Century Textile likely to merge its textiles biz with ABFRL

Century Textiles and Industries is looking to demerge its textile business and likely to merge it with Aditya Birla Fashion & Retail (ABFRL) to bring the entire textile and fashion business of the Aditya Birla Group under one roof.

In the textile business, Century has two revenue streams: cotton fabric and denim units that can be integrated with ABFRL’s businesses. The company has a vertically integrated plant at Bharuch for manufacturing cotton fabrics. The cotton division of Century is one of the oldest players in India and manufactures a wide range of premium textiles and supplies to many international players, including Royale Linen, Ralph Lauren, DKNY, Belk and US Polo.

Century earned about Rs 1,817 crore, or 8.6 per cent of total revenues, from its fabrics and denim business and is a supplier to ABFRL.

According to analysts, with a new management led by Birla Group chairman Kumar Mangalam Birla now taking charge, a restructuring of its businesses is now inevitable. After raising their stake through a preferential offer, the Birlas have consolidated their grip over the company by inducting Rajshree Birla on the board of Century Textiles in May last year.

In the past one year, ABFRL itself has undergone major restructuring under which the fashion business of Aditya Birla Nuvo – comprising Madura Garments – was merged with the company, making it the largest fashion retail player, with consolidated revenues of Rs 12,000 crore.