CHAPTER - III PROFILE OF THE STUDY UNITS

ARAVIND MILLS

The Aravind Mills was set up with the pioneering effort of the Lalbhai brothers in 1931. With the best of technology and business acumen, Aravind has become a true Indian multinational, having chosen to invest strategically, where demand has been high and quality required has been superlative. Today, The Aravind Mills Limited is the flagship company of Rs.20 billion (US$ 500 million) Lalbhai Group. Aravind Mills has set the pace for changing global customer demands for textiles and has focused its attention on select core products. Such a focus has enabled the company to play a dominant role in the global textile arena. With its presence across the textile value chain, the company endeavors to be a one-stop shop for leading garment brands. Forevision and Technology has brought Aravind to be one of the top three producers of Denim in the world, and on its way becoming the Global Textile Conglomerate. Aravind is already making its presence felt in Shirting‟s, Knits and Khakhis fabrics apart from being all set to create ripples in the ready to wear Garments world over. The Evolution 1930 was a year the world suffered a traumatic depression. Companies across the globe began closing down. In UK and in India the textile industry in particular was in trouble. At about this time, Mahatma Gandhi championed the Swadeshi Movement and at his call, people from all India began boycotting fine and superfine fabrics, which had so far been imported from England. In the midst of this depression one family saw opportunity. The Lalbhais reasoned that the demand for fine and superfine fabrics still existed. And any Indian company that met this demand would surely prosper. The three brothers, Kasturbhai, Narottambhai and Chimanbhai decided to put up a mill to produce this superfine

45 fabric. Next they looked around for state-of-the-art machinery that could produce such high quality fabric. Their search ended in England. The best technology of that time was acquired at a most attractive price. And a company called Aravind Mills was born. Aravind Mills started with a share capital of Rs 2,525,000 ($55,000) in the year 1931. With the aim of manufacturing the high-end superfine fabrics Aravind invested in very sophisticated technology. With 52,560 ring spindles, 2552 doubling spindles and 1122 looms it was one of the few companies in those days to start along with spinning and weaving facilities in addition to full-fledged facilities for dyeing, bleaching, finishing and mercerizing. The sales in the year 1934, three years after establishment were Rs.45.76 lakhs and profits were Rs.2.82 lakhs. Steadily producing high quality fabrics, year after year, Aravind took its place amongst the foremost textile units in the country. In the mid 1980‟s the textile industry faced another major crisis. With the power loom churning out vast quantities of inexpensive fabric, many large composite mills lost their markets, and were on the verge of closure. Yet that period saw Aravind at its highest level of profitability. There could be no better time, concluded the Management, for a rethink on strategy. The Aravind management coined a new word for it new strategy – Renovision. It simply meant a new way of looking at issues, of seeing more than the obvious and that became the corporate philosophy. The national focus paved way for international focus and Aravind‟s markets shifted from domestic to global, a market that expected and accepted only quality goods. An in-depth analysis of the world textile market proved an eye opener. People the world over were shifting from synthetic to natural fabrics. Cottons were the largest growing segments. But where conventional wisdom pointed to popular priced segments, Renovision pointed to high quality premium niches. Thus in 1987-88 Aravind entered the export market for two sections. Denim for leisure and fashion wear and high quality fabric for cotton shirting‟s and trousers. By 1991 Aravind reached 1600 million meters of Denim per year and it was the third largest producer of denim in the world.

46 In 1997 Aravind set up a state-of-the-art shirting, gabardine and knits facility, the largest of its kind in India, at Santej. With Aravind‟s concern for environment a most modern affluent treatment facility with zero affluent discharge capability was also established. Year 2005 is a watershed year for textiles. With the mulitifiber agreement getting phased out and the disbanding of quotas, international textile trade is poised for a quantum leap. In the domestic market too, the rationalizing of the cenvat chain and the growth of the organized retail industry is likely to make textiles and apparel see an explosive growth. Aravind has carved out an aggressive strategy to verticalize its current operations by setting up world-scale garmenting facilities and offering a one-stop shop service, of offering garment packages, to its international and domestic customers. With the Indian economy poised for rapid growth, Aravind brands with its international licenses of Lee, Wrangler, Arrow and Tommy Hilfiger and its own domestic brands of Flying Machine, Newport, Excalibur and Ruf & Tuf, is setting it‟s vision on becoming the largest apparel brands company in India. PHILOSOPHY WE BELIEVE In people and their unlimited potential. In content and focus in problem solving. In teams for effective performance. In intellect & its power. WE ENDEAVOUR To select, train and coach people to obtain higher responsibilities. To nurture talent to build leaders for tomorrow's corporation. To reward, celebrate and activate all intellectual business contributions. WE DREAM Of excellence in all endeavours. Of mutual benefit and prosperity. Of making the world a better place to live in. We Make Things Happen. At Aravind, it is firmly believed that a successful company must play an active role in the development of the society from which it springs. Besides pursuing its business goals, it should also be responsible corporate citizen. It is

