Welspun has approved capacity expansion plan for the Home Textile business through debottlenecking and rebalancing of facilities at Vapi and Anjar. It will be a capital light, quick turnaround expansion, resulting in increased capacity of Towels by 7%, Bed Linen by 20% and Rugs & Carpets by 80%. The company is expected to spend around ₹ 2,250 mn for the expansion over FY 21 & FY 22. The benefits of this expansion will start accruing in phases from as early as Q1 FY22. This expansion has a revenue potential of ₹ 12,000 mn from second year of operation.
Welspun has re-calibrated its investment in Advanced Textile expansion project reducing the size of investment from ₹ 4,957 mn to ₹ 2,996 mn. The new Disinfectant wipes line is expected to commence production in February 2021 while the expansion of Spunlace business is expected to commence operations by September 2021. These would help this business achieve topline of around ₹ 6,000 mn by FY 23.
Capex:
Till date Welspun has spent ₹ 2,930 mn in capex and for the full year it is expected to be around ₹ 5,000 mn including the investment announced for the home textile business. The company’s net debt is expected to remain below ₹ 24,000 mn as on 31st March 21.
Welspun’s flooring business has been witnessing steady growth. Hard flooring plant is running at optimum capacity due to the strong demand and order book. While the capacity of the hard flooring plant has been doubled in January 2021, it is being further doubled by Q2FY22 to cater to the growing demand. Soft flooring has also started gaining traction with strong enquiries from US, Canada & ROW. In order to optimize capacity utilization of the soft flooring plant, Welspun plans to produce rugs and carpets for its Home Textile customers from Welspun flooring facility, as its facility at Vapi is running at peak capacity
Mr. B.K. Goenka, Chairman, Welspun Group, said: “I am pleased with the all-round performance during the quarter. In tough times, the Welspun family has been at the forefront converting challenges into opportunities and 2020 was no different. We worked harder than ever before & our efforts are being recognized by clients & other stake holders.
Over the past few years we have made significant investments in the areas of sustainability, circularity, “SPUN” including amongst others, and going forward we are bringing all such initiatives under overarching framework of ESG. We have achieved high rating for ESG by one of the leading global rating agencies and the Board is committed to accelerate this process to take it to the next level.
We continue to pursue our differentiation strategy through branding and innovation, coupled with the thrust on digitalization and E-commerce initiatives. We are well poised to meet the increasing demand emanating from the structural shift in the global home textile industry”.