Visaka Ind plans to set up Rs 80cr cotton yarn unit

Visaka Industries Limited plans to set up a cotton yarn unit by the end of next fiscal. The company is looking at investing around Rs 80 crore in this unit.

Addressing a press conference to announce the company's second quarter results, G Vivekanand, the company's managing director, said, "The plans are under consideration and the cotton yarn unit would most probably be operational by the end of the next fiscal."

According to him, the unit would be set up either in Andhra Pradesh or in Maharashtra because of the good infrastructure facilities available in these two states, apart from the proximity to ports.

"Once we foray into the production of cotton yarn, we may also consider foraying into the production of garments," Vivekanand said.

The company's net profit for the second quarter ended September 30 increased 23.48 per cent to Rs 3.26 crore, as compared to Rs 2.64 crore in the corresponding quarter last fiscal. The income from operations during the quarter grew 25 per cent to Rs 47.86 crore, as compared to Rs 38.34 crore.

The company's spinning division in Nagpur has begun production a month ahead of schedule.

After the completion of the plant's expansion programme that started in February, it is expected to produce around 600 tonnes of yarn a month, which is 50 per cent more than the current capacity.

"Despite the increase in sales, the profits were low because of the reduction in DEPB rates and sales tax exemption getting over to the tune of Rs 75 lakh. With the reduction in DEPB rate the company has renegotiated the export prices and is selling at higher prices in the domestic market and because of this the profit for second quarter was increased 71 per cent to Rs 3.68 crore as compared to Rs 2.15 crore earned during the first quarter of the current financial year," Vivekanand said.

The turnover of the asbestos division for the first half of the current financial year increased 43.27 per cent to Rs 64.41 crore as compared to Rs 44.95 crore earned during the same period last year. The profit of the division increased 33.49 per cent to Rs 8.29 crore from Rs 6.21 crore.

Vivekanand said that the company expects to get environmental clearance for the Tumkur plant next month and hopes to start operations here from April 2005.

The company has also renegotiated with IDBI on interest rates. "The interest rates have been brought down from 13 per cent to 10.25 per cent and would provide a relief of Rs 25 lakh," Vivekanand said.