ITOCHU Announces Investment in Acquisition of Lycra (USA) by Shandong Ruyi Science & Technology Group
February 22, 2019
ITOCHU Corporation (headquartered in Minato-ku, Tokyo; Yoshihisa Suzuki, President & COO; hereinafter “ITOCHU”) announced today its participation, by capital investment, in the acquisition of The LYCRA Company (headquartered in Delaware, USA; CEO: Dave Trerotola; hereinafter “LYCRA”) by its capital alliance and business partner Shandong Ruyi Science and Technology Group (headquartered in Shandong, China; Qiu Yafu, Chairman; hereinafter “Shandong Ruyi”). Looking ahead, ITOCHU will work in conjunction with Shandong Ruyi to further increase the corporate value of LYCRA and maximize collaborative synergies.
LYCRA was established as the result of carving out the apparel and advanced textiles operations of US textiles giant INVISTA. The company has established a global presence primarily with spandex (polyurethane elastic fiber), polyester, nylon and various other synthetic fibers used in clothing items. LYCRA owns numerous competitive original material brands including Lycra, Coolmax and Thermolite. Lycra in particular—as the signature brand name for spandex—has penetrated widely throughout the global marketplace since its initial launch in 1958 as a result of its high quality and effective marketing campaigns, and has maintained a highly competitive profile to this day.
Shandong Ruyi was founded in 1972 as a state-owned wool textile factory. Since its privatization in 2001 it has widely expanded its business operations from upstream to downstream, as one of the major textile groups in China. ITOCHU and Shandong Ruyi began trading raw wool from Australia in the 1990s. Since then, the two companies have established an excellent relationship with each other over many years. In 2011, the companies strengthened that relationship further by forming a capital alliance and business partnership agreement. This time, too, in considering its acquisition of LYCRA, Shandong Ruyi requested for ITOCHU to make a joint investment and ITOCHU chose to participate in the acquisition on this occasion in view of the various business synergies which are anticipated as a result of the investment, including the development of environmentally-friendly materials and the expansion of the initiative business.
As one aspect of the Reinvented Business concept, which is the basic policy of its current medium-term management plan, ITOCHU is aiming to expand initiatives with major retailers around the world, by building a value chain based on effective industry-leading control over raw materials as the starting point. ITOCHU regards its involvement in the acquisition of LYCRA as an investment that will contribute to the improvement and enhancement of its portfolio of competitive materials; following on from its development of environmentally-friendly cellulose fibers in collaboration with the Metsa Group, and its recycled polyester business utilizing technologies developed by JEPLAN, INC. (Japan Environment PLANning). Moving forward, ITOCHU will continue working to build an inimitable business model by making effective use of comprehensive capabilities of the ITOCHU Group.
Material brands owned by LYCRA