The Hindu Business Line : Super Spinning keen on expansion — Looking at options to infuse additional equity

SUPER Spinning Mills Ltd (SSML), a member of the Sara Elgi group and an integrated textile manufacturer, is looking at tapping new market opportunities by expanding its textile value chain.

The Rs 360-crore SSML is set on expanding its production line.

The company's near term business plans include setting up a greenfield spinning project of 25,000/30,000 spindle capacity, an independent textile processing unit and tripling capacity in garment production.

"We are looking at various options for infusing additional equity needed to acquire that extra bargaining power, though in the first place we prefer to tap the private placement route. We are also open to explore venture capital as well," Mr Sumanth Ramamurthi, Vice-Chairman and Managing Director of Sara Elgi Group companies told Business Line.

Mr Ramamurthi who declined to comment on the size of the equity funding he was looking at, said his company has just started the exercise.

Sara Elgi has sought to impart greater thrust to integrating its textile production by strengthening the activities of SSML, its textile division and the group has projected to lift SSML's turnover from the current Rs 360 crore (as on March 31, 2005) to Rs 450 crore by the end of 2005-06 fiscal which will include a projected turnover of Rs 68 crore from garment division from the present Rs 10 crore.

The scale of investments for integrating its production value-chain/strengthening/modernising its existing spinning activity

for 2005-06 by SSML is somewhere around Rs 52 crore. This includes its investment proposal for a 12-tonne yarn and fabric processing facility proposed at Cuddalore SIPCOT industrial estate and setting up its weaving project estimated to cost Rs 15-Rs 20 crore and rising the garment division's capacity from the present 7000 pieces a day into 20,000 pieces.

Its proposed new spinning unit set at a cost of Rs 50 crore would, however, be outside the purview of the above investment plans.

SSML with its three operating spinning units has a total spindleage of 1.33 lakh, producing 45 tonnes of yarn per day. Enjoying strong marketing in both yarn and knits, which has propelled greater demand for capacity on SSML, the company has been hiring additional spinning capacity.

"Unlike last year, not many quality textile spinning mills are available for conversion work this year, especially to our specified standards of production. Hence the decision to invest on a new spinning unit," said Mr Seethapathy, Executive Director, SSML.

He felt that the current going being good both in export and domestic market for yarn, investment on new spinning would augur well for an integrated producers like SSML.

SSML in a closely guarded deal is said to have recently acquired two smaller spinning units with total spindleage of 11000 in the Udumalpet area.

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