Mumbai, Dec. 9: Reliance Industries is hiving off the textile business that patriarch Dhirubhai Ambani created into a powerhouse in the late sixties and set the foundation for the Ambani empire.

Under the plan, Reliance Industries will be spinning off its textile business, which contributes 1 per cent to the group's revenues, into a joint venture with a Chinese textile player, the $3-billion Shandong Ruyi Science and Technology Group Ltd.

Reliance Industries will hold a 51 per cent stake in the venture, while Shandong Ruyi will hold the rest.

The Mukesh Ambani-owned corporate behemoth said that definitive agreements had been signed with Shandong Ruyi under which the existing textile business will be transferred into a newly-incorporated venture for which RIL will receive a cash consideration. The company didn't say how much it would get.

Dhirubhai Ambani started his textile business when he established Reliance Textile Industries in 1966. In the same year, he established a synthetic fabric mill at Naroda in Gujarat. Later, the company expanded the business through the Vimal brand.

Reliance later went on to adopt a strategy of backward vertical integration and ventured into polyester, fibre intermediates, plastics, petrochemicals, oil and gas exploration and other allied businesses such as petroleum refining and marketing.

Subsequently, the group entered new growth segments such as organised retail, special economic zones and even telecommunications.

As a result of the shift in focus, the contribution of the textiles business to its topline diminished over the years. RIL now clubs it along with 'other businesses' in its financial statement.

When asked why the company was transferring textiles, which played a key role in its history, sources close to the company said the move would help the business to grow.

'Transferring the business to a joint venture will enable it to grow. The joint venture will be a focussed textiles company and Ruyi will bring in its expertise, too,' the source said.

Analysts added that the move may see Reliance transferring the Naroda facility to the joint venture.

The facility makes synthetic textiles and fabrics, apart from woven and knitted fabrics for home textiles, synthetic and worsted suiting and shirting, ready-to-wear garments and automotive fabrics.

Ruyi has a global presence, including in the US, Europe, Japan, Australia, New Zealand and China. Its brands include Taylor & Lodge, Harris Tweed, Royal Ruyi China, Nogara Italy and Indios Italy.

Ruyi also operates in India under the Georgia Gullini brand in the worsted suiting segment of the market.

The joint venture is expected to build on RIL's existing textiles business and wide distribution network in India as well as Ruyi's state-of-the-art technology and its global reach.

This apart, the venture will benefit from the strength of the Vimal and Georgia Gullini brands, even as it will see Ruyi introducing some of its well-known global brands in India.