen brightness automatically. DEC offers air power technology in its washing machines, which removes dirt with air bubbles. The Koreans also keep their prices steady and do not offer exchange schemes. The three companies are now targeting rural India. LG has developed a CTV with Hindi on screen display. (tsm)
Publication Name: BusinessWorld
Subject: Business, international
ISSN:
Year: 1998
User Contributions:
Comment about this article or add new information about this topic:
- Abstracts: VIDEOCON HITS THE HINTERLAND THE PICTURE GETS SHARPER AT PHILIPS. DCM HOPS BACK
- Abstracts: CAN LML REWORK THE MAGIC? OUT TO LAUNCH. HYDERABADI HINDI
- Abstracts: ADVERTISERS' ADVERTISER DEFUSING THE POLLUTION BOMB THE HAZARDS OF ECOTRADE
- Abstracts: FADEOUT TIME FOR SHARAD TAK? WHEN IN DEBT, CHOP AND SELL. TAKING ON THE CHAINS