47 because of these beliefs that Aravind is always on the forefront of extending a helping hand for the needy, downtrodden and for the society at large. Aravind has always been actively involved in the educational institution, hospitals and research institutions of , its hometown. It co-pioneered the world renowned Indian Institute of Management, Ahmedabad (IIMA), and helped set up the Ahmedabad Textile Industry Research Association (ATIRA), and The Textile Training Center to develop and enhance the skills of textile workers. The Lalbhais – a Historical Perspective The Lalbhais are descendents of Seth Shantidas (c.1590-1659), a famous jeweler, financier and businessman of the seventeenth century. Shantidas is known to have even financed the mighty moghul empire and was the first to be conferred with the title of Nagarsheth. Khushalchand (1680-1748) grandson of Shantidas had saved the city of Ahmedabad from the marauding Maratha army in 1725 by paying a ransom of Rs. 5 Lakh on behalf of the whole city. The current surname is derived from the great grandson of Himabhai (1785-1858) son of Khushalchand. Lalbhai was born around the time when the first textile factory in the city went into production. The first manufacturing company of the Lalbhai family Saraspur Manufacturing Company was established in 1897 which was into producing cotton yarn. During the intensifying Swadeshi movement the second company Raipur Mills was established in 1905. Due to untimely death Lalbhai Dalpatbhai the reins of his businesses were handed over to his young sons including a seventeen year old Kasturbhai Lalbhai. Kasturbhai is widely acknowledged to be the father of modern Indian textile industry. Kasturbhai started the first large scale textile mill under the name of Asoka Mills in 1920 with a capital of Rs.12 Lakh at a time when the largest mills in the region were built with not more than Rs. 5 Lakh. 1930-31 saw the resurgence of second Swadeshi movement coinciding with the great depression. While different entrepreneurs reacted to the situation differently Kasturbhai saw this as the decade of prosperity and growth and established the flagship Aravind Limited in 1931 with an authorized capital of Rs. 25.25 Lakh.

48 Kasturbhai had also floated mills for families of his three sisters under the name of Aruna Mills in 1928 and Nutan Mills in 1931. With the expansion Kasturbhai came to occupy the position of the biggest textile magnate in the country. Few groups could claim to have made such great strides during one of the worst periods in India‟s industrial history. After continuously successful period of four decades in the pre-independence era, the group entered into other fields such as dyes, pharmaceuticals, chemicals, etc. The first diversification started in 1939 with Anil Starch Limited. Products Limited was established in 1952 for manufacturing textile and other dyestuff. In the same campus as Atul existed the joint ventures with Ciba-Geigy called Cibatul, with American Cynamid called Cynamid of India and with ICI of UK called Atic Industries and as the time progressed the JV partners separated amicably and these companies exist in India today as full representatives of these global giants. The group took over the then sick company Ahmedabad Laxmi Cotton Mills Co. Ltd. and merged with Aravind Limited and the unit was renamed as Ankur Textiles. The unit currently under Aravind Products Limited is today the country largest organized player in the voiles market. The group also invested in Anup Engineering Limited engaged in fabrication and set up Amol Dicalite in collaboration with General Refractories Limited, U.S.A for manufacturing filter aids and perlite products. Apart from the field of business the Lalbhais over generations have contributed to education, social and religious causes. Lalbhais contribution to education starting from Gujarat Vernacular Society in late 1800‟s to formation of Ahmedabad Education Society, Physical Research Laboratory, ATIRA and the famed IIM Ahmedabad are just to name a few. Today Shrenik Lalbhai heads the Sheth involved in propagating and maintaining Jain temples in western India a post he inherited from Kasturbhai Lalbhai. Mr. Sanjay Lalbhai is genuinely committed to the societal causes and is spearheading these initiatives under the aegis of Sharda trust. One of the important factors which built up the Group was the close relationship of mutual trust between the three brothers – Chimanbhai, Kasturbhai

49 and Narottambhai. Despite Kasturbhai having emerged as the patriarch of the group, there was satisfactory distribution of property and managing powers with the members of the family. The management of the companies was distributed between family members who consulted each other under the leader Kasturbhai. Siddharthbhai the eldest son of Kasturbhai managed Atul Products, while his younger son Shrenikbhai looked after the management of Anil Starch. Chimanbhai‟s family branch managed Raipur and Saraspur Mills while Narottambhai‟s younger son, Niranjanbhai devoted his time in technical function of Aravind Limited and his elder son Aravindbhai managed both, Aravind and Asoka Mills. After Kasturbhai‟s death, Aravindbhai son of his brother Narottambhai assumed the leadership of the Group. The process of expansion and the initiative of restructuring of the Group however was led by the third generation of Lalbhais under Sanjay and Sunil, grandsons of legendary Kasturbhai Lalbhai. The major contribution of Sanjay Lalbhai has been that of overall transformation of the Group culture by induction of highly skilled and qualified professional managers. Today Sanjay Lalbhai is the Chairman of the Group and leads Aravind Limited and Sunil Lalbhai managing the dyes and chemicals business under the Atul Products Limited banner. The current estimated group turnover is over Rs. 2500 Crore. The Narottambhai Lalbhai Rural Development Fund and The Lalbhai Group Rural Development Fund where founded to undertake special programs for the economically deprived. It also assists the nearby villages, through nutritional programs, food camps and the harnessing of solar energy. The Narottambhai Lalbhai Rural Development Fund and The Lalbhai Group Rural Development Fund where founded to undertake special programs for the economically deprived. It also assists the nearby villages, through nutritional programs, food camps and the harnessing of solar energy. SHARDA Trust At Aravind, we believe in repaying to society in our own little way through a social arm of ours – Sharda Trust

50 Established in 1995 with the support of Aravind Mills, “Strategic Help Alliance for Relief to Distressed Areas” (SHARDA), its purpose is to help the urban poor in improving their quality of life. The Trust has based its strategy on the premise that a family has five basic needs, listed below and ranked according to their priority. These are:  Basic physical infrastructure for clean potable water at the door steps in adequate quantity at convenient hours, individual toilets and hygienic surroundings.  Primary health-care.  Access to high quality secondary and tertiary health care.  Reading, writing and arithmetic skills (3Rs) for all.  Skill and ability to compete in today‟s environment. SHARDA Trust joined hands with the Ahmedabad Municipal Corporation to upgrade the physical environment and living conditions in a slum pocket called “Sanjay Nagar.” The Municipal Corporation assigned the task of implementation to this Trust, which completed the project within time and budget. So innovative was the Trust's approach, that on 7 August 1998, the United Nations Centre for Human Settlement (UNCHS) included the Sanjay Nagar project in its "100 Best Practices Global List". Subsequently, the Trust has taken several initiatives like providing secondary and tertiary healthcare to the urban poor through networking with prominent hospitals in the city. About eight hundred patients have benefited and approximately Rs.13 lakh have been spent on this activity. The Trust collaborated with the National Institute of Fashion Technology (NIFT), Gandhinagar, and helped the urban poor to train in the area of sewing machine operation. The Trust also organized placement activity with the local garment manufacturers and has so far trained and placed over 300 persons in Ahmedabad. Spoken English and basic mathematics for the youth belonging to poor families and providing them with computer skills is the other activity that the Trust

