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LVMH's new luxury hub

World’s largest luxury goods group’s funds head Daniel Piette and regional head Ravi Thakran are in India to identify firms to invest in and, more importantly, to explore the possibility of a shoe manufacturing unit.

, TNN|
Last Updated: Nov 29, 2007, 12.30 AM IST|Original: Nov 29, 2007, 12.30 AM IST
NEW DELHI: If there’s a raging debate on whether India could become a potential hub for luxury product manufacturing, Moet Hennessy Louis Vuitton (LVMH) brass seem to be taking it forward, and how. LVMH global head (investor funds) Daniel Piette is in New Delhi along with South Asia & Middle East head Ravi Thakran to initiate talks with the potential companies to invest in.

Sources say that the company is also looking at a possibility of setting up a manufacturing unit for shoes in the country. They spent last two days talking to companies and consultants to thrash out regulatory issues. When contacted LVMH India group director Vispi Patel confirmed that Piette were here. He, however, chose to downplay the visit.

“They were here to meet different people,” he said and declined that any decision on manufacturing unit has crystallised. “We are looking at India as a strong sourcing destination and that explains our interest in the market.”

This comes close on the heels of the luxury giant’s decision to launch a e500 million private equity (PE) fund in India, by March next year. The company would then begin its investment across different segments. These would include ready-to-wear apparel, watches, jewellery, home furnishing and also leisure. These investments would be mostly in mid-cap companies, Mr Patel added. “We would explore all the sectors that most PE players don’t look at.”

LVMH had launched two similar PE funds in Europe for investments in area of its core competence. And focused on mid-cap companies that offered expertise in those areas. “The focus would largely be the same for India as well. We would also look at investing in existing manufacturer who could offer expertise lets say, in leather,” Mr Patel added.

Earlier this year, Louis Vuitton (LV) reportedly set up a 50:50 JV with South-based maker of high-end leather accessories, Hi Design, to manufacture leather accessories. The greenfield project is looking at setting up a leather manufacturing facility in Puducherry.

India came into LVMH’s radar following the visit of the senior board members late last year, LVMH decided on Pondicherry as the location for its manufacturing base in Asia. Sources say the choice for the plant location wavered between India and Vietnam. Unlike Prada or Gucci, the luxury firm opted for India.

LV’s move is reportedly, part of a global supply chain overhaul to keep pace with market growth. Last year, LV roped in McKinsey & Co to make its manufacturing operations more flexible in responding to the needs of the expanding store network.
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