Indian Yarns puts in Rs 30 cr in expansion

At a time when most of the Indian textile companies are expanding to tap overseas markets after the end of the quota regime, Chandigarh-based Indian Yarns Ltd has invested Rs 30 crore to strengthen its presence in the domestic market.

The company is adding 12,000 spindles to its existing base of 14,000 spindles. The first phase of expansion is over and 7,000 spindles have been installed.

The company has introduced a new technology to manufacture dyed yarn for which the machinery was bought from China. The second phase of expansion will be completed by the end of this year.

Talking to Business Standard, V K Indrayan, managing director of the company, said Indian textile manufacturers benefited immensely in the post-quota regime. "They in turn benefited our company by creating a demand for synthetic yarn," he said.

Indrayan pointed out that Indian Yarns' expansion was aimed at giving back-end support to the textile manufacturers located in the north, especially in Ludhiana and Bhilwara.

After serving for four decades as a textile engineer in various capacities, Indrayan retired as the joint managing director of Pashupati Spinning Mills.

He set up his own venture at Lalru (30 km from Chandigarh) with the help of equity support from the (Punjab State Industrial Development Corporation) in 1996. The project went haywire for the first seven years due to the stock market muddle of 1995 after which the company was forbidden to raise funds from the capital market and banks also withheld funding.

The company started with 6,500 spindles in 1996. That was half of the proposed capacity. It enhanced its capacity to 14,000 spindles in 2001. Indrayan today holds a 69 per cent stake in Indian Yarns and the balance is held by the PSIDC.

The company's expansion has been funded through the Textile Upgradation Fund Scheme (TUFS) of the Government of India.

The company had a turnover of Rs 65.5 crore in 2005-06 and was expected to touch Rs 80 crore in the next year, said Manu Indrayan, the director of the company. "Dying capacity needs substantial investments and our entire capacity addition is for dyeing of yarn", he added.

The company has allocated Rs 5crore of the investment for a furnance-based in-house power plant.

The factory is spread over an area of 70,000 square yards and provides employment to 450 people. Manu said he would add 150 more people in his team and manufacture a basket of 40 products from the present 25 products by the end of the year.

Saying that 5-10 per cent of the total output was export-oriented and sold mainly in Turkey and Italy, he added that the domestic market was more viable for them.

He indicated that the synergy between the fibre, yarn and garment would be the ultimate goal of the company as they have ample space and bright prospects.