Eastern Silk, the Rs 500 crore silk fabrics exporter, is investing Rs 80 crore to raise production of velvet and jacquard fabrics, in an attempt to get into value-added and fashion products.
The idea is also to move into highend furnishings space.
The effort is expected to culminate into 10-15 per cent higher sales realisation for the company.
The investments would ensure that the company’s production capacity increases to 18.5 lakh metres per annum, up from a capacity of 2.5 lakh metres of autoloom fabrics per annum at present.
According to G Venkatesh, president of Eastern Silk, “The investments are into our Bangalore plant and production should start from May 2009. We plan to get into highend furnishings range which require natural fall and soft fabrics for value-added items.”
Thrust on value-added fabrics is also expected to ensure that the company earns $19 per metre, up from $16 a metre at present.
The home furnishings market, at present, is worth over Rs 1,000 crore, mainly unorganised and growing at 25 per cent a year. In the organised segment, it is estimated to be worth Rs 300 crore, dominated by Bombay Dyeing, Wellspun and Raymond.
ESI is into manufacturing of silk yarn, fabrics and made-ups, fashion fabrics, handloom fabrics, belts and embroidered fabrics.
The company is contributing 9 per cent to India's silk exports, with USA and Europe accounting for 66 per cent of ESI's revenues and Asia the rest. Made-up products are a set of silk products for the bedroom, like a set of pillow-covers, bedsheets, curtains, and other home furnishings.
