Textile firms line up Rs 8,500cr for expansion

Textile companies are embarking on a Rs 8,500 crore expansion and modernisation plan to capture the emerging global opportunities.

At least 50 small, medium and giant size textile firms which manufacture yarn, fabrics and readymade garments have proposed to double their production in the next two years

Despite this investment, the industry still has a long way to go to exploit the upcoming opportunities. According to a recent KSA Technopak survey, 'Textiles and Clothing Investment Confidence Index (TCICI)', mentioned that textiles and clothing industry needed a capital boost of $15-16 billion to be able to touch the $30-40 billion export mark by 2010.

The survey, however, pointed out that around $3-4 billion investment was slated in next four-five years.

Annual reports of the 50 companies show that the expansion plans will be funded through internal accruals and debt. The proposed investment will increase spinning mills' capacity by 7.54 lakh spindles by 2007-08.

The denim capacity will be up by 62 million meter, fabric capacity by 4 million meter and polyester yarn capacity by 6.15 lakh tonne per annum.

About Rs 500 crore will be spent on setting up retail showrooms. Besides, a few companies are even planning to set up captive power plants.

KSL & Industries Ltd leads all as it plans to invest Rs 600 crore over next two years. The company plans to expand its cotton yarn capacity by 150,000 spindles.

It also plans to set up a captive coal-based power plant at Kalameshwar, Nagpur. Bombay Dyeing, Century Textiles, KSL Industries, SRF and Suryalakshmi Cotton are planning over Rs 500 crore each.

Abhishek Industries, Eskay K'nit, Jayabharat Saree, Nahar Industrial Enterprises and Visaka Industries are planning to invest over Rs 200 crore each.

Century Textiles proposed Rs 140 crore expansion of denim plant to produce 10 million metres of fabrics per annum.

Among others, Suryalakshmi Cotton Mills plans to invest Rs 200 crore for expansion of Denim capacity from 25 million meters to 40 million meters per annum.

It has proposed to create a ring spinning facility of 25 metric tonne and increase its spinning mills capacity by 32,000 spindles.

SRF has approved projects to add 7000 tonne of fabric capacity and set up a new 14,600 tonne nylon-6 fibre plant.