The Hindu Business Line : K.P.R. setting up composite mill

THE demand being witnessed by the cotton textile industry, both for cotton yarn and for garments, is here to stay and after the dismantling of the quota system, there are a lot of opportunities for export of garments and cotton yarn, according to Mr P. Nataraj, Managing Director, K.P.R. Mill Pvt Ltd, Coimbatore.

While K.P.R. Mill has no immediate plans to go for contract farming of cotton, he says that it will look at the option at a later stage.

Speaking at a press conference, he said the group was establishing a composite mill with a capacity of 1,00,000 spindles at an investment of Rs 370 crore at Arasur to capitalise on the increasing demand for garments and cotton yarn. While 25 per cent of the capex was being met from internal accruals, the balance would come as loan.

He said the KPR group, which has presence in spinning, weaving and knitted garment segments, wanted to create a brand image for its products. The company was supplying garments to some of the big international companies like GAP, WAL-MART, CARRE FOUR and JC PENNY. It wanted to make an impact on domestic market also.

Mr Nataraj said his group had recently commissioned a new composite mill at Neelambur near here with about 51,000 spindles that also has a knitted garments division. During the current fiscal, he expected this new unit to generate revenue of about Rs 350 crore, of which Rs 200 crore would be from exports.

The company has identified land at Arasur for the establishment of a composite mill with a spinning division of one lakh spindles and an open-end spinning division of 4,000 rotors. This project was estimated to cost Rs 370 crore and it would be funded with a mixture of internal accruals and loan. While the open end spinning division would go on stream by the end of this year, the spinning division would begin production in phases from September 2006. When it becomes fully operational, it would help the group double the capacity of knitted garments to 2 crore pieces per year.

Mr C.R. Anandakrishnan, Executive Director, explaining the reasons for the group locating its new production facilities close to Coimbatore when several others have opted for areas like Dindigul district, said the group's mills posed no pollution hazards as they had sophisticated machinery and were environment friendly with enough safeguards in place.

Mr M. Kasilingam, Financial Advisor to the group, said the group turnover was expected to go up to Rs 550 crore during the current fiscal from Rs 342 crore of last year.

Once the Arasur plant reached the full capacity, the group turnover would go up to Rs 850 crore.

He expected the group turnover to reach Rs 1,000 crore by 2007-08.

Asked whether the company was looking at entering into contract farming of cotton, Mr Nataraj said while there are no immediate plans for it, the company may look at it later as part of its new plans.

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