51 has undertaken in collaboration with the Chandraprasad Desai Memorial Foundation. The Trust is poised for a rapid expansion in all its projects. Aravind & Environment A) Environmental Policy Aravind Mills commits itself to continually improve our environmental management. It strives to go beyond the requirements of the applicable environmental laws & other regulations through:  Optimizing usage of cotton, energy, chemicals & water.  Adopting preventive strategies to reduce the generation of effluents, waste & air emissions.  Maximizing the recycling of inevitable wastes.  Encouraging suppliers & buyers to become environmentally responsible.  Maintaining a safe working environment.  Increasing the green cover.  Training employees on environmental issues. B) Effluent Treatment Facilities All the production / processing units are provided with adequate wastewater / water treatment facilities, to meet the requirements of regulating authorities as well as our reputed customers like Levis, Nike etc. Aravind Mills at Santej has one of the largest effluent recycle plants in Asia with recycling capacity 10,500 m3/day. The latest & best of the technologies available in water / wastewater treatments can be seen in operation in this plant. The Aravind International (division) has Effluent recycling facilities comprising Chemical, Biological & tertiary treatment and it is of 800-m3/day capacity. The plant also has ISO 9000 & ISO 14000 certification. Aravind Mills @ the main site at Naroda also possess chemical, biological treatment facilities to treat 10000 m3/day of effluents to meet the pollution control board norms. Ankur Mills (division) has Effluent treatment plant of 1600-m3/day capacity with chemical & biological treatment facility to achieve the pollution board norms. Aravind Mills (Garment exports division) is setting up a new garment unit at Mysore road, Bangalore, along with Effluent treatment plant of

52 1450 m3 /day capacity. This plant also possesses chemical, biological & tertiary treatment facilities to achieve the State Pollution Control Board norms. The uniqueness of this plant is – all it‟s process water requirements will be attained through recycled sewage water of Bangalore City. C) Air pollution Control Aravind Mills has switched from liquid fuel to Natural gas for all their heating & steam requirements in order to avoid the air pollution. D) Solid waste Management All the units believe in waste minimization measures. All the ETP plants are provided with adequate sludge Dewatering facilities. Units at Santej, Naroda, Aravind International & the upcoming Bangalore unit are provided with Decanter Centrifuges for sludge de-watering. De-watered sludge is dried in solar evaporation pans for further volume reduction. Waste oil generated in all the units is recycled. Polythene liners, Discarded containers are disposed off to the respective buyers. E) Afforestation & Rain water Harvesting Units at Khatrej & Santej have very good afforestation & green belts. The Santej unit has more than 1 lakh trees & other shrubbery. Plants like Jetropha (seeds used for Biodiesel generation) are grown extensively. ETP treated water is used for this plantation so as to minimize raw water consumption. Beautiful lawns with Fountains are part of the landscape. At the Santej unit ground water recharging facility is also developed where in yearly about 40 MLD rain water is recharged in to ground water table. Two recharge ponds with a capacity of about 4000 m3 are made & Rainwater during the monsoon is collected in these ponds & recharged in to Ground water table. Acquisitions for Growth 1931 Aravind Limited is set up by three brothers Kasturbhai, Narottambhai and Chimanbhai Lalbhai with a share capital of Rs.2,525,000 (US$55,000) backed by state-of-the-art technology, with the aim to produce high-end superfine fabric.

53 1934 With sales reaching Rs.45.76 Lakhs, and a profit of almost Rs.3 Lakhs, Aravind establishes itself amongst the foremost textile units in the country. 1986  An uninterrupted record of not missing out on paying dividend to its shareholders.  An established leader in fine & superfine cotton fabrics for Indian market. 1986 Renovision: First company to bring globally accepted fabrics Denim, yarn dyed shirting fabrics & wrinkle free gaberdines to India. 1987  The largest zero discharge green ETP facility in India.  Commitment to greener world 1987  First company to bring International shirt brand “Arrow” to India  First company to start dedicated “retail” outlets for Arrow brand.  Awarded various awards for Highest exports and ISO 1989  Largest Denim & shirting in South Asia.  3rd Largest senior capacity in the world 1997 First Indian company to verticalise the cotton textile business from cotton fields to apparel retailing. 1997-1998 First company to introduce ERP SAP business solution 2008 First company to launch a pan Indian apparel outlet stores “Megamart” Largest portfolio of International brands: Lee, Wrangler, Nautica, Jansport, Kipling, Tommy, Arrow, US Polo, Izod, Pierre Cardin, Palm Beach, Cherokee, hart Schaffner Marx

