Business Daily from THE HINDU group of publications
Sunday, Jul 01, 2007
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Business Daily from THE HINDU group of publications Sunday, Jul 01, 2007 ePaper |
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Alliances & Joint Ventures Lenzing, Modi Group in pact for viscose plant
With India plant, Lenzing hopes to strengthen presence in South Asia. Rising per capita consumption of textiles, healthy GDP reasons for entry. Plant to have annual installed viscose fibre production capacity of 80,000 t.
L.N. Revathy Coimbatore, June 30Austria-headquartered Lenzing Group, a major in cellulose fibre technology, has joined hands with the Indian Modi Group for setting up a viscose fibre manufacturing facility at Patalganga near Mumbai. The project, which is expected to come up at195 an estimated investment of $200 million, would have an annual installed viscose fibre production capacity of 80,000 tonnes. The production, according to Mr Friedrich Weninger, Vice-President and General Manager, Business Unit (Textile Fibre), would commence after a two-year construction period in 2010-11. Without disclosing Lenzing’s stake in this project, Mr Weninger said the Group would be responsible for running the operations in India. The Group has invested in manufacturing facilities across Europe, Austria and one each in the UK, China, Indonesia and the US. With the establishment of Lenzing Fibers’ first branch in this textile hub, the Group is hoping to strengthen its presence in South Asia. Consumption trigger
Substantiating the Group’s entry, he said: “It is not just the people, but the rising per capita consumption of textiles and healthy GDP growth.” Citing a study, he said: “The per capita consumption of textiles in India is expected to grow from 19 metres/head to 32 metres/head by 2010.” According to Mr Weninger, Lenzing branded fibres would be used by the Indian mills to produce fabrics and garments, both for the export and domestic market. “Estimates show that the cellulose fibre demand in India would increase to more than 5-lakh tonnes by 2010 and double to over 10-lakh tonnes within the next decade.” The country’s cellulose fibre consumption at present hovers around 300 tonnes. The company, he conceded, was aiming to increase its market share substantially, albeit being selective in choosing customers. Volumes
On production, he said Lenzing would initially focus on production of viscose fibre by importing wood pulp. The company’s viscose staple fibre (VSF) turnover volumes (in India) tended to double during the current year from about 4,000 tonnes in 2006. “We are expecting the VSF volumes to double year-on-year. The demand for speciality product range such as Modal and Tencel is also growing,” he said. Replying to a query on the steep rise in the VSF price levels, Mr Weninger said: “The rates have not been triggered because of the demand, but rather due to the steep rise in the cost of wood pulp, which is the major input. I do not see any reduction in the rates this quarter.”
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