As part of this strategy, the company plans to strengthen its distribution network through better management of its 185 showrooms and substantial increase in its number over the next few years. The company also plans to move up the value chain by introducing readymade garments to efficiently utilise its excellent brand equity and strong distribution network.

Chairman Kumar Mangalam Birla said the company intends to sharpen its focus on the premium end of the suiting fabrics market, given the fiscal advantages and resultant competition from the unorganised sector in the lower end of the market. The company will focus on three businesses: cement, fibres and textiles with the former being the platform to build shareholder value in future, hesaid.

The unorganised sector now accounts for over two-third of the suiting fabrics market in the country and its unprecedented growth and a discriminatory excise duty structure in favour of independent process houses is likely to exert pressure on composite mills like Grasim in future, industry sources said. Introduction of new value-added products is another focus area for Grasim to attain twin objectives of widening its product range and moving towards the high end of the suiting fabrics market which gives better realisation.

The company had already introduced five new product lines with special features last year including stainoff, a stain-resistant collection in pure wool, polywood and poly/viscose blends and wonder wash fabric, a detergent free fabrics where stains could be washed with just hot water.

The textile division of the company accounted for even less than ten per cent of total sales turnover at Rs 359.50 crore in the last fiscal.

Meanwhile, after acquiring the cement operations ofIndian Rayon, the company is setting up a 900,000 tpa cement plant in tamil nadu, which is expected to go onstream during the last quarter of 1999-2000 taking its total capacity to 107.2 lac tpa. This will elevate Grasim the company as the third-largest cement producer in India.