Rajapalayam Mills is now focusing on production of customized, fine / superfine yarn to get better yield. The company is able to attract more customers from overseas markets and continues to enjoy growing demand from international customers on account of its supply of consistent and superior quality yarn.
The company focus on value-added customized yarn counts, viz., mercerized yarn, melange yarn, core yarn, etc., has helped to mitigate the impact to some extent. It has set up the preliminary production process for the above value-added yarns successfully and commercial production has started.
The sales volume of mercerized yarn has increased from 38 tonnes to 122 tonnes and the mélange yarn volume has increased from two tonnes to 44 tonnes. The full benefit of such value-added production will start yielding results in the coming years.
As a part of its sustained thrust on modernization and expansion, the company has invested about Rs. 60 crores in textile machinery & equipments like fully automated ring frames with link coners by replacing old ring frames, modernization of TFO machines, installation of modern and most effective contamination removal equipment at blowroom, investments in value-added machineries like yarn mercerization, core yarn, melange yarn, etc.
Indian cotton prices are likely to remain firm on account of tight supply, less availability of quality cotton, crop damages, etc. Rajapalayam Mills is now focusing on sourcing the raw materials across the globe at a competitive price and production of more value-added yarn with contamination-free cotton. The company has developed a strong customer base and also strengthened its infrastructure to manufacture any kind of yarn demanded by the customers to mitigate the risk of fluctuating yarn and cotton prices. The consistent growth of import volume of fabric is a major concern for spinning mills in India as it reduces the domestic demand for yarn.
Rajapalayam Mills is also concentrating on modernizing machineries to further improve quality and cost-effective production. Efforts are being made to scale up production of value-added counts like melange yarn, mercerized yarn, core spun yarn, etc., which will fetch a higher margin and will replace commodity counts in the forthcoming years. With the flexibility to produce value-added superfine counts, the company will continue to make efforts towards expanding the marketing activities across the globe to increase profitability.
Fabric project
Rajapalayam Mills has plans to set up a yarn dyed weaving unit with a capacity of 122 looms to produce 10 million meters of fabrics per annum at a cost of Rs. 250 crores. The company has received approval for a term loan for this project under the Amended Technology Fund Scheme of the Government. It has signed a memorandum of understanding with the Tamil Nadu Government for getting necessary support and facilitation and a structured package of incentives.
After commencement of commercial production of the fabric division, Rajapalayam Mills proposes to put up a fabric processing unit / expansion of weaving capacity after evaluating the market condition for processed fabric.