54 Brand Portfolio The extensive brand portfolio includes marques across varied demographics and geographics. A partial list includes: Flying Machineb Excalibur Newport University Ruf&Tuf Arrow Megamart HartSchaff nermarxIzod GantPierrecardin USPA Sanabelt Cherokee RAYMOND TEXTILES The Raymond Group was incorporated in 1925; and within a span of a few years, transformed from being an Indian textile major to being a global conglomerate. Raymond is the leading, integrated producer of worsted suiting fabric in the world, with a capacity of producing 33 million meters of wool & wool-blended fabrics. A pioneer in the textile and men‟s apparel business, in India, with a turnover of over USD 600 million, the Raymond Group is horizontally and vertically integrated and offers end-to end solutions for fabrics and garmenting. The Group has six, state-of -the art textile plants and four garmenting factories, in India and Europe, supported by world-class design studios in India and Italy. Raymond has always focused on innovation and technological up gradation, that has yielded path breaking fabric solutions to customers around the world. From pure wool to wool blended with exotic fibers like Cashmere, Mohair or Angora and Casein or the ultimate in fine pure wool – Super 230s crafted out of 11.8 micron wool, Raymond has always provided customers with world-class products. The company exports its suiting fabric to more than 55 countries, including USA, Canada, Europe, Japan and the Middle East. The Raymond Group has already marked its presence in the global arena with partnerships with leading European manufacturers of carded woollens, fine shirting fabrics and specialty denim. In addition, the Group has business interests in readymade garments, designer wear, cosmetics & toiletries, engineering files and tools, prophylactics and air charter operations. Moving up the value chain – One stop Shop Fabric Worsted  Pure wool, Polywool blended fabric  33 million metres

55  3 integrated plants in India Denim  Specialty and colour denim  80 million metres  Manufacturing in 3 continents – US, Europe and Asia  JV with UCO NV Shirting  100% fine cotton and linen fabric  10.5 million metres  JV with Gruppo Zambaiti Carded Woollen  Outerwear fabric,Carded woolen shawls, Blankets  2.5 million metres  JV with Lanificio Fedora Garmenting Tailored Clothing  Fine tailored formal suits, jackets and trousers  450,000 suits, jackets and 2.4 million trousers Annually Jeans wear  High fashion jeans wear  Capacity of 3 million pairs of jeans per year Dress Shirts  Formal Dress Shirts  Capacity of 3000 shirts per day  Technical collaboration with Flex, Japan Our Design Studio in the fashion capital of the world –Milan, Italy in partnership with Gruppo Zambaiti provides our customers with cutting edge design and style. The studio has the finest designers for textiles, denim, jeans wear and fine tailoring clothing. Worsted Suiting Raymond, with an installed capacity of 33 million meters of wool & wool-blended fabrics, is the leading integrated producer of worsted suiting fabric in the world. It has four plants located in the states of Maharashtra, Gujarat and Madhya Pradesh. The company exports its suiting fabric to more than 55 countries including USA, Canada, Europe, Japan and the Middle East. Raymond, an innovator in the Indian textile industry, has developed a heritage of in-house skills for research & development. This has resulted in path-breaking developments of new products, which are today the corner stones of the worsted

56 suiting industry in India. The Group has mastered the craft of producing suiting using, wool from 80s to 230s count, blends with superfine polyester and other specialty fibers, like Cashmere, Angora, Alpaca, Silk, Linen etc. Denim Raymond has entered into a 50:50 JV with UCO NV of Belgium, a leading manufacturer of specialty denim to form a global denim company that combines the denim businesses of Raymond and UCO. The JV Company, Raymond UCO Denim, having it‟s company executive headquarters in Belgium, is manufacturing and marketing, specialty denim fabrics. The JV has a combined capacity of 80 million meters, per annum, with manufacturing facilities spread across three continents – the US, Europe and Asia, as well as a vast global marketing network. Shirting Raymond in partnership with Gruppo Zambaiti, one of the top three Italian high fashion cotton textile majors in the world, has set up a Greenfield facility for the manufacture of fine cotton shirting fabric. The joint venture company, Raymond Zambaiti Ltd, combines Raymond‟s expertise in textile business, low cost production, technology and distribution with Italian strengths of creativity, style, production know-how, quality finishing and lead times. Fabric The product range includes a wide range of fabrics and finishing, including, cotton apparel fabrics and high-end cotton suiting fabric, produced at the newly set up state-of-the-art vertically integrated plant in India. This facility caters to the international markets at the middle to the upper end brands and offers custom designed shirting products to the discerning international customers, which includes leading brands and retailers. Tailored Clothing Situated 40 kms from Bangalore is Silverspark, our facility that turns out world class, suits, jackets and trousers. This modern plant spread over 2000 sq ft built up area has the capacity to produce 450,000 suits, jackets and 2.4 million trousers annually, a significant addition to our existing capacities at Thane near Mumbai. Set up at an investment of US$ 10 million this plant boasts of modern

57 manufacturing facilities on par with the best on the world. „Siro Set‟ is another specialty that the plant has to offer. The factory is equipped with computerized presses in line and drying chambers to ensure consistency in the product. This technology developed and perfected in Japan is designed to impart a permanent finish to jacket seams and tailored crease on trousers made from pure wool fabrics. The combination of world-class machines and work environment maximize productivity, quality and worker safety. Jeanswear A forward integration to Raymond‟s specialty Denim plant is EverBlue, a top of the line manufacturing facility for jeanswear, near Bangalore. This facility has a capacity to turn out 3 million garments per annum with integrated garment design, sewing and washing operations. The plant boasts a high degree of automation right from computerized Gerber spreader and cutter to laser patterning and finishing. The stitching facility incorporates several automatic sewing workstations for consistency of work execution, sate of the art over locking and zipper attachments. The finishing unit consists of scraping spray booths, sand blasting and laser patterning to create special effects on jeans wear. An in house CPC controlled laundry is the best such facility in India for washing and dyeing obtained from Europe. This ensures a wide variety of finishes to meet global tastes. Manufacturing is supported by an in house design studio and sample unit to create new styles and samples. Dedicated sample washing machines ensure quick turnaround of samples. Dress Shirts A spanking new unit - Celebrations has been set up in the technical collaboration with Flex, one of the largest dress shirt manufacturers in Japan. With 100,000 sq ft of built up space, it incorporates the latest factory design principles for employee comfort and productivity. The current production capacity is over 1 - milllion shirts per year. Specialized machinery imported from renowned manufacturers in from USA, Germany and Japan comprise of automated spreading

