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S. Shanker

Mumbai, Sept. 19 Garment and fabric manufacturer Richa Industries plans to diversify into pre-engineering building (PEB) with an investment of Rs 125 crore.

The company is setting up a 54,000-tonne-per-annum prefab plant at Uttarkashi, Uttarakhand, where it has purchased 13.5 acres for Rs 8.50 crore

The unit, with an installed capacity of 1.80 crore sq ft of PEB, will be commissioned by April 2009. “Even if capacity utilisation is 50 per cent, we could look forward to a turnover of Rs 300 crore,” said Mr Shusil Gupta, Managing Director, Richa Industries.

As for the funding, Rs 48 crore to Rs 50 crore would be by bank finance, for which the company has tied up with two PSU banks. The balance would be raised through global depository receipts listed on the Luxemburg Exchange, he said.

Richa Industries is into manufacture of knitted fabric, dyeing and processing of knitted fabrics and readymade knitted garments for domestic and export purposes. Its plants are at Manesar, Gurgaon and Faridabad. Turnover for the last fiscal was Rs 103 crore and for the first quarter this fiscal it was Rs 40 crore.

The company also intends to enhance its knitting capacity at a cost of Rs 7.5 crore.

“For FY10, the turnover of the two businesses should be about Rs 550 crore,” Mr Gupta said, adding that the textile division turnover for second quarter would be close to Rs 80 crore.

Mr Gupta said though Richa Industries could post a net profit of Rs 7.23 crore for FY08, margin pressure was high. Going forward the company looks for diversification, alongside growth in textile business. The market for PEB was about Rs 2,00,000 crore and there was ample space for entry, especially if the product was cost effective.

A sq ft of PEB could generally vary between Rs 250 and Rs 350. PEB is extensively used for industrial purposes — in construction of factories, airports, railway stations and warehouses.

More Stories on : Diversification | Readymade Garments

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