The planned expansion will add 8,000 MT to its SPFY capacity and approximately Rs 100 crore to revenues
Pioneer Embroideries Limited (PEL), one of the key players and owners of the brand ‘Silkolite’ in specialty polyester filament yarn (SPFY), is planning capacity expansion to fulfil the increasing demand for SPFY. The expansion is driven by the fact that during the pandemic it experienced growth in newer segments like home and technical textiles. The company will add SPFY capacity of 8,000 MT which will increase its total capacity to 26,000 MT per annum. The current expansion is in partially oriented yarn (POY) and draw textured yarn (DTY) segment. The company is aggressively focusing on POY-based speciality textile avenues such as flame-retardant, automotive, anti-microbial and value-added DTY yarn for non-apparel segments.
While the company is already a notable player in the POY segment ever since it launched its POY-based product range in 2017 in both domestic and export markets, the newer product offerings will make it a complete supplier or a one-stop-shop for its customers for all kinds of speciality yarns. At the same time, the market size of value-added yarns for floor covering end-use is continuously growing as polyester remains the cheapest alternative here. The company is confident of placing this additional volume quite easily in the market.
The total project cost is Rs 58 crore, of which Rs 18 crore would be from internal accruals and the balance will be funded through bank borrowings. The project is expected to be completed in 4-5 quarters and the new capacity will be fully operational by the fourth quarter of FY 2022-23. The major equipment is being sourced from Germany-based Oerlikon Barmag Group, a world-renowned supplier of quality textile extrusion equipment. Primarily, PEL is into fully drawn yarn as well as partially oriented yarn and its value-added versions like air textured yarns, cabled yarns, twisted yarns and textured cabled and heat set yarns.
The current capacity utilisation is 95%. The addition of new capacity will have sales potential of Rs 100-110 crore at full utilisation with a mix of domestic sales and exports.
Commenting on the new expansion, Harsh Vardhan Bassi, Managing Director, Pioneer Embroideries Limited, said: “The increased demand from the home textile segment has helped us grow in these difficult times of the ongoing pandemic and we continue to be a niche player in SPFY. We believe this is the right time to enhance our capacity to leverage the opportunity presented by the growing demand.”
“Our focus continues to be on improving operating margins through increased capacity utilisations, thus increasing our share of value-added products and improving operational efficiencies,” he added. PEL currently deals in almost 1,200 shades and more than 500 product variants suited for specific needs. It is able to supply smaller batch sizes with high level of consistency and repeatability since it possesses its own colorant manufacturing resources. With constant innovation, experienced manpower and flexible infrastructure, the target is to have a new commercial product every month. This passion to discover new products is through continuous and focussed research and development which keeps the company in line with the changing trends and helps it achieve better capacity utilisations.
Wide Network
PEL has a well-spread distribution network in both domestic and export markets and plans to export about 25% of its produce. All PEL products are certified by OekoTex and REACH. Also, the company has ISO 9000 and ISO 14000 certifications. Further, its foray into recycled yarns with GRS certification has helped it to get the ‘sustainable’ tag for its entire product range. The anti-China sentiments presently prevailing in the world will lead to shifting of business to India in a big way in apparel as well as non-apparel and this will be an added advantage for PEL.
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Commenting on the new expansion, Harsh Vardhan Bassi, Managing Director, Pioneer Embroideries Limited, said: “The increased demand from the home textile segment has helped us grow in these difficult times of the ongoing pandemic and we continue to be a niche player in SPFY. We believe this is the right time to enhance our capacity to leverage the opportunity presented by the growing demand.”