58 and cutting with an inbuilt system for matching checks and stripes. The layout of the manufacturing line has sufficient flexibility to adapt to smaller runs and style changes. This flexibility permits manufacture of both fused and non-fused collars and cuffs as per customer requirements. Shirts made in this plant have been well appreciated by many as being on par with the best in the world. The Raymond Group today is poised to become a global player, integrated across various categories like worsted suiting, denim, shirting etc. The Group has achieved this through partnerships with companies that are the best in the world in their business. Raymond has entered into a JV with Gruppo Zambaiti, Italy‟s leading manufacturer of shirting fabric, Lanificio Fedora, one of the largest manufacturers of carded woolen fabric in the world. Our JV with UCO is a merger of equals that will create a global denim major with transcontinental manufacturing in US, Europe and Asia along with a combined capacity of 80 million metres. This JV with UCO will create synergies in sourcing, manufacturing and marketing. All our JVs have resulted in a unique combination of synergies in manufacturing, marketing, technology, sourcing etc. and will reap tremendous mutual benefits in the years to come. Raymond Ltd. has announced a 50:50 joint venture with Grotto S.p.A, one of the most important Italian fashion companies. The joint venture recently launched the highly successful 'GAS' brand in India. With a total investment of approximately Rs. 500 million, this joint venture brings together Grotto S.p.A's proven expertise in design and managing a successful brand and Raymond Ltd's expertise in apparel brand building and retailing and its vast distribution network to give Indian consumers a new fashion experience. This 50:50 joint venture company will characterize a distinct identity in the youth fashion casual apparel category in India. Raymond Group‟s products are retailed through „The Raymond Shop‟ (TRS) - the most celebrated retail chain of its kind in the Indian sub-continent. The Raymond distribution network comprises of more than 20,000 Multi Brand Outlets and over 400 exclusive retail outlets in more than 170 cities which includes „The Raymond Shop‟ which retails Raymond Fabric and menswear brands (Park

59 Avenue, Parx, Manzoni and ColorPlus) and exclusive brand outlets for Park Avenue, Manzoni, Colorplus, Parx and Zapp!. The Raymond Shop also has 27 outlets overseas in the Middle East, Sri Lanka and Bangladesh. The Raymond Group has in its portfolio some of the most respected brands in India - Raymond as well as leading menswear brands - Park Avenue, Parx, Manzoni and ColorPlus. Recently, Raymond, the flagship brand from India‟s leading textile & apparel major Raymond Ltd. took the craftsmanship of garment making and customer convenience to new echelons by launching „Raymond Finely Crafted Garments‟ (FCG). Raymond entered into the ready to wear business with the introduction of Park Avenue in 1986, catering to the formal men‟s wear market. Parx was launched in 1998 to address the growing trend of smart casuals. Both brands have captured major market share in their respective categories due to an inherent advantage of vertical integration and a strong retail presence. In 2000, Manzoni, a luxury lifestyle brand was launched offering a super-premium formal range of men‟s shirts, suits, trousers, jackets, ties and leather accessories. Raymond identified the vacuum for a high end, casual wear brand and hence decided to acquire ColorPlus as a part of strategic expansion plan for their ready-to-wear business. In September 2007, Raymond took its experience and creativity to a whole new audience by entering into the women‟s western wear category with two premium brands, including, ColorPlus Woman, an exclusive range of smart casual clothing for modern, discerning women and Park Avenue Woman, a complete range of Business Wear for women. Raymond Finely Crafted Garments (FCG) which was recently launched offers the customers same Raymond brand promise of „Trust, Excellence, Quality and Leadership‟ in an exclusive formal range of „classic‟ apparels and accessories. Brands RETAIL Raymond Apparel has also ventured into the kidswear segment, with its exclusive brand „Zapp!‟ Covering the spectrum of children's lifestyle products, it includes an entire range of children's apparel and accessories. In addition to this, Raymond Apparel has also launched „Notting Hill‟, the new

60 apparel brand under the popular price segment. A complete „value-for money‟ men‟s wear brand, Notting Hill is the perfect combination of fashion, fit, styling and affordability. All brands from the Raymond Group portfolio are well entrenched in the market and are sold through multi brand outlets, as well as dedicated, exclusive stores, in India and the Middle East. Raymond Textile Division- A Profile Raymond Limited, India‟s leading Textile and Apparel Company, is amongst the few companies in the world who bring wool from the back of the sheep to the back of the man, to become the largest integrated manufacturer of worsted fabric in the world. With a capacity of 33 million meters of wool & wool- blended fabrics, Raymond has over 60% market share in worsted suitings in India. With the inauguration of the Vapi plant, Raymond would boast of an installed capacity of 28 million meters. It is perhaps the only Company in the world to have such a wide range of suiting fabric to suit all ages, occasions and styles making it the preferred choice of top international design houses in over 50 countries. Raymond has many firsts to its credit from introducing the polywool blend in India (1959) to the launch of superfine wool collections such as the Lineage Line (1995), the Renaissance Collection (1996), and the Chairman‟s Collection (1999). Raymond was also the first company to establish the retail franchise network in India and neighboring countries. Raymond has mastered the craft of producing the finest suiting in the world using super fine wool from 80S to 220S count and blending the same with superfine polyester and other specialty fibres, like Cashmere, Angora, Alpaca, Pure Silk, Linen etc. It owns and operates three state-of-the-art manufacturing facilities at Thane and Jalgaon in Maharashtra and Chhindwara in Madhya Pradesh. With the new facility at Vapi in Gujarat, the Company will further increase its capacity by 3 million meters to have a total installed capacity of 31 million meters by April 2007. Recently, Raymond Limited announced expansion of its capacity for worsted suiting at Vapi in Gujarat by 3 million meters per annum. This would be an integrated facility starting from spinning upto finishing of fabric. The total cost of expansion is estimated at Rs.197 crores. It is expected to go on stream from

