Fraternity to set up yarn unit

Mohali-based Fraternity Chemicals Specialities Pvt Ltd, the only company in the north merchandising more than 300 varieties of yarn and fibres, is contemplating putting up a manufacturing unit for upholstery with an investment of about Rs 9 crore. The unit will be located in either Silvasa or Baddi, both tax-friendly zones.

Talking to Business Standard, Managing Director D S Sangha said many global car manufacturers had put up units in the past few years. This created a huge market for the car upholstery. But no company in India was manufacturing upholstery for cars and the firms were dependent on imports from Taiwan, Malaysia, and South Korea.

"So there is tremendous potential in the market and we have decided to source raw materials from Reliance," Sangha said. Fraternity Chemicals started business three years ago, and now has a turnover of Rs 10 crore.

The company specialises in merchandising fibres (polyester, acrylic, blends like cotton viscos) and yarn (nylon, cotton blend, filament yarn and acrylics) from the US to India and supplies to several big and small players in the textile sector in India. "We sold yarn worth $5 million and $1 million, from the US and China, respectively, in 40 towns last year," Sangha said.

The company has two warehouses in Mohali and one in Ludhiana, having an accumulated covered area of 30,000 square feet. It plans to add 30,000 square feet more by putting up a warehouse in Ludhiana, which is the textile hub of Punjab.

"We are likely to set up a warehouse in Surat also because Gujarat is a lucrative market for us," Sangha said.

In smaller towns the company has leased out godowns, according to him.

Sangha is optimistic about the expansion of trade with Pakistan and West Asia. According to him, a recent delegation from Pakistan showed interest in import from India.

There was immense potential for the export of filament yarn there because that was used in manufacturing veils (burkhas) worn by women and the mats used in prayer, he said. Since no production of filament yarn takes place there, they depend on import, according to Sangha.

The company is negotiating for exporting to the US acrylic fibre. Textile majors like Vardhman, Reliance and Indian Acrylics will supply acrylic fibre to Fraternity Chemicals for export.

Sangha said the post quota regime brought opportunities for Indian textile manufacturers. The consistency in the quality of Indian textiles has helped attract leading international players to the Indian market.