Suryalakshmi on Rs 20cr expansion mode

Plans to up installed capacity of denim division & spinning division

Hyderabad-based Suryalakshmi Cotton Mills Limited is currently in the process of undertaking a Rs 20-crore expansion plan at its denim and spinning units.

Speaking to Business Standard, Paritosh Agarwal, executive director of Suryalakshmi Cotton Mills Limited, said, "The company is embarking on this expansion programme in order to improve on the export front; especially for the scenario when the World Trade Organisation (WTO)-mandated dismantling of trade barriers and quota restrictions becomes effective in January 2005."

Suryalakshmi has its spinning units at Mahabubnagar and Amanagallu in Andhra Pradesh and the denim plant at Ramtek, near Nagpur.

According to him, the capacity of the spinning division would be increased from the present 70,000 spindles a year to around 75,000 spindles a year. The denim division, which at present has an installed capacity of 20 million metres per annum, would be increased by another 10 million metres.

"Out of the total outlay of Rs 20 crore, Rs 15 crore would be spent on the denim division while the rest on the spinning division and it is expected to be completed by March 2005," he said. The company is looking at raising the required capital from internal accruals.

He also said that the company is looking at further expansion, which would be undertaken next year, after looking at the different requirements of the company.

The yarn dyeing division of the company has the capacity to dye yarns up to 100 tonnes per month. Suryalakshmi, with its integrated facilities, also produces 100 per cent cotton yarn, blended yarns, melange, dyed and fancy yarn.

Suryalakshmi at present exports its denim to 25 countries. The company is also looking at new markets.

Agarwal said that the company expects its exports to cross Rs 100 crore during the current fiscal, as compared to Rs 70 crore in the last fiscal.

For the first half of the current fiscal, the company's turnover registered a 25.22 per cent growth to Rs 83.44 crore as compared to Rs 66.63 crore during the first half of the previous year.

According to Agarwal, the company expects better performance during the second of the financial year because of the falling cotton prices. He said that the company was looking at going into garmenting business.

"Plans are still being formulated regarding this and we expect the plant to come up on the outskirts of Hyderabad," he said.

The company is also in the process of the demerger of its Mahabubnagar unit, which is expected to be completed by March 2005.