Sabare to invest Rs 109 cr for expansion project

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G. Gurumurthy

Karur, Dec 16

SABARE International Ltd, based in Karur, is scaling up its operations aimed at building capacity to offer `one-stop' retail solution in the product-driven home textiles.

The company is set to implement a Rs 109-crore capacity expansion project to transform itself from a trading/marketing company into a vertically integrated producer of high-end home textile items.

The capacity expansion is designed to bolster the in-house production and distribution channels and fusing them with supply-chain logistics it has established with global retailers.

The project expansion covers setting up a new weaving and sewing plant for basic home textile items in Karur, a new wet processing plant for dyeing, printing and textile finishing at Perundurai in Erode, besides investing in the production facilities in Noida (near Delhi) and Panipat (Haryana) from where the company at present supplies the decorative bedding and quilting materials, rugs and floor coverings including specialised hand-made textile products for its overseas retailers.

In addition, the company is also toying with the idea of setting up its own home textiles production facility in China, where it now has a sourcing office at Shanghai. Sabare at present manufactures and exports high-alued home textiles in the product categories of bedding, bathing, dining and window furnishings and their variants.

"The changing dynamics in home textiles trade has given rise to opportunities for high-ashioned home textiles and favoured those capable of directly supplying to the retailers, instead of relying on importers/local distributors in overseas market.

"Single source for all home textile needs and coordinated home textiles designing are the emerging trends that have compelled the Indian suppliers to build capacity to offer `one-stop' shopping. Sabare's current investment thrust is towards meeting these emerging market requirements," said Mr S. Susindran, Chief Executive Officer of Sabare International.

Sabare will turn into a single sourcing point for the entire range of home textiles except terry-towels.

Started off in 1992 with home textile exports through outsourcing, the company managed to develop a strong vendor base to achieve a `niche' in retailing before it decided to venture into acquiring in-house production facilities.

The company is putting up a five lakh sq ft modern weaving/stitching/finishing line on a 29-acre site near Karur at an estimated cost of Rs 52 crore. Already 40 wider-width hi-tech weaving machines are in place in the new project site; it is to install shortly another 26 more looms in a month.

This facility would annually produce 20 million metres of table/kitchen textiles, window curtains, pillows and other home textiles and another 2.4 million sets of bed linen. The company also plans to refurbish its production facilities at Noida and Panipat (two lakh sq.ft each) with new investments to produce decorative bedding, blankets, pillows, carpets and rugs/floor coverings.

While the Noida facility would produce one million units of bedding and other products per year, the Panipat plant would produce four million sq mtrs of rugs and carpets. The investments in these two plants would be Rs 12 crore and Rs 20 crore respectively.

The Perundurai facility costing Rs 25 crore would have a processing capacity of five tonnes of yarn and one lakh metres of fabric per day, besides a printing facility to handle 20,000 metres a day.

For Sabare integrating its strength in retail marketing with its in-house production capacity and supply-chain networking will enable it step out of routine competition. "We already have a warehousing facility in Antlanta and we are contemplating to have two more in the US. This would enable use to provide total retail solution service in our line of products for the US markets," said Mr Susindran.

Sabare is hoping to tap the capital market to fund its expansion projects. Already the company has garnered Rs 30 crore private equity funding from the Kotak group. "We may either go for an initial public offer or another round of private equity funding depending on the structure/mode that will suite our needs," said Mr Susindran.

The company is also planning to broadbase its board of directors.

(This article was published in the Business Line print edition dated December 17, 2005)
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