SP Apparels chalks out Rs 150-cr expansion plan

In order to ramp up its production capacity and to garner more revenue on the export front, S P Apparels, a knitwear manufacturing and exporting company, has chalked out a Rs 150-crore expansion plan which envisages backward integration of its knitted garments with its own dyeing facility.

"To meet the increasing demand for garment shipment to the US market and to reduce the lead time in our production process (to five days from the earlier 20-25 days), we have decided to go for backward integration and create our own dyeing facility for knitted garment production," said P Sundar Rajan, managing director of S P Apparels.

On the sidelines of inaugurating its knit fabric dyeing unit at the Sipco Industrial Estate, Perundurai, P Sundararajan, managing director of S P Apparels, said the company planned to set up another dyeing unit in the phase II operations, besides establishing a spinning unit and commissioning windmills.

The first phase of the project which covers the dyeing unit at Sipcot, has been set up at an outlay of Rs 42 crore. The capacity of this unit is 12 tonnes per day. This is expected to double by the end of this calendar year.

Work on the second phase, involving an investment of Rs 35 crore, is also in progress. It was expected to go on stream by the end of this year, Rajan added.

The company's capacity expansion plan includes setting up a 25,000-spindle spinning unit at Thekkalur near Avinashi, at a cost of Rs 50 crore, which will ensure quality yarn supply for captive consumption.

The company already has three spinning mills with an installed capacity of 56,000 spindles, which manufacture cotton yarn in both low and high counts.

S P Apparels also plans to scale up its dyeing capacity from the present five tonnes a day to 20 tonnes a day by the end of 2006. It also plans to commission a 5-mega watt windmill for its own captive power consumption.

"Currently, energy accounts for 17 per cent of the total expenditure. We expect to cut down this by at least 8-10 per cent after erecting the windmill," according to Stanley Jothiraj, chief financial officer.

The company hopes to achieve a turnover of Rs 275 crore during the current year with exports alone contributing Rs 250 crore.