KSL to acquire units in Punjab

KSL and Industries Ltd, one of the largest vertically integrated textile units in India, is set to expand in Punjab and Haryana.

The company has expressed interest to the governments of both the states to take over the textile units in the region.

The chairman of firm, Saurabh Kumar Tayal, told Business Standard the company might acquire the sick and closed units. The company has a Rs 600-crore expansion plan to be funded through internal accruals. The company has earmarked Rs 50 crore for the acquisition.

The key driver behind the large-scale expansion is the increase in demand for Indian textile products in the global market after the removal of the quotas.

The surplus land and building would be utilised for realty development such as retail malls, residential complexes, hotels and multiplexes. KSL wants to acquire textile units in 'B' and 'C' class cities such as Ludhiana, Chandigarh, Amritsar, Jalandhar, Sonepat, Panipat, and Ambala for realty development.

Tayal told Business Standard, "We will be adding 150,000 spindles to our existing 65,000 spindles for the manufacture of cotton yarn, matching knitting and fabric processing capacity and garments."

The company currently has a spinning capacity of 10,000 tonnes per annum (tpa), 19,000 tpa of knitting with 200 machines, and 10,00 tpa of processing.

Tayal said Rs 300 crore of the Rs 600 crore earmarked for expansion projects will be raised through debt under the textile upgrade fund scheme (TUF) while the balance will be raised through internal accruals.

With an annual export turnover of Rs 30 crore, the company exports to the Far East, West Asia, the US, and the UK. According to Tayal, KSL is one of the largest knitwear groups in India with about 1 million spindles.

Anticipating a revival of the textile sector, Tayal said the foreign buyers looked for vertically integrated suppliers for comprehensive and consistent supplies.

The company fits the bill because it has control over raw materials and can supply its products in the case of delayed shipment. The company registered a net profit of Rs 10 crore in 2004-05 and anticipates Rs 30 crore as net profit in 2005-06.

The company also plans to set up a 100 MW power plant based on hydro power in Himachal Pradesh and Uttaranchal for captive use.