Arvind OG announces entry into Nonwoven fabric manufacturing; targets Rs 100 cr revenue

Written by Express news service | Ahmedabad | Updated: Jun 1 2014, 05:00am hrs
Punit LalbhaiHaving been pioneers in tapping the technical textiles segment in India, we are well placed to take advantage: Punit Lalbhai
Arvind OG Nonwovens, a joint venture between India's largest textiles and clothing conglomerate Arvind Ltd (India) and OG Corporation (Japan), inaugurated its 300 acres manufacturing facilities near Ahmedabad on Saturday. With this venture, Arvind has added a new capability in its portfolio offering of technical textiles, in the Nonwovens space and the JV will manufacture high quality Nonwoven fabrics using Needle-punch technology for Bag house filtration, artificial leather and a variety of other applications.

Arvind holds 74 percent in this financial partnership while OG Corporation, a specialized trading company from Japan holds 26 per cent stake in the JV which has a technological alliance with Kureha Ltd, which is the leading Nonwoven fabrics manufacturer of Japan. Arvind has been aggressively growing its technical textiles business in recent years through the verticals of fire-retardant fabrics and garments, industrial fabrics and glass reinforcement of Composites, through its Advanced Materials Division (AMD).

"Having been pioneers in tapping the technical textiles segment in India, we are well placed to take advantage of this fact and become a global player. By 2017-18, we hope to reach Rs 1000 crores in Advanced Materials Division (AMD) through the four segments that include Protective textiles, Industrial fabrics, Composite application fabrics and non wovens. This is our first venture into non-wovens which is the largest segment globally in technical textiles and we hope to break even in a year's time. With this fleet of business and our textile heritage, we will look to try and build scale now. We will be looking at two product categories with this JV; namely bag house filtration and artificial leather and later plan to get into automotive interiors, industrial filters and geotextiles in the near future," said Punit S Lalbhai, Executive Director and CEO of the Advanced Materials Division at Arvind Limited.

With the size of the Indian technical textile market according to government estimates is around US $ 12 billion (Rs 70,000 crores), Arvind has currently 10 percent of the market share. The chunk of the revenue pie of Arvind is driven by its core traditional textiles and garments business, with brands and retail making up around 30 per cent and the rest is driven by other businesses and technical textiles that make up around 5 per cent out of the total Rs 6000 crore revenues clocked by Arvind Ltd.

The current capacity of the facility is around 1500 tonnes per annum and with a surge in demand of around 30,000 tonnes in the automotive sectors, the JV would be soon working on the technology to tap into this. " We have been doing business with Arvind since four generations and are therefore delighted to partner with Arvind and establish a Nonwoven fabrics manufacturing facility in India. We are also looking at getting into the automotive sector soon," said Hiroaki Machino, MD, OG Corporation India Pvt Ltd.

"We would be looking at exports in the medium term while catering to Indian market also figure in our long term plans. We have invested Rs 50 crores to get the operation started that should give us a topline of Rs 100 crores. We hope to have a turnover of Rs 300 crore with this additional business in technical textiles and see around 40 to 50 per cent growth. We hope to capture 7 to 10 per cent market share in this new space in India. Exports will be a high component for this JV as Indian markets are not mature yet, however we will follow a dual strategy with our medium term focus is exports. We will look at tapping the demand for technical fabrics of total through this division and we see it growing at 10 to 12 per cent annually," added Lalbhai.

OG Corporation sells, exports, imports and manufactures a variety of high value products in Japan and world-wide and is a fourth generation partner of Arvind, while Kureha is a wholly owned subsidiary of Toyobo Group, one of the pioneers of technical fibres and fabrics.