RIL’s German arm files for insolvency

Reliance Industries’ German textile arm, Trevira, has filed for insolvency following business slowdown in Europe. The company makes high-value branded polyester fibres and filament yarns for the apparel, home textiles and automotive industries as well as hygiene and technical applications.

RIL had acquired it in 2004 for 80 million euros. It had grown steadily since and turnover touched nearly 325 million euros last calendar when the recession struck. Trevira has filed an application with the Augsburg Court in State of Bavaria, Germany, for the commencement of insolvency proceedings with a restructuring plan.

The automotive business accounts for 25 per cent of its business with the balance taken up by home textiles and technical ware. European textile manufacturers are currently facing a considerable drop in demand for their products, while the cost of production and employment is increasing and competition from Asian and Eastern European industries is stronger than ever.

Trevira has five production units spread across Germany, Denmark, Poland and Belgium. It is quite likely that it will be left only with three after the recast. Of these, Poland seems a certainty considering that it is a low-cost centre quite unlike the rest which are up against stiff labour overheads.