Yarn maker close to acquiring land for expansion
The grim power situation in Andhra Pradesh has prompted yarn maker Suryalakshmi Cotton Mills to look beyond the State for its proposed Rs 140 crore expansion plans.
The company, which had drawn up plans to add 50,000 spindle capacity at its Andhra Pradesh facility, will now locate the new unit in Nagpur. “The power situation in the State does not look attractive in the short to medium term. Hence, we have decided to locate the new unit in Nagpur,” Paritosh Agarwal, Managing Director of the company, told Business Line.
The firm is close to acquiring the land for the new unit and hopes to commission it by the end of next fiscal. The project will be financed with 60 per cent debt and interest subsidy under the Textile Upgradation Fund Scheme (TUFS).
After declining six per cent in 2011-12, cotton yarn off-take is expected to post a growth of about six per cent in 2012-13. This fiscal also saw domestic consumption of viscose and polyester staple fibres increase by 1.5 to 2 per cent, while consumption of viscose and polyester filament yarns slipped seven per cent.
Suryalakshmi, which has a denim manufacturing capacity of 40 million mts, is finalising plans to launch its own branded jeans. “At present, we supply denim to leading fashion houses, including Levis and Wrangler. We are now working out a plan to launch our branded jeans. In fact, we have recently soft-launched the product to test the market,” Agarwal said.
The product will be priced below Rs 1,000 to compete with mid-segment brands such as Levis. The company will market the product through its dealers’ network across India. It has roped in the services of an Italian designer to put in design inputs.
The Indian denim market has been growing at 10 per cent, with the international order book rising by 15 per cent. India added about 100 million metres of capacity this year, with the total estimated capacity being 800 million mts. India’s denim manufacturing capacity is expected to touch one billion by the end of next fiscal.