61 April- 07. A pioneer in manufacturing worsted suitings in India, Raymond produces nearly 12,000 varieties of suitings and is available in over 400 towns through 30,000 retailers. The Raymond suitings are also available through 320 exclusive The Raymond Shop (TRS) in 135 cities in India and abroad with 290 outlets in India and 20 outlets abroad. Raymond today offers customers a choice of over 4800 SKUs in over 20,000 patterns. The fact that Raymond makes world quality fabrics is evident in the global acceptance the brand has received. Internationally renowned menswear designers today style their latest collections from Raymond – the fabric in fashion. Raymond is the symbol of quality, style and an uncompromising commitment to its customers. It has achieved this by taking continuous initiatives in product development, marketing and setting up efficient distribution channels. Today, Raymond is ranked as the „Most Respected‟ Textile Company in India. In our endeavor to keep nurturing quality and leadership, we always chose the path untrodden - from being the first in 1959 to introduce a polywool blend in India to creating the world's finest suiting fabric, the Super 230s made from the superfine 11.8 micron- wool. Today, the Raymond group is vertically and horizontally integrated to provide our customers total textile solutions. Few companies across the globe have such a diverse product range of nearly 12,000 varieties of worsted suiting to cater to customers across age groups, occasions and styles. We manufacture for the world, the finest fabrics- from wool to wool- blended worsted suiting to specialty ring denims as well as high value shirting. After making a mark in textiles, Raymond forayed into garmenting through highly successful ventures like Silver Spark Apparel Ltd. (for fine Tailored Suits, Trousers and Jackets), EverBlue Apparel Ltd. (Jeanswear) and Celebrations Apparel Ltd. (Shirts). We also have some of the most highly respected apparel brands in our portfolio: Raymond, Manzoni, Park Avenue, ColorPlus , Parx, Be: and Zapp! The Raymond Group also has an expansive retail presence established through the exclusive chain of 'The Raymond Shop' and stand-alone brand stores for Manzoni, Park Avenue, ColorPlus , Parx, Be: and Zapp!. With a 500 million US$ turnover, we are today one of the largest players in fabrics, designer wear,

62 denim, cosmetics & toiletries, engineering files & tools, prophylactics and air charter services in national and international markets. All our plants are ISO certified, leveraging on cutting-edge technology that adheres to the highest quality parameters while also being environment friendly. With over 60% market share in India, Raymond Ltd. is today the largest integrated manufacturer of worsted fabric in the world. The company comprises the following divisions. Who we are With a 28 million meters (soon to be 31 million meters) capacity in wool & wool-blended fabrics, Raymond commands an over 60% market share in worsted suiting in India and ranks amongst the first three fully integrated manufacturers of worsted suiting in the world. We are perhaps the only company in the world to have a diverse product range of nearly 20,000 design and colours of suiting fabric to suit every age, occasion and style. We export these to over 55 countries, including USA, Canada, Europe, Japan and the Middle East. What we do Raymond produces high-value pure-wool, wool blended and premium polyester viscose worsted suiting, in addition to half a million blankets and shawls. Our strong in-house skills for research & development have always resulted in path-breaking new products, raising the standard of the Indian textile industry. Our relentless pursuit of excellence has earned us an over 60% market share in worsted suiting in India. Creating the finest suiting in the world Over time, Raymond has mastered the craft of producing the finest suitings in the world using super fine wool (with a fine count from 80s to 230s) and blending the same with superfine polyester and other specialty fibres like Cashmere, Angora, Alpaca, Pure Silk, Linen etc. We also produce and market plush-velvet furnishing fabric in a wide array of designs and colours for Indian and overseas markets.

63 Technological Breakthroughs to our Credit Raymond has been pioneering technological breakthroughs over the years, and was the first to introduce Polyester-Wool and Polyester-Wool-Viscose in the Indian market. During the last decade, many path breakthroughs were made.  1995: Superfine pure wool collection under the Lineage Line (Super 100s to Super 140s).  1996: The Renaissance Collection made of Merino wool blended with polyester and specialty fibres (Super 100s to Super 140s).  1999: The Chairman's Collection of Super 150s made from Merino Wool and Cashmere followed by Super 160s to Super 190s.  2002: Super 200s (13.5 microns) fabrics under the Chairman's Collection.  2003: Applause Wool-Rich Home Washable Suiting.  2003: Super 210s (13.2 microns) fabrics under the Chairman's Collection.  2004: Super 220s (12.7 microns) fabrics under the Chairman's Collection.  2005: Raymond achieved a rare feat and a historical milestone with the creation of the world's finest worsted-suiting fabric from the finest wool ever produced in the world- The Super 230s fabric made up of 11.8 micron of wool.  2005: Launch of 'Expressions' an exquisite collection of all wool and polywool suiting fabric specially crafted using exotic fibres like Cashmere, Angora, Mohair, Bamboo, Casein. A legacy of Style Through the years, Raymond has been consistently reckoned as the torchbearer of quality and style and this has been vindicated by our ever increasing customer base. We not only rank amongst the first three fully integrated manufacturers of worsted suitings in the world but are also regarded as the „Most Respected ‟ Textile Company in India.

