The Mukesh Ambani-spearheaded giant is betting big on its polyester business which it feels will benefit from a demand- shift from cotton due to prevailing high prices of the commodity.
"We are seeing fortunes in our polyester business. RIL has witnessed better margins in its polyester business during Q1 FY 08," a top company official said here today.
Rising cotton prices coupled with a decline in the area of sowing is expected to result in improved margins for RIL's polyester business.
"This along with a rejuvenation of the downstream textile industry and a greater thrust towards value-added exports will improve margins for our polyester business," the official said.
In the last one year, global cotton prices have moved up by 23 per cent to USD 1,574 per tonne and is expected to rise further. Higher cotton prices, historically, have resulted in a shift in consumption pattern towards polyester, resulting in better margins for the latter.
The official further said in view of a greater thrust being given to textiles exports by India and China, both countries would now have to look at value-added exports of textiles.
This meant they would have to increasingly rely on polyester exports as rising prices will render cotton uncompetitive, the official said.
News from : The Hindu
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