Divergent market strategies and business moves pay
The year 2017 has been a significant one for the Mumbai-based Donear Group. As part of its strategy to consolidate its top position in the Indian textiles industry, the Group acquired key brands and manufacturing assets to further strengthen its leadership position in the global textile industry. In July 2017, as a strategic move that will significantly enhance its profile and addressable market in the global textiles space, the Donear Group acquired Grasim Bhiwani Textile Ltd. (GBTL), the poly-viscose suiting fabrics subsidiary of Grasim Industries.
This acquisition gives the Donear Group a strategic edge in global textiles business in terms of world-class production capabilities to market products and access to the marquee customers globally.
Subsequently, in November 2017, Donear Group made another major acquisition of OCM, which manufactures a variety of high-quality all-wool and wool-blended worsted suiting fabrics. This acquisition will enable the Group to expand its range of products to Indian consumers for all weather conditions and for all occasions. In a win-win deal, OCM gets access to the management expertise of the promoters of the Donear Group to expand its product range and distribution footprint within India as well as in the overseas markets.
Both these acquisitions are expected to further strengthen Donear’s leadership both in the domestic and global textile industry.
Flashback
Now a peek into the history of Donear. The textile scenario in India was poised to become more enterprising and proficient with a global outlook in the 1970s when Mr. Vishwanath Agarwal, a visionary with high entrepreneurial skills, realised the importance of futuristic fashion and fabrics in India. Woven intricately with Mr. Agarwal’s vision, foresight and determination, the brand DONEAR was created in 1977, and within a short span of time, it became a household name along with other Indian brands.
Known for its Pioneering Fabrics, Continuous Product Development and very Strong Marketing Network, Donear persisted in building its reputation by catering to the ever-growing needs of the textile markets in India and abroad, and thus defined new standards in the field of fabric manufacturing with excellent customer services.
According to Mr. Rajendra Agarwal, Managing Director, Donear Group, Mr. Vishwanath Agarwal was a figure of inspiration and his contributions to the company have made it possible for the brand to achieve success.
Another factor that has contributed to the success of the brand is the technical expertise of the Managing Director, Mr. Rajendra Agarwal. The founders and leaders of the company never left a stone unturned in making sure that the company had the latest and most efficient technology. This was a factor that they never neglected. The technical background of Mr. Rajendra Agarwal helped retain the efficiency of these technologies.
Donear is today well-recognized in India and outside as one of the best-quality product makers and innovators who are in business for over 40 years. It has production capacity of around 55 million meters per annum with latest technologies and machinery at Surat. Apart from being a leader in India, Donear also has its strong presence in over 20 countries globally. With a comprehensive product basket, the company is able to supply fabrics to India’s largest brands, including Louis Phillipe, Van Heusen, Peter England, Blackberry, Arvind, Wills Lifestyle, Future Group and more. In retail, the Donear has a strong network of 185+ stores, marketing textiles under the D’Cot & Donear NXG brands with positive cash flow.
Donear has become an industrial giant with the total group turnover of Rs. 1,100 crores, out of which 25% is from exports. With the strength of all the brands associated with Donear and its recent acquisitions, the management has a vision of becoming the fastest growing textile company targeting 30% of the domestic branded suiting fabric share. With the employee strength of more than 8,000, Donear is one of the largest and most successful manufacturers and distributors in India.
Acquisition of GBTL
GBTL is the country’s largest manufacturer of PV and PW suiting, selling its products under the “Grasim” and “Graviera” brands in India in over 25 countries.
The biggest strengths of GBTL are its quality-conscious trade partners and global customers. GBTL caters to international fashion houses in the US and the UK, supplying fabric to them for making garments which are available in some of the largest retail chain stores. The Donear Group aims to build further on GBTL’s existing strengths.
Mr. Rahul Rajendra Agarwal, Director, Donear Group, said: “The GBTL acquisition is driven by our desire to expand our business both pan-India and in global markets, and progress towards its strategic goal to become the recognized leader in products and services we offer and increase our market share. This GBTL acquisition will utilize strengths of both partners in terms of infrastructure, manpower and product portfolio. Apart from the world-class production capabilities, the acquisition also gives Donearan access to the strong nation-wide retail network, wholesalers and multi-brand outlets through which we will expand our reach.”
