Textiles manufacturer TT Ltd today said it has sold off its cotton ginning factory and oil mill in Gujarat for Rs 18.75 crore to Pan Agri Export as part of its plan to shift to spinning and garment production.
The company's ginning factory has a production capacity of 600 bales of cotton per day, while the oil mill could process about 100 tonnes of cotton oil per month, TT Ltd said in a statement.
"...Cotton processing is a purely commodity driven unstable business which is dependent on price fluctuations, availability of cotton and cottonseed, viability of crushing and finally, the end use.
"Hence the decision to exit the commodity business and enter into a more stable business like spinning and garmenting," TT Ltd JMD Sanjay Jain said.
The company is currently undertaking a Rs 150 crore expansion plan in the next two years.
As per its expansion plans, the company will be investing Rs 100 crore to increase its spinning capacity at Rajula in Gujarat. It also plans to invest Rs 35 crore for capacity expansion in its garments manufacturing unit at Tirupur in Tamil Nadu.
Further the company plans to invest Rs 15 crore in Gujarat for generating power through wind for captive use.
Jain said the entire proceeds of the buyout would be utilised to part finance the expansion.
TT Ltd is a vertically integrated textiles manufacturer, mainly producing cotton, yarn, fabric, garments and accessories.
Its existing casual apparels production capacity stands at 3 million pieces per month which would be increased by 50% per annum in the next three-four years, Jain added.
