Reliance Industries has entered into a brand alliance with Coimbatore-based sewing threads leader, Precot Meridian. Reliance, as per the non-commercial deal, will allow Precot Meridian to use its Recron SHT Brand on RILsewing threads brand.
The grey rpt grey sewing thread market in India is approximately INR 1,500 crores as per industry estimates. The polyester threadslead this market, with 85% share and the rest is for the nylon and cotton threads. Precot Meridian is the leader of the domestic market of threads with INR 700 crore sales. In the last fiscal year their total income of exports contributed more than INR 200 crore.
More about Co-Branding Agreement
As per the co-branding agreement for the range of polyester sewing thread yarn, Precot will be manufacturing colored and grey polyester sewing thread yarns by using Reliance's Recron SHT, known for its superior tenacity fibers. The yarn produced will then be sold co-branded with Recron SHT. In addition to branding, Reliance will also offer marketing support to help establish Recron SHT, a well-known brand.
The aim of this co-branding is to ensure that high-quality products reach the end consumers and help the companies strengthen their customer base with a relationship built on trust.
Mega RIL Expansion Helps to Meet the Muted Polyester Demand
When RIL rolled a $14-billion project to boost the capacity of its Jamnagar unit, in 2012-13, the objective was to increase the aggregate capacity of its 20 petrochemicals by 66 per cent. For polyester, the jump would be around 84%, reaching a capacity of 3.5 million tones.
By the end of the financial year, the Mukesh Ambani-led company will reach its target of being in the world’s top five petrochemicals producers.
RIL Looks to Overcome Economic Slowdown
The falling prices of the crude dragged down the price of the petrochemicals and the economic slowdown in China that hit the commodities spectrum have damaged the pitch. According to experts the situation is likely to stay unchanged,but this will have little effect on RIL petrochemical division’s margin.
RIL had timed the expansion anticipating a rise in demand from China and India was. As per a report by brokerage house CLSA, the margin of petrochemical was expected to increase by $15 per tonne to $400 per tonne.
While the management of RIL acknowledges these pressures, it expects the integrated nature of its operations to help. As RIL is an integrated firm, it need not depend on the volatility of the polyester intermediaries and prices. Another benefit for RIL is the low expansion cost it has managed to maintain as the original plan was executed at a time of moderate demand, thus the company can cash the low-cost expansion benefits.
In January, RIL also launched a brand series of 4G smartphones called
LYF ahead of its upcoming 4G data services.
Summary
Reliance Industries enters into branding alliance with Precot Meridian, a well-known Recron Fibre brand.