GBTL Ltd. has its strong presence in the manufacturing of polyester viscose and polyester wool fabric which caters to the domestic as well as international market across geographies under the brand name GBTL – Grasim. The Domestic OTC Division operates in the formal menswear fabric market by offering ready to stitch suiting & shirting. The Brand & Retail Division caters to domestic RMG brands as well as global brands by supplying garments and also acts as full service provider by offering one-stop solution of fabric to garment.
The GBTL – Grasim brand is known for young, fashionable and innovative brand targeted at the fashion forward consumer. Grasim’s offerings are the outcome of an innovation-driven culture, diligent research and development and a dedication to live up to consumer expectations. Grasim has all-India presence through an elaborate and well-established pan-India distribution network.
Mr. S. Krishnamoorthy, Managing Director of GBTL, appointed by the Donear Group, said: “Existing market conditions offer abundant opportunities for companies with robust infrastructure and in-house manufacturing capacities, different types of product categories, good customer base, speed to market and absolute focus on textiles as their core business. In India, huge opportunity exists for fabric in Over-the-Counter (OTC), Readymade Garments (RMG) and export segments. Taking on the vision of “Make in India”, both Donear and GBTL will maintain their individual identities and will stay committed to offer best products and services to their valued customers as one team.”
Both the entities will continue to focus on their respective brands like Grasim Suiting & Graviera Suiting (GBTL) and Donear & Royal Classico Suiting (Donear) in India as separate teams. The management will continue its efforts to strengthen and utilize their combined product basket to serve its customers. Donear will continue its focus on the OTC segment while strengthening its network pan-India and will expand its product portfolio in the domestic and international markets.
OCM acquisition
OCM Pvt. Ltd., formerly known as OCM India Ltd., began its journey as a textile manufacturer 1924 and forayed into worsted fabric in 1972.It has a sprawling 37-acre complex that houses an ultra-modern plant with 23,000 spindles, 120 high-speed shuttles-less looms and a woollen processing unit, with a weaving capacity of 25,000 meters of fabric per day and an employee base of 900.
Mr. Rajendra Agarwal said: “OCM is India’s best-quality manufacturer of woollen & worsted fabrics, and thanks to their skilled manpower for ensuring best quality of fabric, OCM’s tweed suiting material is extremely popular for Blazer & Jacket fabric across India. No other manufacturer in India has been able to match the quality of the OCM Blazer and jacket of Tweed fabric till date. We have charted out ambitious and aggressive plans to promote the OCM brand.”
The distributors of OCM, who generally witness lower sales during non-winter seasons, will be able to sell an additional range of products, especially Giza, Supima, wrinkle-resistant cotton fabric for jackets, trousers, etc., and terry rayon fabric for suit length.
OCM is the first integrated worsted woollen fabric manufacturing unit in India with the prestigious ISO 9001 certification. It is also the first Indian textile company to receive the NABL accreditation in accordance with the international standard ISO 17025:2005 for its in-house Quality Assurance Laboratory.
Originally a part of the SK Birla Group (Birla VXL), OCM was acquired by private equity funds managed by WL Ross & Co. LLC in 2006. Since that acquisition, OCM has undergone extensive transformation across manufacturing and product development to revitalize its brand and strengthen its business. OCM’s product design function is at the forefront of global styling with the design office in Biella, Italy. Due to its superior product quality, institutional customers such as hospitals, airlines and hospitality companies, schools and government undertakings consider OCM as their preferred supplier of worsted fabric.
With the acquisition of GBTL and OCM, the Donear Group will be able to offer a complete range of fabrics under a bouquet of brands, including OCM, Ferrino Mizzoni, GBTL-Grasim, Donear, Graviera, Royal Classico, Donear Cottons–Belboni & Cotonova, iTR Terry Rayon Suiting and Bronson Shirting. In retail, the Donear Group is successfully operating Donear NXG (MBO) and D’Cot (EBO) branded retail stores.