Aditya Birla Group's a flagship company Grasim Industries is supposed to be looking for suitors to sell its Graviera suiting brand along with some production facilities associated with it at Bhiwani, Haryana. The size for both the brand and the facilities is estimated at about Rs 100 crore.
The company is already in talks with some prospective buyers and that a deal is likely to be announced soon.
The fibre-to-cement major has already taken an in-principle decision to focus on its Grasim range of suiting and fabrics, and is keen to prune its portfolio of poorly performing businesses.
Vikram Rao, Director of Aditya Birla Nuvo (formerly Indian Rayon), and the Business Head of branded apparels including the suiting range stated that it is difficult to spend money and satisfy the consumer with two brands. Although they will retain the Graviera brand, it will now be called Graviera suiting by Grasim. The Graviera brand will be supported by the mother brand of Grasim.
He added that the Grasim's decision is based on its belief that the poly viscose business is not a growth area to be in, and it wants to focus on the viscose business, which is the Grasim suiting range.
Of the two, Grasim is considered a better prospect as it is growing at about 10%-12% every year. In the synthetic suiting segment, it can be said that Grasim is the second largest selling brand after Raymond. The retail prices for Grasim is at around Rs 1,000 a meter, while the retail price for the Graviera brand is about Rs 400 a meter.
Grasim's textile business has, for a long time, been struggling for growth and profitability. In the quarter ended September '05, it had revenue of Rs 73.7 crore, down 5.2% from the year-ago quarter. The company is a leading producer of Viscose Staple Fibre.
It was quite a dramatic step for the company considering that Gwalior Silk Rayon Manufacturing (Weaving) Company (the earlier avatar of Grasim) was formed in 1947 in Gwalior to make fabrics using imported rayon.
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