JBF plans Rs 300 cr expansion

To enhance POY capacity, set up polyester chip unit at Sarigram near Silvassa

The Mumbai-based JBF Industries is on a Rs 300 crore expansion drive, aimed at enhancing the capacity of its partially-oriented yarn (POY) manufacturing unit and setting up a new plant for producing polyester chips.

"The new plant at Sarigram, near the present one in Silvassa, will manufacture polyester chips. It will be operational by March 2006," said B Arya, chairman, JBF.

The Sarigram plant, pegged at Rs 170 crore, will have a production capacity of 2.16 lakh tonne per annum, thereby raising the company's total capacity up to 3.36 lakh tonne a year.

JBF alone contributes half of the domestic production of polyester chips. But, even than more than half of the domestic need is taken care of by imports from countries such as Indonesia, South Korea and Taiwan.

Polyester chip is a solidified polymer used in the production of polyester filament yarn and polyester staple fibre. Yarn made of these fibres is used to make suitings, shirtings and sarees, among other things.

The company is investing Rs 130 crore in expanding its capacity to produce POY, from 60,000 tonne to 1,50,000 tonne by September 2006. "The investment comes under the umbrella of equity and loan," said Arya.

JBF has tied up with Indian Oil Corporation to buy purified terephthalic acid (PTA) from the latter's new refinery at Panipat, which will be operational by March 2006.

Along with monoethelene glycol, PTA is used to produce polyester chips and POY. The company needs about 2.5 lakh tonne of PTA and 1.5 lakh tonne of MEG for its production needs.

JBF is the largest supplier of polyester chips in the domestic market with a dominant presence in textile grade chips and film-grade bright chips. In POY, it is the third largest producer in the country.

The company had earlier announced its maiden international foray "" a Rs 405 crore greenfield plant being set up in the UAE in a joint venture with Ras Al Khaimah Investment Authority. The plant will produce polyester polyethylene(PET) terepthalate resin.

JBF is investing almost Rs 350 crore in the overseas unit, which is focused on the US and Europe markets. The company has a buyback option in three years. "We should start production by the fourth quarter of 2006," said Arya.

ON A ROLL

JBF contributes half of the domestic production of polyester chips, used in the production of polyster filament yarn and polystr staple fibre

The company had earlier announced its maiden international foray "" a Rs 405 crore greenfield plant being set up in the UAE