The Hindu Business Line : Vertex Spinning expansion plans find lukewarm response

The company's proposed expansion plan — business tie-up with an Italian textiles manufacturer — and the park project had been synergised into a new business model.

Kolkata , Nov. 14

Vertex Spinning, which on Monday announced to the BSE that it was developing an integrated textile park at Dhule in Maharashtra, fetched a lukewarm response on Tuesday on Dalal Street.

The stock moved up 2 per cent with a traded volume of 55,958 shares on the BSE, slightly up from the two-week average of 51,533 shares. According to brokers, recent declaration by the company to the stock exchange regarding various expansion plans lacks clarity.

The stock, however, has gained 10 per cent in the last one week and over 49 per cent in the past one month.

JV idea dropped

Responding to Business Line, Mr Suresh Sharma, CEO, Vertex Spinning, admitted that the company had dropped the idea of a joint venture with Maharashtra Industrial Development Corporation (MIDC) for the textiles park and was bringing it up alone.

He also clarified that its proposed expansion plan — business tie-up with an Italian textiles manufacturer — and the park project had been synergised into a new business model.

According to him, through the new model the yarn-making Vertex would graduate to two scales above on the value chain by adding weaving and processing the yarns and supply the semi-finished textiles materials to the Italian partner.

"We are bringing their weaving and processing equipment at a cost of Rs 150 crore and setting them up at a separate unit at the park for the purpose of value addition. We hope to go operational in next two months," Mr Sharma added.

The integrated textiles park at Dhule, being constructed by a separate division of the company, has obtained 400 acres of land at a cost of around Rs 2 crore for 99 years from MIDC.

So far, 120 units have joined in out of a total of 80 SSI units, 100 medium-sized units and five "mega" units (with investments between Rs 40 crore and Rs 250 crore).

MIDC has already built the roads inside the park and the water supply system has been put in place. "The power connection should also be available by the end of this week", Mr Sharma said.

"Vertex Spinning is projected to earn through the textiles park activities Rs 13.36 crore in the first year," he said.