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Celebrity Fashions looks to Vietnam as sourcing base
Chennai-based garments exporter Celebrity Fashions Ltd plans to take up manufacturing in Vietnam by partnering with a local garments maker to take advantage of that country’s lower cost structure.
The MEPZ plant, which operated with a fixed cost base of Rs 6.75 crore a month, has seen this reduce to Rs 4.3 crore. Altogether, the company has seen a cost savings of Rs 24 crore over the past year. Mr Rajgopal avers that the worst is behind the company. "I am convinced we have the skills to capitalise on the export business," he said.
While the skills acquired in garments exports has helped in a robust domestic business with the launch of womenswear in Indian Terrain, the company could look at a demerger and subsequent listing of Indian Terrain if the Singapore-based private equity fund offered a good premium. "We will look at a minimum investment of Rs 100 crore," he said.
However, Mr Rajgopal said that the company was sitting on cash of Rs 42 crore to invest in its Vietnam project and for the retail expansion of the Indian Terrain brand. This is from the IPO it had in late 2006 and the sale it made earlier this year of a 1,000 machines shirts plant.
The company targets to finish this financial year on a turnover of Rs 345 crore - Rs 220 crore of this from exports - and expects to make an operating profit. Last year it had revenues of Rs 332 crore.
