Shri Lakshmi Cotsyn Ltd. (SLCL) will invest Rs. 1,300 crores by the end of next year to expand capacity in various segments, including terry towels.
The Noida-headquartered company said major investment will be for increasing terry towel production and the rest would be for adding capacity of yarn spinning operations.
“The company is planning to invest Rs. 700 crores in terry towel capacity expansion. We have a capacity of 15,000 tonnes per annum (tpa) currently, and post expansion, the capacity will become 33,000 tpa. The expansion would be completed by December 2013”, the SLCL Company Secretary, Mr. Rakesh Kumar Srivastava, said.
On the expansion of capacity of yarn spinning, he said the company at present has a spinning unit with 35,000 spindles and 5,000 rotors. “Now, the company is planning to set up further 1.50 lakh spindles and 5,000 rotors to fulfill the total requirement, and the estimated investment will be Rs. 600 crores,” he added.
The existing capacity is catering only to 35 per cent of the company’s yarn requirement – 45 tonnes per day out of the total requirement of nearly 150 tonnes per day.
Asked how the BSE-listed company plans to fund the investment, he said that for the terry towel capacity hike it would be a mix of internal accrual of Rs. 215 crores and Rs. 485 crores via bank loans.
SLCL manufactures terry towels at its Abhaipur facility in Fatehpur district of Uttar Pradesh. Its various home furnishing products include denim fabric, terry towels, bed linen, cotton fusible interlining and technical textile items.