The Hindu Business Line : Aarvee Denims to add capacity; plans garments foray

AARVEE Denims and Exports Ltd, makers of `Amtex' brand of denim fabric, has lined up a capacity expansion of 11 million metres per annum and plans to enter into the garments business during the new financial year.

"We are currently working on adding 11 million metres per annum capacity. The expansion project will be completed by the end of the current financial year. We have simultaneously started work on designing garments and hope to launch our garments brand next year," the Chairman and Managing Director, Mr Vinod P. Arora, told Business Line.

The company is spending nearly Rs 30 crore generated from internal accruals for its expansion. The company, currently, produces 35 million metres of fabric, mostly denim.

While Aarvee Denims is eyeing the garments business, it is also exploring the possibility of a captive power plant to cut its fuel bill. "Power tariffs in Gujarat are killing. We pay Rs 5 per unit and with our daily consumption of 70,000 units (which will go up once the enhanced capacity goes on stream), we are finding it difficult to retain our cost competitiveness. At present, the power cost element in the denim we produce is about Rs 9 per metre, which is clearly not sustainable," Mr Arora said.

The company's weaving unit is located at Narol on the outskirts of Ahmedabad and spinning unit at Bavla, 50 km from here. The company is demanding concessional rates of power in view of its export potential. Aarvee Denims generates about a third of its annual revenues from exports and hopes to take the percentage of exports to nearly 50 per cent in the next couple of years.

The company, which closed 2003-04 with a turnover of Rs 170 crore, hopes to cross Rs 225 crore in sales in the current year. Exports during the current year are expected to top Rs 80 crore, Mr Arora said.

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