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Our Bureau

New Delhi , July 28

MALWA Industries, a part of the Rs 550-crore Malwa Group of Oswals, said that it was executing a Rs 480-crore expansion plan, including the takeover of two overseas denim manufacturing firms.

The company, which is targeting a four-fold increase in turnover at Rs 600 crore over the next three years, plans to use the increased capacity to cater to the mid-segment market in Europe and the US. The Ludhiana-based textile firm is also betting on its new product Indigo Wool to add another Rs 1,000 crore to the company's revenue by 2008-09.

It plans to acquire a Jordanian facility, with a capacity of 40 lakh pairs, by next month at a cost of Rs 45 crore. The company plans to buy out an Italian company by October for another Rs 35 crore, its Managing Director, Mr Rishi Oswal, said.

"By October, we will become the biggest integrated denim (from fabric to jeans) player in South Asia and will rank among the top-five Asian giants with our expansion plans," he said.

Besides the acquisition of the two foreign facilities with combined capacity of 60 lakh pairs of jeans to cater to mid- to upmarket segment in Europe and the US, the company would also expand its denim fabric capacity from 15 million metres to 40 million metres by 2007-08, he said.

The company plans to fund a significant portion of the expansion plan from its internal resources, he added. The company had reported a cash profit of Rs 29 crore over a turnover of Rs 140 crore during 2004-05. Keeping its options open for furthering growth, Mr Oswal said, "We are open to other acquisitions. Our debt-equity ratio is very good at 0.7:1 and with net worth of Rs 100 crore expected by current year, we are in a comfortable position."

Ruling out any immediate plans for a public issue, he said that the company would take recourse to raising debt. "We are managing our debt at over three per cent after availing five per cent concession through the Textile Upgradation Fund Scheme. We may need more cash and feel the necessity to go public in case we acquire something bigger in the global market," he said.

On Indigo wool, he said that the product was a reinvention of a 4,000-year-old Indian process, wherein fine-quality wool was dyed with Indigo to give the final product a denim look. The company had showcased the product in the European market earlier this year and also initiated the process for worldwide patenting of the product, he said. It plans to invest Rs 275 crore by 2007 for production and development of the fabric, he said. The fabric could be used in any season, contrary to the perception in India that wool could not be worn in summers.

Of the total denim capacity, nearly one-fourth would be earmarked for Indigo wool, he said, adding that the product alone is expected to account for a turnover of Rs 1,000 crore. This, he said, could take the total turnover of the company to Rs 1,600 crore by 2008-09.

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Oswal's Malwa embarks on Rs 480-cr expansion drive

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