The Hindu Business Line : Tirupur co buys Sanmarco from Italian firm Finlane

Changing over
Mehala group has acquired Finlane group’s 99.11% stake in Sanmarco Texmac Private Ltd.
Post-takeover, Sanmarco, in addition to its export focus, would seek to widen its capacity use for domestic textile machinery segment.

G. Gurumurthy

Coimbatore, July 14 The Tirupur-based Mehala group, which has business interests in marketing readymade garment textile machinery, has taken over a running textile machinery manufacturing plant owned by Italy’s Finlane group for an unspecified sum.

The Rs 350-crore turnover family-held Mehala group represented by its Chairman, Mr C. Subramaniam, has acquired the entire Finlane group’s 99.11 per cent stake in Sanmarco Texmac Private Ltd.

Sanmarco is a modern textile machinery-making unit located at Kalangal (Sulur), 30 km from Coimbatore, producing worsted fibre spindles for the woollen and synthetic textile industry.

The take-over formalities, according to Mr Subramaniam, was initiated three months ago and completed early this month.

Mr Subramaniam and other top Sanmarco officials, at a press briefing held here, refused to divulge the details on the consideration for the takeover of Sanmarco.

They, however, maintained that all the takeover codes as stipulated by the RBI were followed.

The entire funds needed for the acquisition were met internally by Mehala, though some venture capitalists were keen to support the deal.

Sanmarco, set up as a greenfield textile machinery plant in 1996, was largely concentrating in machinery components manufacture for its parent company to be supplied to European consumers.

Hence its capacity suitable for domestic woollen/synthetic industry in India could hardly be exploited though some of the man-made/woollen textile majors such as Raymond and Oswal were placing machinery indents with Sanmarco.

The under-utilisation of plant’s capacity due to slower orders from Europe led to Sanmarco posting loss. Hence, the promoters were forced to find a suitable buyer. Mehala group, besides its distribution of international textile machinery used by the integrated garment manufacturers, is also involved in joint ventures to produce machinery components and accessories under its flagship Mehala Machines India Ltd.

Modern foundry

Currently Mehala is setting up a 250 tonnes per month capacity modern foundry and it is expected to go on stream in two months.

Sanmarco’s manufacturing base especially its machine shop floor would enable Mehala emerge as a strong textile machinery outsourcing point in the region, said Mr Dharani, Director of Sanmarco.

Post-takeover, Sanmarco, in addition to its export focus, would seek to widen its capacity use for domestic textile machinery segment.

The company is likely to get order from Mehala’s existing German principal OEM manufacturer, Assyst Bullme, who may use Kalangal’s plant capacity to produce automatic spreading and cutting machinery used by the garment industry.

The other potential businesses on the Sanmarco card are job orders from Italian textile machinery label, IEMCA, SCM and German knitting machinery manufacturers Terret.

Besides its core textile machinery marketing and distribution, Mehala group has also two textile spinning units accounting for a 60,000 spindle capacity and the group is also planning to expand its spindle capacity beyond one lakh by adding another 50,000 spindles, according to Mr Subramaniam.

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