S Kumars lines up Rs 130 cr for new plant in Gujarat

The Rs 860-crore textile and apparel company, S Kumars, will invest Rs 130 crore to set up a plant for manufacturing high-value cotton fibre. The plant, with a production capacity of 14 million metres of premium cotton, will come up in Vapi, Gujarat.

The company is expected to appoint Franz Martin Haemmerle, an Austrian cotton technocrat, chief executive officer of the unit.

"All the products will be exported to markets in the developed countries including the US and Europe. So, we needed someone who is aware of the market conditions of these regions," said sources close to the company.

The unit is also outsourcing its designer head and is going to have an European to head its marketing in the continent.

The Vapi plant, whose construction will begin in April 2006, will be operative by the end of 2007. And with this, S Kumars' yearly exports are expected to increase to 6,000 million metres.

This will be S Kumars' fifth strategic business unit after the ones for home textiles, ready-to-wear, consumer textiles and worsted suitings. The new plant's high-end products will have a price tag of $100 to $300 per shirt. An 'average' shirt in the international market costs about $30.

"We are venturing into the high-quality fabric business, and our selling proposition would be high-quality product and superior design, which would distinguish us from our competition," said S Kumars managing director Nitin Kasliwal.

To raise the requisite funds, the company is exploring various options. "We may go in for a GDR or take the FCCB route, and also use internal resources," said the sources.

The new plant is part of S Kumars' Rs 400-crore plans spread over five years. The company will also increase the number of its exclusive retail outlets from 16 to 200 over the period and have presence in over 11,000 multi-brand outlets.

"We expect the turnover to almost double to about Rs 1,700 crore in the next three years," added the sources.