Raj Rayon Industries is a polyester yarn manufacturer that turns petrochemicals into the thread that becomes your clothes - and it does so from a position few rivals can match. The company was founded in 1993, collapsed into insolvency by 2020 under a pile of debt and obsolete machinery, and was rescued in 2021 by SVG Group, a textile house with over four decades of experience that scrapped the old equipment, invested Rs 306 Crores, and restarted production in January 2023. The recurring approach is vertical integration without the middlemen: RRIL makes the yarn from raw chemicals at one end of the SVG chain, and SVG’s factories weave, knit, dye and stitch it into finished garments for brands like Skechers and Adidas at the other - a molecule-to-garment pipeline that captures margin at every step. # Business segments Two businesses that feed each other - a polyester yarn manufacturing engine that supplies India’s textile heartland, and a small trading operation that fills gaps in the product range. ## 1. Polyester yarn and chips: the manufacturing core **One of only 14 plants in India that makes yarn directly from chemicals rather than buying intermediate chips - a structural cost advantage that competitors cannot easily replicate.** - **Direct melt, not chip-buying** - the plant runs continuous melt polymerisation, reacting PTA and MEG (about 81% of raw material cost) into molten polyester that flows straight into spinning machines, while 26-30 competitors must buy solid chips and re-melt them, carrying an extra cost layer. - **Three products from one polymer stream** - the molten polymer is either chipped and sold as polyester chips, or spun into Partially Oriented Yarn (POY, the workhorse yarn sold to weavers), or further texturised in-house into Drawn Textured Yarn (DTY, a softer, stretchable yarn that commands a higher margin than POY). - **Specialty yarns for premium markets** - the plant produces value-added variants including Dope Dyed (colour baked into the polymer, eliminating downstream dyeing and water use), Full Dull, Super Fine, Super Coarse, Micro Fibres, and Twisted yarns, targeting automotive and export customers who pay a realisation premium. - **Expansion is cheaper than starting fresh** - the 900,000 sq ft factory shell is already built with civil costs sunk, so adding capacity - currently underway toward 700 tonnes per day of polymerisation - costs 30-40% less than a greenfield project because only equipment needs to be installed. - **Raw material costs passed through** - products are priced at a conversion margin above the prevailing PTA and MEG market price, so when input costs swing, the margin is protected and the customer bears the commodity risk. ## 2. Trading: filling the catalogue gaps **A small ancillary activity that buys and resells yarn the company does not manufacture itself, keeping customers from going elsewhere.** - **Plugging product-line holes** - when customers need yarn types or specifications that RRIL’s own plant does not produce, the trading desk sources them externally and resells, ensuring the company remains a one-stop supplier. - **Customer retention, not a standalone business** - trading accounted for roughly 1% of revenue in the latest year, serving as a complement to the manufacturing core rather than a profit centre in its own right. # Group structure and partners **RRIL is the upstream yarn-making arm of SVG Group, a privately held textile house whose downstream factories turn RRIL’s yarn into fabric and garments for global sportswear brands - creating a captive demand pipeline that de-risks the yarn business.** - **SVG Fashions is the 85% owner** - SVG Fashions Private Limited holds 84.88% of RRIL’s equity, with the promoter group collectively at nearly 95%, and also holds preference shares convertible into equity at the promoter’s option within seven years. - **Three factories, one chain** - RRIL’s Silvassa plant handles polymerisation, spinning and texturising; SVG’s Daman and Ankleshwar facilities handle weaving, knitting, dyeing, printing, embroidery and garmenting, with annual downstream capacity including 4 crore metres of fabric processing and 12 lakh ready-made garments. - **Brand relationships validate quality** - SVG Fashions supplies Skechers, Adidas, Puma, and Reliance Retail, so the quality standards demanded by these brands flow upstream to RRIL’s yarn specifications and ensure steady order volumes. - **Acquired from insolvency with a clean slate** - SVG acquired RRIL through the NCLT process in 2021, settling all legacy creditors with Rs 80 Cr in total payments and infusing Rs 124.9 Crores in promoter funding; zero pre-acquisition liabilities remain.