Grasim’s popular VSF brand ‘LIVA’ for the VSF business has been extended to the home textile category with the launch of “LIVA HOME”. Today, LIVA partners with over 40 retail brands and is available across 3,500 outlets in exclusive business outlets and large format stores, in addition to many more MBOs in 250 cities of India. This has resulted in doubling of the viscose fibre consumption in the country over the past four years.
Viscose business has been registering a double-digit growth in the last few years and its market share in the overall fibre basket has gone up from 3.5% to 5% in the last four years. The value-added Speciality Fibre line of 16 KTPA capacity based on in-house technology was commissioned at Kharach in May.
The brownfield capacity expansion plan of 219 KTPA at Vilayat is progressing well with the construction work in full swing, scheduled to be commissioned in FY21.
The net revenue for FY19 stood at Rs. 10,325 crores, up by 23% yoy. The VSF business reported record production and sales volume of 541 KT in FY19.
Grasim has announced that a total capex plan of Rs. 6,454 crores is under execution for raising capacities in both the VSF and chemical businesses, apart from ongoing modernisation capex at various plants. This capital expenditure will be incurred over FY20-FY22.
Acquisition of Soktas India Pvt. Ltd. (SIPL)
The acquisition of 100% equity of SIPL by the company for Rs. 135 crores is aimed at expanding its leadership in premium fabric, complementing its existing linen business. SIPL has since been renamed as Grasim Premium Fabric Pvt. Ltd. The Board has approved merger of this subsidiary with the company subject to regulatory and other approvals.
The VSF business will continue to focus on expanding the market in India by partnering with the textile value chain, achieving better customer connect through its brand LIVA, extensions into new categories and enriching the product mix through a larger share of specialty fibre. However, the new capacities recently commissioned in Asia may create short-term demand-supply mismatch and the resultant pressure on prices.