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| Former RIL arm Trevira weaves turnaround under new mgmt |
| PB Jayakumar / Mumbai Aug 23, 2010, 00:08 IST |
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Polyester manufacturer Trevira, the former German subsidiary of Reliance Industries (RIL) that went bankrupt last year, is on a comeback trail within six months of being under a new management.
The company had done well between January and July with a turnover of around 120 million euros (Rs 710 crore) in sales, which was 10 per cent above the forecast, claimed Uwe Wohner, the new chief executive officer of the relaunched Trevira GmbH.
The turnaround was possible due to stability in demand from customers in the textile industry, cost-cutting and restructuring measures adopted and through higher sales volumes, he claimed in a statement posted on the company’s website a few weeks ago.
“These first six months of the new Trevira have been very successful ones, we have achieved all the targets we set, and even exceeded most of them. All our capacities are being used to the full and we are getting only positive signals from customers in our most important market segments,“ he said.
Trevira, which manufactures high-value, branded polyester fibres and filament yarns, filed for insolvency proceedings in June last year, following efforts from RIL to restructure the company and turn the business around had failed. Trevira, once the largest polyester manufacturer in eastern Europe, was heavily dependent on orders from automobile manufacturers, and the economic downturn in the past few years had reversed its fortunes.
“We see Trevira’s bankruptcy filing as a strategic decision by RIL to pull out of an under-performing entity in an economical way,” credit rating agency Standard&Poor’s had observed on RIL’s move to get rid of the struggling polyester company.
Given Trevira’s small size, there would be no material impact on RIL’s capital structure or earnings profile post the divestment, Standard&Poor’s had said.
RIL bought Trevira in 2004 for $100 million from the Deutsche Bank AG to become the world’s largest polyster maker. In January, a German insolvency court had transferred the company to its new owners Stefan Messer and Dr Karl-Gerhard Seifert, both former employees of Trevira. As part of the insolvency proceedings, RIL had committed to pay in full the outstanding bank liabilities of 55 million euros for Trevira GmbH.
“European textile manufacturers are currently facing a considerable drop in demand, while the cost of production and employment is increasing and competition from Asian and eastern European industries is stronger than ever,” RIL had said in June last year on its move to file for insolvency of the German firm.
RIL is the largest producer of polyester in the world with production facilities in Malaysia and India and is executing 1.4 million tonnes of Paraxylene capacity at Jamnagar. It is also setting up an integrated 2.3 million tonnes of Purified Terephthalic Acid, 540,000 tonnes of Polyethylene Terephthalate complex at Gandhar, and 360,000 tonnes of polyester filament yarn plant at Silvassa.
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