Loyal Textiles to expand capacity
By Venkatachari Jagannathan | 30 Dec 2004
Chennai: In line with the industry trend and the expected surge in demand, the city-based Rs232-crore Loyal Textile Mills Limited has decided to expand capacity.
Says the 50-year-old Manikam Ramaswami, chairman and managing director, "We will be investing around Rs60 crore per annum for next four years," he adds.
Manufacturing yarn, grey and dyed fabric-woven and knitted products, Loyal Textiles also makes bed sheets and worker uniforms. This fiscal the company expects a turnover of Rs300 crore.
At a time when many in the Indian textile industry say that India has missed the bus to take advantage of multi-fibre agreement going out, Ramaswami voices a different view.
"International buyers don't want to put all their eggs in one Chinese basket. They know Indian textile industry has the capability to service their needs and are willing to wait for a year or so," he remarks.
One can believe him as Loyal Textiles exports a major portion of its production and also has joint ventures in Italy and Greece. The Italian company, Gruppo and P&P Loyal Spa, is a $12-million turnover company and the Greek company, Loyal Dimco Grouppo S.A, logs a turnover of $2 million.
Ramaswami says the capacity increase by manufacturers is not due to increase in over all market size but due to reduction of capacity in some other market. The immediate past chairman of The Southern India Mills' Association, the current status of the domestic textile industry is good with the government taking several positive steps for the textile industry.
He is optimistic about India becoming a global player in the textile sector and lists out the reasonse. "Many mills are now resorting to contract farming or offer advisory services to cotton farmers. Cotton seed companies are coming out with better seed varieties thereby reducing the use of pesticides — the big cost factor in cotton farming. Cotton yield is also becoming better and the cost of production is going down."
At the industry level, modern process houses are coming up bringing in cost reductions. "For instance, earlier, automatic cutting was not done in a major way as colour consistency was not guaranteed since the piece length was just 60 metres. Now we can get a piece length up to 500 metres. This in turn saves inspection costs," Ramaswami explains.
On the industry trend he states, there will be many job work units in future. "Till now, not many have wanted to undertake job-work for others. They wanted to be independent units. To survive small players can function in clusters."
