The Hindu Business Line : S.P. Apparels chalks out Rs 150-cr capex plan

In phases
Rs 42 crore investment in the first phase.
The second phase of capacity expansion would be Rs 35 crore.
The processing capacity of the dyeing unit would be 24 tonnes of fabric a day.
Apart from captive consumption purpose, it may export knit fabrics to China, Sri Lanka, Bangladesh.

Coimbatore , June 14

S.P. Apparels Ltd (SPAL), one of the largest exporters of knitted garments, has chalked out a Rs 150-crore capex plan for the current financial year that might also lead to company taking to equity dilution.

The company expects the fabric dyeing unit to help cut down the processing cost, apart from reducing the fabric turnaround time, according to Mr P. Sundar Rajan, Managing Director, SPAL.

Expansion plans

Speaking to newsmen at the Perundurai SIPCOT complex in Erode district, where the first phase of the group's knit fabric dyeing unit was commissioned, he said while the company had invested Rs 42 crore in the first phase, the second phase of capacity expansion would be at an investment of Rs 35 crore and the expanded capacity would be commissioned by the end of the year.

The dyeing unit, when completed, would have a daily processing capacity of 24 tonnes of fabric a day and would be used for captive consumption purpose.

Apart from meeting its own needs, it would help export knit fabrics to China, Sri Lanka, Bangladesh etc.

Investments

He said the company has planned to make a capital investment of about Rs 150 crore during the current year covering capacity addition to the dyeing unit, establishment of a spinning mill at an investment of about Rs 50 crore, investment in embroidery unit etc.

Public issue

Asked whether the company was planning to for a public issue to part fund the expansion plans, Mr Sundar Rajan said while it was an option for fund raising if required, the company has not taken any decision on it.

Asked whether the group has tied up the finances for the Rs 150-crore capex plan, the SPAL MD said that the entire fund requirements have not been tied up.

But the company might look at the option of limited equity dilution through the private placement route to fund its expansion plans during the current fiscal before going for a public issue, he said.