Textile giant SVG Fashions integrates vertically by acquiring Raj Rayon

SVG Fashions founded in 1984, has evolved from a weaving and processing unit into a complete textile manufacturer, offering one-stop solutions from yarn to finished garments. SVG Fashions, acquired Raj Rayon Industries to vertically integrate its operations and gain control of the entire polyester value chain, from raw materials to finished garments. Raj Rayon had shut down for years due to outdated machinery and poor management. However, Sandiip Agarwwal, Director, Raj Rayon Industries and Joint Managing Director says, SVG invested nearly Rs 500 crores to revive the company and now they expect it to reach 400 tons production capacity per day by the end of 2024.

Raj Rayon will operate as a separate company for now, but will focus on supplying SVG with high-quality polyester filament yarn. This will allow SVG to reduce reliance on external suppliers and create high-quality products. SVG's current turnover is close to Rs 300 crores, and Raj Rayon is expected to reach approximately Rs 750 crores by the end of this year. The acquisition is an example of consolidation in the textile industry, where companies are merging or being acquired to survive and improve efficiency.

Agarwwal says, SVG believes in slow and steady growth with a focus on efficient use of existing capacity before expanding. This approach is in contrast to the fast-paced startup culture, but it can be successful in the capital-intensive textile industry. Meanwhile, SVG is planning to invest in manufacturing recycled yarns to cater to growing demand.