The Hindu Business Line : Welspun to double terry towel capacity

WELSPUN India Ltd is looking to double its terry towel capacity to 20,000 tonnes and is scouting around for a location in Vapi, Gujarat, to set up facilities.

According to Mr Swapan Nath, Director, Welspun India Ltd and Glofame Cotspin Industries, leading financial institutions had given the plan a go-ahead, but the company had yet to acquire the new plant's premises.

The plant will take care of the increased terry towel production and the company's foray into the home furnishings with the just-launched brand Spaces.Mr Nath said that the company, which set up its Vapi plant in 1993 with an initial capacity of 2,000 tonnes per annum, had increased the capacity to 10,000 tonnes. The capacity addition is to cater to strong demand for its product lines in the US and European Union markets.

The company had decided to focus on the value-added products segment, having moved away entirely from the low-end segment of the terry towels business. Their success in this segment has hinged on the company's emphasis on product innovations, which, Mr Nath said, are now reaping benefits.

Some of the products include the velour towel and sublistatic prints. A sublistatic print is an embossed image superimposed on the towel. The technology is Japanese and the company claims it is the first to have successfully used the technology on towels.

The company had already utilised 99 per cent of the quota permitted to it, and that its share in the US and Canadian terry towels market was about 60 per cent and 22-25 per cent of the European market.

In the US, the company was supplying its towels directly to Wal-Mart and under the Zucchi brand. Welspun has a joint venture with the Italian company Vicenzo Zucchi, which is known for its bath robes and towelling products. Welspun also supplies merchandise to the European market and in India it is marketed under the Welspun Zucchi brand.

Even with the new capacity, the outsourcing of production was a definite possibility as present capacity might not take care of the additional demand. The company currently outsourced 50 tonnes per month, or 600 tonnes per annum, of its terry towel requirements.

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