After Arvind Limited, Ahmedabad-based Nandan Exim Limited may soon become the second largest denim fabric manufacturing company post its expansion plans by 2013-14.
At an investment of Rs 250 crore, Nandan Exim, the denim arm of textile conglomerate Chiripal Group, will be expanding its denim capacity from 60 million metres per annum to 100 million metres per annum.
Currently, in India, Arvind Limited has the largest denim fabric manufacturing capacity of 110 million metres per annum.
"We might become the second largest denim player in India once the expansion gets completed next year. We are looking at newer overseas markets apart from domestic to channel the additional capacity. In terms of sourcing funds, while Rs 185 crore will come from debt, the rest would come from internal accruals," said Deepak Chiripal, chief executive officer of Nandan Exim Limited.
"Nandan Exim might become the second largest denim maker in India if it commissions the additional capacity by 2013. However, there are other players in the offing who, though they are going slow on their expansion plans, might step up in next 2-3 years," said PR Roy, senior denim expert and textile consultant.
Recently, the company has tied-up a finance of Rs 175 crore from a consortium of banks including Union Bank of India. According to Chiripal, the capacity expansion plans of Nandan Exim has been augmented by the recently announced textile policy by Government of Gujarat (GoG).
"Apart from central government's TUF scheme, the Gujarat government has also come-out with the scheme to boost up the textile sector wherein 5-7 per cent interest subsidy and VAT refund to the extent of investment in plant and machinery and Re 1 per unit power subsidy.
This has supported our expansion plans to touch 100 million metres denim manufacturing capacity," Chiripal added. Having registered revenue of Rs 573 crore and net profit after tax of Rs 19 crore for the financial year 2011-12, Nandan Exim is looking to cross the Rs 1,000 crore mark by 2014-15, on the back of expanded capacity.