64 Here we are ! Our suitings are available in India in over 400 towns through 30,000 retailers as well as more than 300 exclusive retail shops better known as 'The Raymond Shop'. Our exclusive chain is present in over 150 cities across India and overseas. Producing 230s Raymond has created the world‟s finest worsted suiting fabric- the Super 230s, from the world‟s finest wool (a tiny 11.8 micron- approximately one-fifth the diameter of human hair!). The term „Super 230s‟ connotes fineness of the fabric. It is half the thickness of the standard 22.5 micron wool grade used for worsted suiting fabric. This fabric is a generation ahead of our previous innovation, the Super 220s. The Super 230s worsted suiting fabric has been included in the Raymond‟s „Chairman‟s Collection‟, a range of international, superfine light fabrics with unparalleled comfort and luxury. The fibre of this bale comes from a breed of Australian Merino Sheep - renowned for their fine fleece. As this is an extremely delicate fibre, producing it involves skilled manpower and careful handling- right from spinning, weaving to the finishing of the product. With the introduction of this ultra-fine fabric, Raymond has become the first Indian textile company to emerge as a leader in a domain that has traditionally been the stronghold of Italian and Japanese textile companies. Enchanting ‘Expressions’ From Raymond's latest collection Developed in-house, „Expressions‟ is an exquisite collection of all wool and polywool suiting fabric. The „Expressions‟ collection comprises innovative and classy suit lengths, trouser lengths, jacketing and coat lengths. The collection is available at prominent retails shops and „The Raymond Shop‟ outlets. We create this range of fabrics using specially crafted using exotic fibres like Cashmere, Angora, Mohair, Bamboo, Casein (a fibre developed from milk protein), Linen, Silk, Soyabean, Tencel blended with Super 120s, 100s Merino Wool and fine polyester. This combination of fine wool specialty fibres, lends the

65 fabric a soft texture with durability and drape while its versatility allows it to be stylishly fashioned Pioneering Role of Raymond Garment companies have been successful in the Indian market using different approaches and distribution methods. Raymond, with its history of more than 75 years, relies on its long standing reputation, loyal customer base and well- established, extensive retail network in over 400 towns through 30,000 retailers and over 270 exclusive Raymond Shops. In fact, Raymond initiated the entire business of developing the menswear apparel business. It started the development work through the introduction of its first brand, Part Avenue. The readymade garments division has since then grown rapidly. It has create many a pioneering trend such as ready wear suits. Raymond has now become the leader among ready - mades. In India, achieving a business turnover of over Rs. 200 crores with its three brands - Park Avenue formal wear. Pazx casual wear and Manzoni, a premium range of shirts, suits and ties. Raymond as a group enjoys a huge advantage over the competition - that of vertical integration - right from manufacturing, to ready-to-wear to distribution. The main components of a successful integrated ready-made garments manufacturer are:  Fabric design  Garments design  State-or-the-art manufacturing systems.  Integrated logistics To participate on a global platform, one cannot do without any one of these components. Logistics has to do with supply chain man-agreement. It starts from the procurement of the basic raw material till the finished product reaches the end consumer. In the ready-to-wear segment, the maintenance of the logical chain is challenging due to the various fits, collections and seasonalities and also the challenges in term of colour and design, as requirements of both design and fabric change with season. At Raymond, the entire supply chain management is managed through a state-of-the-art software system, developed and tailored to meet its specific needs.

66 With a capacity of 25 million meters of wool & wool blended fabrics, Raymond ranks among the top three integrated producers in the world and has a 60 per cent market share in India alone. Internationally it is known to be a quality supplier of fabric to many leading global brands, having a consolidated position in the global fabric exports market. It exports suitings market. It exports suitings to more than 50 countries including the U.S. Canada, Europe, Japan and West Asia. Exploring potential markets for expansion is one of its prime focuses. Some time in the 1960‟s, one of Raymond‟s regular textile importers in Sweden made the observation that the cost of manufacturing readymade garments was becoming increasingly prohibitive in his country. This was true for the rest of Europe as well. Raymond was quick to seize this opportunity. Assessing the viability and future scope of garment exports. Raymond set up a readymade garment plant at Thane (Mumbai) in 1968. While the machinery and equipment arrived from Italy, Sweden, Germany and the U.S., the know how cam from Scandinavia. Swedish experts trained a team of technicians at Raymond in every area of the garment business. It was a logical extension for Raymond to get into the readymade garment segment and today there is total synergy between textile and ready-mades. While it has mastered the art of making quality fabrics, its objective is now to attain a significant global position in the readymade segment. The aim is to be among the considered brands in the world and to have the mind share of leading garment manufactures and the best brands globally. At the point of its entry into readymade garments there was no existing ready-to-wear wardrobe brand. Which met the consumer‟s needs. Acquisitions for growth The major player in the nation‟s fiercely competitive apparel retailing industry are constantly positioning themselves to maximize profits. To foster growth, many firms bought out the competition or other companies that would given them access to new markets and distribution channels. The downside of all this acquisition activity is the potential to create too many similar products,

