Sarla Performance Fibers Ltd. (SPFL), a leading exporter of regular as well as high tenacity polyester and nylon yarns, started operations 19 years ago as a commodity manufacturer of man-made fiber and later transformed itself into a high value-added yarn manufacturer. These specialized yarns target multiple niche end user industries like automotive seat belts, strings, air bags, upholstery, footwear, leather goods, soft luggage and lingerie.
The company has over the years expanded its activities with the widening and upgradation of its existing facilities in India, as well as through setting up of new facilities overseas. SPFL’s manufacturing and dyeing facilities are located in Silvassa and Vapi. The Silvassa plant houses the company’s two manufacturing units. These are vertically integrated plants producing more than 250 different varieties of yarns and threads of international standard. Its state-of-the-art dyeing facilities are situated in Vapi.
SPFL has an annual installed capacity of 11,900 tons for manufacturing yarns in Silvassa and 3,200 tons at its dyeing unit at Vapi. Recently the company commissioned its pilot capacity for Nylon 66 yarn at its Silvassa plant which has a lot of growth opportunities. This product is very useful for end-user industries like parachutes, air bags, shoes and lingeries. SPFL also owns 7.25 MW of wind turbines in Gujarat and Maharashtra.
With the depreciating rupee value, poor infrastructure and the escalating cost of production, textile units in India have been shutting down or moving to other promising destinations. Also, since the present export scenario is not very encouraging, exports of man-made fiber have fallen compared to the previous year, indicating that the cost of production of Indian companies is not very competitive. This was the time when SPFL planned to set up its yarn manufacturing facility in the US with the immense benefits under the NAFTA and CAFTA treaties, with lower freight and power costs compared to India and labour costs reduced by 30 per cent due to automation. Construction of the new facility, Sarlaflex Inc., in Walterboro, South Carolina, is nearing completion. It will be a 100 per cent subsidiary of SPFL.
Says Mr. Krishnakumar Jhunjhunwala, Managing Director & CEO of SPFL: “Two decades ago when we started, we had a dream to make a distinct mark within our chosen sector of performance yarns in India. Now, we have a new dream to be an admired company in our chosen segment in the world’s largest market, the US. This year we will start our first POY manufacturing unit in the US. It will unleash unprecedented opportunities for growth. The start of the Nylon 66 unit at Silvassa last July also marks a new chapter for us giving us the distinction of being the only one of this kind in India. Our best is yet to come as we realize the benefits of these two landmark events over the next few years”.
The US plant, built with an investment of $13.8 million, will start its operations this year with an initial capacity to produce 30 tons per day. Sarlaflex will supply yarn to the apparel and hosiery industries initially, which together account for 65 per cent of the total demand for synthetic yarn in the US.
“Our company is betting on return of textile manufacturing in the US. Over the past 12 years, the US lost almost half of its total apparel manufacturing to China in the lure of out sourcing. Now, as Chinese manufacturing is losing the cost advantage and policies are favourable for manufacturing in the US, new textile plants are making a comeback to the US. New manufacturers find it the right time to start business in the US”, reiterates Mr. Jhunjhunwala.
SPFL exports to over 50 countries around the world. It has a potential customer base in European countries, especially in Italy, Spain, Romania, Turkey, the UK, etc., and some countries in Central and North America and Asia. In the future the company will focus on Israel, Jordan, Canada and South American countries also.
Sarla Performance Fibers registered a sales turnover of Rs. 23,353.98 lakhs in 2012-13 compared to Rs. 18,205.72 lakhs in 2011-12, registering a growth rate of 28.28 per cent. The f.o.b. value of exports increased 32 per cent from Rs. 10,398.97 lakhs to Rs. 13,727.56 lakhs. Also the company reported a net profit of Rs. 1,928.02 lakhs (Rs. 1,084.20 lakhs).