BURLINGTON AIMING FOR JOINT VENTURE TO MAKE, SELL DENIM IN INDIA, ASIA
NEW YORK--The U.S. denim invasion of India continues. In the latest move, Burlington Industries Inc. said Monday that it is negotiating a joint venture agreement to manufacture and market denim in India. Burlington Denim and Mafatlal Industries Ltd., a subsidiary of Arvind Mafatlal Group of New Delhi, hope to reach a final agreement in June on building a factory that would be producing denim fabrics for sale in India and throughout Asia by late 1996, Burlington officials said. The joint venture would mark Burlington's first overseas production of denim. Burlington's plan comes on the heels of an announcement last week that Lee Jeans will be made and marketed in India through a technical assistance agreement with AM-IN Horizons Inc., a U.S. firm affiliated with Arvind Fashions Ltd., a wholly owned subsidiary of Arvind Mills Ltd. Lee is a division of VF Corp., whose Wrangler jeans have been sold in India since 1987 under a similar arrangement. A Burlington spokesman said his company's and Lee's moves are unrelated, although he did say Lee is a key customer of Burlington and could purchase some of the denim made in India. Annual sales of the initial phase of Burlington's joint venture would be $30 million to $35 million, the company said. Mafatlal officials said the joint venture company would be called Mafatlal Burlington (India) Ltd., with the two partners holding equal shares. They said initial capitalization of the new company would be about $13 million (400 million rupees). A Burlington spokesman said the financial and management structure and other contractual details haven't been nailed down. The proposed venture would set up a plant at Navsari, in the western state of Gujarat, to manufacture 10.9 million yards of denim fabric annually, according to V. Sanjeevi, executive director of Arvind Mafatlal. Production could be tripled when two more plants are built, he said. Sanjeevi said Burlington would buy about 70 percent of the production from the Indian plant. George W. Henderson 3rd, president and chief executive officer of Burlington Industries, said, "Asia is the fastest-growing market in the world, with an increasingly affluent middle class that has a huge appetite for Western-influenced products such as denim jeans. This is an excellent growth opportunity for Burlington." Burlington had 1994 sales of $2.1 billion, with $1.3 billion coming from apparel fabrics. Mafatlal Industries is India's largest textile producer, with sales volume of over $200 million. Arvind Mills had 1994 sales of $93 million.
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