67 Attracting new customers and generating sales are the top strategic goals for retailers. In September 2001, Raymond Limited acquired the entire shareholding of Regency Texteis Portuguesa Limitada, a company incorporated in portugal and having its factory in caminha, at the total share price of $ 3 million. Portugal offers a highly competitive cost structure in western Europe for garment manufacturing with wage levels significantly lower than in the U.K., France, Italy and West Germany. The acquisition has provided Raymond with a manufacturing and distribution base in Europe. It intends to expand the retail shop network of regency significantly and through this acquisition promote the Raymond brand in Europe. With a tenfold rise in sales in the past decade, ready made trousers are the hottest item in the men‟s apparel market. As per a Five-Year Fact File the trouser market in India has grown at three per cent every year over the past 5 years. From 14, the number of national brands has grown to 25, a 75 per cent growth. From Rs. 385 crore five years ago, the estimated worth of the branded trouser market has grown to more than Rs.800 crores today. Raymond is also the manufacturer of the widest range or trouser fabric in the county. Raymond emphasizes that the Indian men till recently opted for fit and, of course, price and wear ability. The company produces over 6000 varieties of suitings. For Raymond, on a category wise perspective, the overall focus will be on shirts. The casuals business will be looking at good growth including denim. Exports are an identified growth are for branded garments. At present exports are in the initial stages. Raymond Ltd has announced a major expansion of its business fabric. The company is set to undertake a Rs.197-crore project envisaging expansion of its production capacity of worsted suiting at its Vapi unit in Gujarat by three million metres per annum. This would be an integrated facility starting from spinning to finishing of fabric and is expected to go on stream from April next year, the company announced. The first phase of expansion announced last year is likely to start commercial production shortly as per planned schedule. After this expansion, the company would have a total capacity for worsted suiting of 31

68 million metres per annum, which would be one of the largest integrated manufacturing facilities for worsted suiting in the world, the company claimed. The announcement comes at a time when the textile industry in India is going through a buoyant phase. The textile division of Raymond has recorded revenue of Rs.612 crore for the nine months ended December 2005, a growth of 12 per cent over the corresponding period of previous year. One-stop-shop The suits and trousers manufacturing facility set up by the company as part of its strategy to be a one-stop-shop is already operational and large portion of the export growth in the business is likely to come through this route. Announcing the expansion in a notice to BSE, Mr. Gautam Hari Singhania, CMD of the company, said, "The company is moving forward as planned along the path of becoming a world class integrated textile player through putting up world class manufacturing capacity and partnerships with internationally well reputed players." The company also informed BSE that Mr. I.D. Agarwal ceased to be a director of the company, consequent upon the withdrawal of his nomination by UTI Asset Management Co Pvt. Ltd.  1925 - Setup of The Raymond Woollen mill in the area around Thane creek.  1944: Lala Juggilal, Lala Kailashpat Singhania took over The Raymond Woollen Mill. The mill was primarily making cheap and coarse woollen blankets, and modest quantities of low priced woollen fabrics.  1950 - Setup of a new manufacturing activity for making indigenous engineering files known as JK Files & Tools. This has now become the largest facility of its kind in the world.  1958 - The first exclusive Raymond Retail showroom, King's Corner, was opened in 1958 at Ballard Estate in Bombay.  1964 - Setup of a new Combing Division. This was followed by a phase of vertical integration, facilitating in the processing of multi-fibres and technology improvements to make blended fabrics.

69  1968 - Raymond setup a readymade garments plant at Thane. The readymade garments division of Raymond has since then grown rapidly. Raymond has now become the leader among readymades, in India, achieving a business turnover of over Rs.2000 million.  1979 - A new manufacturing facility was set up at Jalgaon, to meet the increasing demand for worsted woollen fabrics.  1980: Vijaypat Singhania took over the reins of the company. He injected fresh vigour into Raymond, transforming it into a modern, industrial conglomerate.  1986 - Launch of "Park Avenue", the premium lifestyle brand providing a complete wardrobe solution to the men who like to dress well & be current on styles & fashion.  1990 - The first showroom abroad for Raymond in Oman.  1991 - A new manufacturing facility was set up at Chhindwara, near Nagpur.  1995 : Superfine pure wool collection under the Lineage Line (Super 100S to Super 140S).  1996: The Renaissance Collection made of Merino wool blended with polyester and specialty fibres (Super 100S to Super 140S).  1996: Raymond's denim; focusing on quality, innovation and the creation of exclusive products that have always caught the eye of some of the world's leading denimwear brands. Its designs have always kept pace with the changing styles and cuts found in every youngster's closet. With a 40 million meters capacity, Raymond today ranks amongst the top 2 producers of ring denim in India  1999: The Chairman's Collection of Super 150S made from Merino Wool and Cashmere followed by Super 160S to Super 190S.  1999: Launch of "Parx", a premium casual wear brand bringing customers a range of semi-formal and casual clothes.  2000: Launch of "Be:", exclusive prêt line of ready-to-wear designer clothing for men and women.

70  2003: Setup of 'Silver Spark Apparel Ltd.' for manufacturing suits and formal trousers catering largely to export markets.  2003: Acquisition of ColorPlus  2004: Super 220S fabrics under the Chairman's Collection.  2005: Setup of state-of-the art jeanswear facility 'Everblue Apparel Ltd.' near Bangalore.  2005: Setup of state-of-the art facility 'Celebrations Apparel Ltd.' for the manufacturing of formal shirts.  2005: Raymond achieved a rare feat and a historical milestone with the creation of the world's finest worsted-suiting fabrics from the finest wool ever produced in the world- The Super 230s made up of 11.8 micron of wool.  2005: Launch of 'Expressions' an exquisite collection of all wool and polywool suiting specially crafted using exotic fibres like Cashmere, Angora, Mohair, Bamboo, Casein.  2006 Set of Raymond's third worsted unit at Vapi in Gujarat. Raymond now has 3 state of the art units with a combined capacity of 31 million meters of worsted fabric.  2006 Launch of design studio in Italy for cutting edge design capabilities for exports and domestic brands.  2006: Set up of world class carded woollen unit, Raymond Fedora Ltd, in Jalgaon.  2006 Set up of greenfield shirting unit at Kolhapur producing high value cotton shirting. This facility is set up as part of the company's JV with Gruppo Zambaiti.  2006 Set up of J.K. Talabot Ltd - JV with MOB, France for the manufacturing of files and rasps.  2006 Launch of Zapp! our kidswear brand with first store in Ahmedabad.

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