Sangam inks Rs 171 cr expansion plan

Sangam India Ltd (SIL), a Bhilwara-based textile company, is planning to invest Rs 171 crore for expanding its existing unit. The company hopes to have more than Rs 500 crore as annual turnover after the expansion.

"We will increase our spindle capacity by 50,000 and also our weaving capacity, by installing more weaving machines," Chairman R P Soni told Business Standard.

He said the whole process would be completed by March next year. The company, with 64,032 spindles at present, has an annual turnover of more than Rs 300 crore.

The company has arranged a Rs 126-crore term loan to fund the expansion. The remaining Rs 45 crore is being arranged through equity and from promoters' accrual. SIL will get a 5 per cent subsidy on the loan amount under the Technology Upgrade Fund Scheme (TUFS) of Government of India.

Soni said the company was expecting "One Star Export House" status in a couple of days. "This would enable us to reap the benefits of the post quota international market," he said.

Under the guidelines given by the commerce department, any company with an export turnover of Rs 15 crore is entitled to "One Star Export House" status and a number of benefits including licence and customs clearance on a self-declaration basis, exemption from furnishing bank guarantee, etc.

Managing Director SN Modani said Bhilwara being one of the largest textile centres in the country, the company was able to sell around 70 per cent of its turnover in the city. "This has helped us to keep expenses low and extend our competitiveness," he said.

Sangam India, one of the largest producers of polyester viscose dyed yarn in the country, has achieved an average compounded annual growth rate of around 30 per cent in the past nine years. The company, aiming at growth through penetrating the export market, reported a 250 per cent export growth during last financial year.

At present, the company produces polyester viscose (PV), blended-dyed yarn, and synthetic fabric in Bhilwara, and its customers include Grasim, Raymond, Siyaram, Donear, and Reid & Taylor.