Supreme Yarns to invest Rs 204 cr on expansion

Supreme Yarns Ltd, one of the oldest players in cotton, synthetic and blended yarn in Punjab, is set to expand by investing Rs 204 crore. The project will be funded through institutional lending of about Rs 150 crore and market borrowings of about Rs 50 crore. The expansion will be spread over two years.

Chairman Ajay Mahajan said in a press conference spinning and dyeing capacities would be enhanced and the firm would diversify into knitting and garment manufacturing.

He told Business Standard this was the ideal time for Indian textile manufacturers to expand as the global demand was very high.

He said the new projects would be a 100 per cent export-oriented unit. The company exports 25 per cent of its output. "We are selling in Canada, Italy and South Korea and plan to foray into the US and European markets."

The board of directors also announced a 10 per cent maiden dividend. The company was set up in 1996. "We were consolidating and adding to capacity additions till now and this is for the first time that the shareholders have earned a dividend of Rs 6.8 per share," he said.

"In the past ten years, we have created a strong infrastructure base to produce any kind of yarn (cotton, polyester, viscos) their blend and dyed yarn. We also have the capability to manufacture new products at a very short notice," he said.

About 2,000 skilled and semi-skilled workers will be hired after the expansion, raising the number of employees to 3,000.

Giving details of expansion, he said of the Rs 204 crore, Rs 120 crore would be invested in the enhancement of spinning capacities, Rs 60 crore to set up a composite unit to manufacture knitted garments for export markets, Rs 15 crore for the expansion of dye house and the balance Rs 5 crore for the upgrade of the existing spinning plant.

The promoter has a 60 per cent share in the company. The Punjab State Industrial Development Corporation has a 15 per cent stake and 25 per cent are retail investors.

After the completion of expansion process, the asset base of the company would be close to Rs 260 crore and turnover about Rs 500 crore with almost 40 per cent of it coming from the export of yarns and knitted garments.