Sangam (India) Ltd., one of the largest textile companies with presence in the polyester/viscose dyed yarn and fabrics segment and a fully integrated company with products ranging from yarn to branded fabrics, has announced that the Board has approved its Rs. 120-crore expansion plan for foraying into garments.
The company plans to set up 10,000 spindles for the slub yarn and mercerize unit along with improvement and modernisation in the processing division. The company targets manufacture of 10,000 pieces of seamless garments per day from the next financial year.
Seamless knitted garments are used worldwide as wellness wear, yoga wear, sportswear, intimate wear and other wears. The Rs. 120-crore expansion plan will be funded through a term loan of Rs. 89.50 crores and through internal accruals. The expansion is slated to be completed by March 31, 2015.
The seamless garment technology is an advancement in the apparel industry. It eliminates to a large extent the fabric laying, cutting and sewing process. By eliminating the cutting and sewing process, complete garment knitting offers a variety of advantages in knitting production such as saving in cost and time, higher productivity, quick production, homogeneity, etc.
The company plans to install 36 circular knitting machines to be imported from Santoni of Italy, the world leader in seamless knitting technology.
Commenting on the development, Mr. S.N. Modani, Sangam (India) Managing Director, said: “This expansion plan will add to Rs. 150-175 crores to our topline from the next financial year. We are looking forward to the Government’s initiation of new textile policy to boost job creation and exports and evaluating other opportunities for value-added products to augment business growth of the company”.
Annual dividend policy
The Bhilwara-based poly-viscose manufacturer has announced that the company Board has approved an annual dividend policy to declare 20-25 per cent of the company’s annual net profit as dividend pay-out to the shareholders from the current financial year onwards. With this, Sangam has become one of the few Indian companies to announce an annual dividend policy for its stakeholders.
For the quarter-ended June 30, 2014, the company reported a 1.95 per cent rise in net sales at Rs. 372.93 crores compared to Rs. 365.80 crores in the corresponding quarter of the previous year. Meanwhile, net profit during the quarter surged by 88.1 per cent to Rs. 11.34 crores from Rs. 6.03 crores in the corresponding quarter in the previous year. 
The company reported an earning per share of Rs. 2.88 (Rs. 1.53).
Commenting on the June earnings, the company Chairman, Mr. R.P. Soni, said: “Our performance reflects the belief in our strategy to focus on value-added products, leading to improved realisations. This has enabled us to post good numbers despite a visible slowdown in the Indian as well as the global economy. Going forward, the full impact of our expanded capacities will further boost our margins and thereby ensure sustained growth for the company”.