S.P. Apparels Ltd. (SPAL) has gone about investing the IPO proceeds in expanding capacity across the manufacturing value chain. The company clocked revenues of Rs. 490 crores during the first nine months of the current financial year, a growth of 27 per cent compared to the previous year. SPAL has seen a healthy revenue growth and also an increase in the existing customer business, in the orders supported by an increased capacity.
The company has added 200 sewing machines in the first quarter and further plans to add another 300 machines by the end of March which will be up and running during the first quarter of next year.
During the first nine months, S.P. Apparels has produced 38.62 million units compared to 25.83 million during the same period last year.
SPAL is one of the leading manufacturers and exporters of knitted garments for infants and children. The company provides end-to-end garment manufacturing, from greige fabric to finished products, including body suits, sleep suits, tops and bottoms. It is also the sub-licensee to manufacture, distribute and market adult menswear products in India under the ‘Crocodile’ brand.
From the IPO proceeds, S.P. Apparels has already installed 19 knitting machines which are up and running. Capex in terms of backward integration on the sewing capacity front is around Rs. 20 crores, and a similar amount is planned for next year. With the addition of fresh sewing capacity, the company has close to 4,000 sewing machines.
S.P. Apparels has also debottlenecked in the blow room increasing the capacity of blow room from 3200 to 4800 kilos. In addition it is adding another 5,000 spindles. Once the projects are completed, 100 per cent of yarn produced in the spinning mill will be used for captive consumption. This will take care of 60-70 per cent of the company’s requirement. Currently the spinning facility is fully balanced, right from blow room to cone winding. For expansion, the company has submitted the papers to the Government for approval.
Knitting
Knitting was till date completed outsourced. But as part of the IPO, the plan was the use the proceeds to set up capacity in knitting. In terms of knitting machines, the company had planned for 40 machines, out of which 19 machines already installed and started commercial production. The company plans to meet atleast 40-50 per cent of its requirement through in-house production.
SPAL is a preferred vendor through long-standing relationships with reputed international brands like Tesco, ASDA, Primark, Mothercare, etc. The company boasts of stringent quality compliance, superior in-house product development and certified testing laboratories. It has demonstrated its ability to set up integrated facilities to scale-up operations. The company is currently operating 21 facilities having close proximity to key raw materials and skilled labour.
SPAL has invested in advanced manufacturing technology and automation systems. It has invested in the Eton conveyor production system (automated sewing assembly line and workflow control), advanced semi-automated storage and retrieval system for efficient warehouse / inventory management and the Orgatex software system for automation of dyeing related processes.
SPAL’s core competency lies in understanding latest fashion and trends to suit the customers’ buying preferences. The company has a dedicated in-house design and merchandising team of designers and design consultants. It uses the latest technology for developing products and styles which are based on prevalent fashion trends.
The company’s design development, sampling and fitment form an integral part of its operations and are considered as an effective tool for converting customer’s needs into finished products.