KSL plans Rs 600 cr expansion

KSL and Industries Limited has planned a Rs 600 crore expansion in its textile production capacities. For funding the project, KSL and Industries will take the benefit of the textile upgradation fund (TUF) scheme of the government of India.

While Rs 400 crore will come as debt under the TUF scheme, the balance of Rs 200 crore will be funded through equity and internal accruals. Of this Rs 200 crore, promoters will contribute almost 25-30 per cent. The company also plans a small public issue to raise the rest of the money.

The company plans to acquire 2-3 plants in Coimbatore with a production capacity of 25,000-50,000 spindles at a cost of Rs 150 crore. It is likely to install an additional 1.5 lakh spindles for manufacture of cotton yarn and fabric processing capacity and garments at its locations at Kalameshwar in Nagpur, Maharashtra.

On the financial front, the company has achieved net sales of Rs 153.62 crore in 2004-05, up 76 per cent over last year's net sales. The company's export business stood at Rs 30 crore in fiscal 2004-05 and is expected to touch Rs 50 crore.

"The company will focus on manufacture high value-added knitted fabrics and garments as part of its future business strategy," said Saurabh Kumar Tayal, chairman, KSL and Industries.

"Value added knitted fabrics are in great demand and yield higher realisations as major buyers prefer it for their premium brands," he added.