Oswals plan Rs 750 cr mill in MP

Investment in two phases over five years * New textile unit to have a thermal power plant

With a view to expanding its capacity in Madhya Pradesh, S P Oswal-promoted Mahavir Spinning Mills Ltd has decided to invest around Rs 750 crore to set up a composite textile mill. This will lift the group's turnover to Rs 3,000 crore.

Mahavir Spinning Mills already has a 100 per cent export-oriented unit, Anant Spinning Mills, in Mandideep (18 km from Bhopal) with.

The new mill will have a 30-MW thermal power plant (the requirement is 22 MW) and an effluent disposal plant (EDP). The power plant will generate at about Rs 2.50 per unit. If required, it will also supply power to the company's unit in Mandideep, which has a captive power plant (furnace oil-based) with an 8-MW capacity.

Speaking to Business Standard, S Pal, chief executive officer of Anant Spinning, said, "A very big unit is coming up. We have applied for land and tax exemptions. The investment will be around Rs 750 crore in two phases over a period of five years."

Though he did not disclose the location of the plant, a company source said, "The plant will be located near Budni (district Sehore)."

The first phase will see an investment of Rs 400 crore, while the rest will be invested in the second phase. "Investment in the first phase will be more because it will involve the purchase of land of 400 acres (one acre is 4,840 square yards), and an effluent disposal plant with a capacity of 6,000 kilolitres per day," Pal said.

The company plans to develop a forest area of 100""150 acres near the plant if the department of forests and the pollution control board allow. "We will dispose of effluent water in the forest area after treatment," Pal said.

The new unit will spin yarn, and weave and process fabric. The group has about 16 units in the country.

Madhya Pradesh State Industrial Development (MPSIDC) Managing Director Raghav Chandra said: "The proposal is good. We have had discussions with executives of Mahavir Spinning, which will duly acquire a plot of land. I hope the investment comes through soon."

The new unit will have a capacity of 35""40 tonnes per day. "The new unit will employ 2,300 people. The Mandideep unit employs 1,200 people," Pal said.

According to company sources, the company had earlier planned to set up the unit in Chhattisgarh or Himachal Pradesh to cut investment costs. Much will depend on the sops and exemptions offered by the Madhya Pradesh government.

The state is yet to set up training facilities for farmers, so that they can handle cotton after cultivation. The state produces a very fine variety of cotton called H4, but by the time it reaches the millers, it is mostly contaminated.

High power cost, the power cess, and the duties on captive power distribution have forced textile units (yarn manufacturers) to consider shifting from Madhya Pradesh. Industry sources say out of 51 textile units, many are in the process of expansion but none is interested in setting up new facilities.

Though the local heads of the companies are reluctant to come forth on the issue, they hinted if the state government did not come up with a concrete plan, fresh investments would move to other states.

Recently, a PHDCCI paper titled "Opportunities and Strategies for Growth""Malwa Region and MP" said a good investment climate in the state could result in an investment of Rs 5,000 crore and employment opportunities for 500,000 people.