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Anil Sasi

To focus on expansion through acquisition route

New Delhi March 10 Spentex Industries Ltd, the country's largest yarn maker, is working on plans to double its manufacturing capacity over the next couple of years through the brownfield expansion route and acquisition of facilities in the country and abroad.

"We are looking to double our manufacturing capacity to 10 lakh spindles over the next two years. At least for the coming one year, we would be concentrating entirely on expansion through the acquisitions route... Greenfield expansion is more or less ruled out," the Spentex Managing Director, Mr Mukund Choudhary, told Business Line.

He said that Spentex, which had taken over two companies in Uzbekistan last year, is on the lookout to acquire medium to large-sized facilities within the country and abroad.

Spentex, which has a manufacturing capacity of about 5.7 lakh spindles at present, is looking to add 2.5 lakh spindles during the first year.

Currently, the company has eight plants — six in India and two in Uzbekistan. It has a total production capacity of 3.5 lakh spindles in India and 2.2 lakh in Uzbekistan, along with 236 airjet weaving looms.

Takeovers list

Spentex's takeovers include S K Birla Group firm Cimmco Spinners and Indo Rama Textiles Ltd. With the acquisition of Uzbekistan-based Tashkent-To'yetpa Tekstil, Spentex became the country's largest yarn maker in terms of manufacturing capacity, ahead of the Vardhman Group. Talking about its units in Uzbekistan, Mr Choudhary said the acquisitions have started contributing to Spentex's revenues.

Efforts are on to integrate operations among units within the country and abroad and greater synergies would vastly improve overall performance in the coming time, he said.

Acquisition binge

Spentex has been on an acquisition spree over the last three years, buying out the Ahmedabad unit of Taichongbang Textiles Ltd, Indo Rama's units at Nagpur and Indore, Amit Spinning's Kolapur unit and Cimmco Spinner's Solapur unit.

Earlier last year, Citigroup Venture Capital International Growth Partnership, Mauritius, had increased its stake in the company to 32 per cent.

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