Suryalata logs on to Rs 20-crore expansion plan

City-based Suryalata Spinning Mills Limited has embarked on its Rs 20-crore programme for the modernisation and expansion of its two plants located at Kalwakurthy in Andhra Pradesh and Ramtek in Maharashtra.

Speaking to Business Standard, Mahender Kumar Agarwal, joint managing director of Suryalata Spinning Mills Limited, said: "The modernisation and expansion programme, for which the term loans have been obtained, is being taken up with an investment of around Rs 20 crore and will be completed by January 2005."

He said that after the expansion of the two plants, the installed capacity would go up from the present 57,000 spindles to 64,000 spindles.

The company is at present engaged in manufacturing synthetic blended yarns of 100 per cent polyester and 100 per cent viscose ranging from 20s to 60s and black dope dyed yarn. According to Agarwal, the company is also concentrating on the development of value-added products like dyed yarn, rayon yarn and sewing thread.

Agarwal said that the company expects the turnover to rise by 19 per cent to Rs 160 crore during the current financial year. "The increase in the turnover is expected to come from the new export orders," he said.

In 2003-04, the company recorded a turnover growth of 6.69 per cent at Rs 134.47 crore, as compared to Rs 126.04 crore during the previous fiscal.

The company currently exports its products mainly to the European and the Southeast Asian countries. "We are looking at exporting our product range to Brazil also," he said. The company expects exports to be around Rs 35 crore from Rs 18 crore earned during the previous financial year.

Agarwal also said that the company was looking at constructing an ultra modern unit to meet the requirements of the post-2004 situation with the elimination of quota restrictions under the multi-fibre agreements.

"The new unit would be considered only after studying the market conditions next year. This unit would have an installed capacity of 15,000 spindles and would come up in Andhra Pradesh. The plans are still being finalised," he said.

For the first quarter ended June 30, 2004, the company's turnover grew 25.51 per cent to Rs 34.14 crore, as compared to Rs 27.2 crore during the corresponding previous quarter. The net profit for the quarter increased 140 per cent to Rs 96 lakh as compared to Rs 40 lakh earned during the same period last fiscal.

The company's production during the last fiscal was at 1.35 crore kgs of yarn, as compared to 1.37 crore kgs of yarn produced in the previous fiscal. The marginal decrease was due to the replacement of old ring frames by new ring frames.