The Hindu Business Line : Nakoda Textiles plans Rs 333-cr capex

Ahmedabad, July 3 With polyester demand expected to grow over the next few years, manufacturers such as Nakoda Textiles Industries Ltd are gearing up to increase the production and refine processes.

“The demand for polyester has been growing at 12 per cent for the last few years. According to a Crisil report, it is expected to grow at 9-10 per cent during the next five to seven years,” said Mr Babubhai Jain, Chief Executive Officer and Managing Director, Nakoda Textiles, in an interview with Business Line.

The Partially-Oriented-Yarn (POY) and Fully-Drawn-Yarn (FDY) manufacturing company has lined up Rs 333 crore to be used over the next 18 months for forward and backward integration of its texturising plant at Karanj, near Surat. Currently, the company is selling POY in the market, but plans to set up 20 texturising machines with a capacity of 30,000 tonnes a year to be installed by December 2009.

“At the Surat plant, the total capacity of polyester in 2010 will increase to one lakh tonnes per annum (TPA),texturising to 30,000 TPA, and FDY will remain at 20,000 TPA,” said Mr Jain.

Of the Rs 333 crore capital expenditure planned, Rs 250 crore will be procured as term loan while the rest, Rs 83 crore, will be through internal accruals, promoter’s share and fresh equity, he said. Of this, Rs 15 crore worth of machinery will be imported from China and Europe.The company also plans to upgrade its seven to eight mega watt power plant at Surat to 20 mega watts, which might cost up to Rs 50 crore, he said.

Until now, the company used to make POY from polyester chips. But, after expansion, it will make POY directly from petrochemical MEG (Monoethylene Glycol) and PTA (Purified Terephthalic Acid). Around 70 per cent of the polyester — 70,000 tonnes — will be made directly from MEG and PTA, contributing to cost-saving, he said.

The company plans to export 25 per cent of its output, post expansions. “We are getting a Rs 40 crore subsidy from the Government at the 20-machinery plant we have set up under Scheme for Integrated Textile Parks. Previously we used to import polyester but now the doors are opening for export and we would like to be a part of the global trade,” he said.

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