SEL plans Rs 650-cr technical textile facility

Ludhiana-based SEL Manufacturing Company Ltd has decided to foray into technical textiles including products like hygienic surgical gowns, gloves, masks, geo-textiles, upholstery, artificial leather, carpets, insulation material, wipes, baby diapers and bandages among others.

The facility will come up at a capital outlay of Rs 650 crore, proposed to be injected through term loans, internal accruals and equity. SBI Capital Markets has been mandated to do a financial appraisal of the project.

The new facility will come up in Ludhiana and commence operations by December.

SEL Managing Director Neeraj Saluja said the company had been successful in increasing its top line as well as bottom line due to value additions made in the products in the past one year.

The textile company declared an interim dividend of 10 per cent for 2007-08 and reported a 107 per cent rise in profit after tax at Rs 30.08 crore for nine months ended December 2007, compared with Rs 14.52 crore in the same period last year.

The company's turnover for the period grew 71 per cent at Rs 231.31 crore from Rs 134.79 crore in the corresponding period of the previous fiscal.

Saluja said the export business from Europe, West Asia and Russia provided them cushion against the current rupee appreciation.

The growth had been possible with a mix of expansions and strategic acquisitions, Saluja said.

The company has acquired two readymade garment units and a process house during this fiscal, besides implementing expansions in all the three segments -- readymade garments, knitting and dyeing and spinning. At present, the company is implementing an expansion plan for setting up terry towel capacities, and a captive power plant and enhancing its existing spinning, knitting & dyeing facilities, with a capital outlay of Rs 410 crore.

Saluja said, "With several funds showing interest in the company, the board has decided to issue preferential convertible warrants to certain institutional investors to raise funds for acquisitions and further expansions. With the acquisitions and expansions coming up, we are aiming a top line of Rs 2,000 crore by the year 2010."