Textile park to start operations by year-end

Total cost of Hyderabad Hi-Tech Textile Park project to be over Rs 100 crore

The Hyderabad Hi-Tech Textile Park being set up by the Andhra Pradesh Powerloom Weavers' Association (APPWA), on the Bangalore highway at Kottur in Mahbubnagar district, is expected to commence its operations by the end of the year. It will export cotton fabrics and readymade garments.

Keeping in view the enormous opportunity for textile exports at the end of the quota regime in January 2005, a group of 40 entrepreneurs from the city, associated with the APPWA, came together last year to set up the park.

Ghanshyam Sarode, president of Hyderabad Hi-Tech Textile Park, told Business Standard that the total cost of the project was envisaged to be over Rs 100 crore.

The park would deploy state-of-art infrastructure like modern shuttleless looms in addition to pre- and post-weaving facilities. A modern processing plant would also be set up at the park at a cost of around Rs 80 crore, he said.

Sarode said that around 80 acres had already been acquired at a cost of around Rs 2 lakh per acre at Kottur since September last. Fifty acres more are being acquired.

The park will have developed plots for twisting, doubling, yarn dyeing, warping, sizing units and master weavers, besides customised work sheds for the units.

It will also have common infrastructure facilities like export house, exhibition centre, effluent treatment plant besides basic amenities of roads, power, water etc.

The infrastructure costs alone would be around Rs 34 crore to make the park a zero pollution facility. The central government would provide around Rs 20 crore under various schemes, while the members would spend around Rs 3 crore towards the land.

The park would be eligible for a grant of Rs 5 crore from the state government. The remaining Rs 6 crore is being sought from the state government itself.

As states like Maharashtra and Gujarat are liberally extending financial assistance in view of the importance of textile exports, the park directors recently called on chief minister Y S Rajasekhara Reddy and apprised him of the project needs.

The chief minister had favourably responded to their plea, Sarode said. A project report, being prepared by Andhra Pradesh Industrial Technical Consultancy Organisation Limited (Apitco), will be submitted next week to the textiles committee functioning under the ministry of textiles.

Sarode said that a pilot project of the park would be shortly launched with 50 looms, each costing around Rs 10 lakh. The looms to be imported from Germany would meet the stringent standards of textile importers in the US and the European Union (EU), he said.

The state government had already extended Rs 10 lakh to start the works. Talks were on with banks and financial institutions for loans, he said.

In the first phase of the project to be completed within the first year of operations, around 500 looms are planned to be set up. The park will approach trading partners as well as venture capitalists for tying up the funds. Under the second phase likely in the second year, a state-of-the-art processing plant will also be set up.

As part of the backward integration efforts in procuring quality raw material (yarn), the park is also in talks to set up a spinning park on its own or inviting like-minded entrepreneurs, Sarode said. The park has an ambitious target of setting up a total of 1,500 looms by the year 2007, he said.

On the competitiveness of India in the world garments trade, Sarode said that a high-quality shirt would cost upwards $35 whereas India would be able to produce the same quality shirt at one-fifth the cost.

The government's new textile policy targets textile and apparel exports of $50 billion by 2010 from the present level of $12 billion. Of this, the garment exports are targeted at $25 billion as compared to the existing $6.2 billion. This is a feasible target, provided both central and state governments encourage the exports sector.

Textiles outsourcing would be a great opportunity in the post-quota regime with several US textile manufacturers looking at ways to cut costs. A skilled employee is paid $20 per hour in the US, as compared to far cheaper monthly salary of around Rs 6,000-7,000 paid in India, Sarode added.