One of India’s oldest textile companies’ is selling off its last factory. Know why

Facing tough competition from the unorganised sector, one of the oldest textile businesses in India, Bombay Dyeing & Manufacturing Company Ltd would sell its textile manufacturing unit at Ranjangaon in Pune for Rs 230 crore.

The company is closing the last of its manufacturing units also due to increasing imports from Taiwan, China and Bangladesh, according to an Economic Times report.
The Wadia group flagship's textile processing unit at Ranjangaon is being sold on a "slump-sale basis", or without assigning specific values to individual assets and liabilities, to a firm called Oasis Procon Pvt Ltd.
The Ranjangaon facility was built after the Nusli Wadia-led company decided in 2005 to undertake a strategic business restructuring and shut down manufacturing activities in two prime locations in Mumbai.
Moreover, the Ranjangaon unit was built to cater to exports and institutional sales. However, this did not work as per plan. The company earlier admitted that the unit is no longer viable.
The sale of the unit may not have any impact on the company's existing retail business and its brand — Home & You — Bombay Dyeing. But it may have some sentimental impact on those associated with the firm. The company was established by Nowrosjee Wadia in 1879.
"It is a pragmatic call. It is not core to their business," said Arvind Singhal, chairman at consulting firm Technopak, who closely tracks the textile industry. "Bombay Dyeing has struggled with the textile business for almost two decades," he said. "The focus has clearly shifted to monetising real estate ... The value of the land on which its factories stood once is much more valuable than its textile business."
For the Wadia group, biscuit maker Britannia is now the crown jewel, along with the real estate business of Bombay Dyeing and budget airline GoAir. The airline venture is profitable and would require funds for expansion.
Bombay Dyeing is shutting down the textile processing plant at a time when home textile manufacturers in India have developed an edge over their Chinese and Pakistani peers.
In 2014, Mukesh Ambani's Reliance Industries decided to sell its textile brand Vimal to a joint venture, with its Chinese partner Shandong Ruyi Science & Technology Group holding a 49% stake.
(Image: Reuters)