In the May 2024 edition of The Textile Magazine, we highlighted Vardhman Textiles Limited’s ambitious Rs. 2000 crore investment plan. In this article, we delve deeper into the specifics of this investment, focusing on the significant expansions in spinning, weaving, and the company’s strategic entry into technical textiles. This comprehensive plan underscores Vardhman Textiles’ commitment to modernizing its operations, enhancing sustainability, and capturing new market opportunities.
Currently, Vardhman boasts a capacity of 12.37 lakh equivalent spindles and produces approximately 175 million meters of processed fabric annually. As part of its expansion strategy, Vardhman plans to install 5,520 rotors and 17,000 spindles, totaling to about 50,000 equivalent spindles. Additionally, the company will invest in new capacity for Technical Textiles, targeting a production output of 15 lakh meters of fabric per month.
Detailed Investment Plan
Vardhman Textiles has outlined a comprehensive investment strategy totalling Rs. 2000 crores, aimed at modernizing and expanding its operations across various segments. The spinning division will see a significant portion of this investment, with Rs. 1000 crores allocated for modernization and expansion projects, expected to be completed by May 2025. On the fabric side, the company is undertaking two major initiatives: routine modernization and debottlenecking to enhance capacity, and a new project focused on manmade fiber-based fabrics, with an initial investment of approximately Rs. 300 crores. This project addresses a critical gap in India’s textile industry and is set to be completed by 2025.
Additionally, Vardhman Textiles is committed to sustainability by significantly increasing its green power consumption. Currently, green energy accounts for only 2.5-3% of the company’s total power usage, but there are plans to boost this to 25-30% through investments in solar and wind energy. This green power initiative aligns with global sustainability trends and is both commercially viable and environmentally responsible. These investments aim to strengthen the company’s operational capabilities, enhance quality, reduce utility costs, and position Vardhman Textiles as a leader in both traditional and sustainable textile production.
Strategic Reasons for Investment
The Rs. 2000 crore investment by Vardhman Textiles is driven by several strategic considerations. The “China Plus One” trend, where global brands are diversifying their supply chains by sourcing from countries other than China, has created a favorable environment for Indian textile companies. This shift has brought a significant influx of brands to India, benefiting organized sectors like Vardhman Textiles. Additionally, recent government policy changes, such as the introduction of the RoDTEP scheme under the advanced license, have reduced the disadvantages associated with importing cotton, enhancing the feasibility and competitiveness of using imported cotton in production.
Recognizing the growing demand for quick delivery times and a diverse range of products and fibers, Vardhman Textiles plans to modernize and expand its operations. This strategic expansion aims to improve both machine and manpower productivity, reconfigure the company’s processes to handle a broader variety of products, and ensure faster turnaround times. The comprehensive plan is designed to boost the company’s capability to efficiently meet rising demand, positioning Vardhman Textiles to capitalize on evolving market dynamics and enhancing its competitive edge in the global textile industry.
Technical Textiles Foray
Vardhman Textiles is making a significant investment in technical textiles manufacturing, starting with an initial capacity of 15 lakh meters per month. The first phase will focus on producing 70-80% polyester and 20-30% nylon textiles for a diverse range of applications, including sportswear, activewear, industrial uses, and defence materials. This strategic move is driven by the “China Plus One” strategy and the noticeable gap in the Indian market for organized technical textile manufacturers. The project, with a planned investment of ₹320-330 crores for its first phase, will source filament externally while focusing on in-house weaving and processing capabilities.
Leveraging existing relationships with clients like Columbia and Decathlon, Vardhman aims to diversify its customer base to include new markets and industries. The company is optimistic about the synergies with current customers and the potential for expansion, with plans for a second phase contingent on the success of the initial setup. This strategic move is expected to position Vardhman Textiles strongly in the global technical textiles market, driving growth and innovation.
Spinning Capacity Expansion
Vardhman Textiles is also investing significantly in expanding and modernizing its spinning capacity. The company is launching a new open-end project equivalent to approximately 35,000 spindles, with a project cost of around Rs. 300 crores. Additionally, it is modernizing 60,000 existing spindles by replacing them with 77,000 new spindles, resulting in a net addition of 17,000 spindles. This dual approach not only increases capacity but also enhances overall efficiency and productivity.
Vardhman Textiles’ extensive investment and expansion program, totalling Rs. 2000 crores, underscores its commitment to modernizing its operations, enhancing sustainability, and capturing new market opportunities. By addressing critical gaps in the Indian textile industry and aligning with global trends, Vardhman Textiles is well-positioned to strengthen its competitive edge and drive growth in both traditional and technical textiles sectors. This strategic initiative is set to enhance the company’s operational capabilities, improve quality, reduce utility costs, and reinforce its position as a leader in the global textile industry.
