'We have sufficient fabric facility'

INTERFACE

Rajiv Dayal, managing director, Mafatlal Denim, talks about the company's expansion plans and says that the company has no plan to enter the capital markets as yet.

Tell us about your expansion plans?

We are taking our total denim fabric capacity to 20 million meter per annum by August this year from the current 10 million meter at our existing plant in Navsari in Gujarat.

Investment earmarked for it is Rs 111 crore, out of which Rs 85 crore have been taken as debt under Technology Upgradation Fund Scheme (TUFS) and the rest through internal accruals.

What made you go for expansion at a time when denim market is doing poor?

It is a fact that European and American markets (making 60 per cent of the global denim market) have become saturated but at the same time there are new emerging markets. We find better prospects in domestic market and other markets such as North Africa, Combodia, Vietnam and other south east asian countries.

What will be your export and domestic sales ratio with enhanced production?

So far it is almost 50:50. But with domestic trend changing in which denim market itself is growing with 10 per cent growth rate, we expect domestic sales to go up, say, 40:60.

Are you considering vertical integration?

As we have sufficient fabric capacity, we will set up a garment facility by the second half of next calender year with an initial capacity of 5,000 pieces per day. We will also look to foray into retails with our own brands.

Where do you see company's topline reaching by 2010?

We hope to see growth rate of 30-35 per cent and in the next 2-3 years our topline will reach around Rs 200 crore from the current Rs 100 crore.

Do you plan to hit the capital market?

For the time being there are no such plans.