Shri Lakshmi Cotsyn to invest Rs264 crore in expansion
13 Jul 2005
New Delhi: Kanpur-based textiles major Shri Lakshmi Cotsyn Limited (SLCL) announced its investment plan to enter the lucrative denim and, terry towel, bed linens and cotton rich segment.
The
company will invest Rs264 crore over the next 12 months
on its new project. The funds will be raised through a
combination of equity capital, internal accruals and FI
funding. The proposed expansion will enable the company
to achieve a turnover of Rs646 crore from Rs282 crore
in the first year of operation in 2006-07 at 60 per cent
capacity.
An established manufacturer in the blended fabrics, quilted fabrics, fusible interlining and embroidered fabrics market; SLCL feels that its entry into the denim segment will contribute around 10 per cent to the company's bottom line.
According to Dr M P Agarwal, chairman and managing director, " The Company hopes to leverage the removal of global textile quotas by setting up new capacities in the buoyant denim and cotton segments. The land measuring 48 acres for the project has already been acquired and civil construction is in full swing. Besides firm contracts for all major imported and indigenous machines have already been finalised. The proposed product line like denim, wide width sheeting, cotton suiting and terry towel, have great demand in the domestic market as well as internationally".
After
implementation of the new project the company's total
capacities will be to the tune of 62.5 million meters,
generating revenue of more than Rs1000 crore at optimum
capacity utilisation. Of this, approximately 50 per cent
of the produce will be earmarked for the export market.
Added Dr. Agarwal," Currently the international market
for the existing product range is UAE and African subcontinent.
The proposed products however will target niche markets
in the US and Europe". The Company has drawn up plans
to enter into strategic alliances with large buyers within
and outside India and expand its dealer network.
The abolition of the quota system has resulted in availability of new markets for sale, closure of industrial units in the US and other countries due to non-competitiveness owing to lack of cost advantage and subsequent increase in demand of the products internationally. In line with the requirements of the international markets, the Company proposes to equip its production facility with state of the art Rope Dyeing technology for Denim and technologically superior machinery for other products to adapt itself to international buyer requirements. The Company will also enjoy a significant cost benefit compared to its counterparts because of agro based captive power generation resulting in lower cost per unit, cheaper manpower, lower cost of project, etc.