Ravi Spinning Mills to invest Rs 80 lakh in upgrade

Amritsar-based Ravi Spinning Mills is planning to invest Rs 70-80 lakh in technological upgrade by the end of this year in the newly set-up unit, situated on Wagah Road. The company has recently set up this unit with an investment of Rs 1.5 crore in building and machinery.

Spread over 3.5 acres (one acre is 4,840 square yards), the unit can produce 18 tonnes of woollen yarn per month, while the existing unit has a production capacity of 15 tonnes of woollen yarn a month. The company supplies woollen yarn to woollen fabric makers and caters for the domestic market only.

Talking to Business Standard, Company Partner Vikas Mehra said, "We have set up the new unit in order to upgrade on technology and cut input costs. Also, we were running short of space on the existing premises, and so we decided to put up new plant on Wagah Road, which has better infrastructure in terms of roads compared to other parts of the city. Also, there is no labour problem there."

In the last fiscal, the turnover of the company was Rs. 4.5 crores, Commenting on the expected turnover in this fiscal he added," Most probably it would remain the same because of intense competition and no surge in demand of woollen fabric in domestic market."

Commenting on the demand of woollen yarn in the domestic market, he said, "The overall market is not growing." There is no surge in demand for woollen yarn or fabric in the domestic market or the overseas market. In international market Indian companies are facing tough competition from China and other European countries which are better in quality than India's."

"Also, the raw material for the spinning mill, which is woollen rag, is imported from Europe, and the finished product (after going through the recycling process it is converted into yarn and finally into tweeds, blazers and blankets) is exported to Europe. Thus, with disadvantages of location, manufacturers have to shell out heavy amounts as freight charges, thus making input costs higher and economically unviable for export."

"In order to survive in the domestic market, manufacturers have to price the product almost 30 per cent less than Chinese and other European products," he said.

There are about 22-24 spinning mills spread around the city, with a total turnover of around Rs 100 crore.