K P R Mill, a Bombay Stock Exchange listed company, is planning to invest around Rs 500 crore to expand its spindle capacity and to set up wind farms. The proposed expansion of mill capacity is expected to increase company’s top-line by 40 per cent, which was around Rs 837 crore in the last fiscal. Meanwhile, the company has floated a subsidiary to focus on high end garment market and high valuecustomers. P Nataraj, managing director, K P R Mills Ltd said, currently, the company’s capacity is 212,000 spindles and is planning to add another 150,000, by the way of brown field expansion and through a greenfield facility between Tirupur and Coimbatore.
The new unit is expected to commence its operation in January 2011 and likely to reach the full capacity by May 2011, he said.
“Besides, a modernisation and expansion of spindlage at Sathyamangalam Mills is also planned. These would help us achieve improved productivity and higher margins in the yarn segment from fiscal 2012,” said company’s chairman K P Ramasamy. According to industry observers, once the company adds the capacity its top-line will grow by around 40 per cent. Last year the company has reported a turnover of around Rs 837 crore.
Apart from this, the company is also planning to set up a wind farm that can produce 24 mega watt (MW) of power, with an outlay of Rs 128 crore. The proposed addition will enhance it’s total captive power generation capacity to 64 MW from 40 MW at present, supporting 75 per cent of its power needs.
“Our total investment, in mill expansion and for setting up wind farm, will be around Rs 500 crore,” said Nataraj. The company is planning to fund the project through Debt (70 per cent) and Equity (30 per cent), internal. The Tirupur-based company has reported a 11.5 per cent increase, year-on-year, to reach Rs 837 crore in 2009-10. Its net profit rose to Rs 50.43 crore from Rs 10.10 crore, a year ago.
Acording to K P Ramaswamy, “The improvement in profitability resulted from an improved product mix and increase in capacity utilisation during the year.” He noted, export contribution to the turnover rose to 29.2 per cent to Rs 234 crore in 2009-10 from 25.1 per cent, during the previous fiscal.
The company also promoted Quantum Knits Pvt Ltd, a wholly owned subsidiary, to focus on high end garment market and high value customers. The separate identity is expected to create strategic and administrative advantages over the long run, added Ramasamy.
