Nahar weaves Rs 814 cr spread

The Ludhiana-based integrated textile player Nahar Industrial Enterprises (NIEL), part of the Rs 2,000-crore Nahar Group that has diversified interests in textiles and sugar, is investing Rs 814 crore over the next two years to expand its manufacturing and retail activities.

It is also floating a wholly-owned subsidiary, Nahar Retail to have a more focused view on the country's fast growing retail sector.

The new subsidiary will also include NIEL's garment manufacturing and retailing businesses as well as the Cotton County brand that was launched in 2005.

"We want to increase our presence in the growing retail space and have a specialised focus on retail. We will add 60 exclusive franchise outlets of Cotton County in the next three months from the present strength of 110 outlets," said Kamal Oswal, director, NIEL.

Oswal added, "We will have 250 outlets by the end of this financial year and our long term plan is to open 1,000 outlets by March 2010 on a pan-India basis. We are already in talks with builders for locations in malls and high street locations."

Apparel retailing forms the largest chunk of organised retail in the country with a share of 39 per cent, according to KSA Technopark data.

The sector is set to spring-board in a big way with heavyweights such as the Reliance Group, the Tatas, the Aditya Birla Group and the Bharti Group set to enter the large retail format sector.

Of the Rs 699-crore turnover that NIEL achieved in 2005-06, the retail business contributed a mere 5 per cent, but is expected to grow at 300-400 per cent over the next few years.

"We expect the retail business to bring in Rs 100 crore revenue this financial year. This should quadruple to Rs 350-400 crore in the next financial year," said Oswal.

NIEL's expansion plans will also include a significant addition to the existing capacity. Output of processed fabric is expected to go up from 1,15,000 metre per day to 2,00,000 metre per day, while that of readymade garments will double to 4 million pieces per annum by March 2008.

The company plans to fund the various expansion plans by various methods, which include, a mixture of loans via the government's Technology Upgradation Fund Scheme, foreign commercial borrowings and internal accruals.

It is also setting up captive power units at Lalru in Punjab and Bhiwadi in Rajasthan, which would increase its power generation capacity from 21 mw to 74 mw.