Welspun India plans to invest up to Rs. 1,000 crores in the next fiscal to scale up its yarn and cotton production at its two plants in Gujarat, as it aims to reduce dependence on external sources for raw materials.
The Mumbai-based firm, which exports over 90 per cent of its production, has also set a turnover target of $1 billion in the next four years against the current $650 million.
“We are investing in vertical integration. In the next fiscal (2013-14), we plan to invest Rs. 700-1,000 crores on spinning and weaving equipment at our facilities,” Welspun India Managing Director Rajesh Mandawewala said.
The company would expand its existing facilities at Vapi and Anjar by adding more weaving and spinning machines. “We currently get around 40 per cent of our total requirement of yarn and fabric from our facilities. After expansion, it will go up to 75 per cent,” he added.
The company currently produces 44,000 tonnes of towels, 45 million metres of bed linen and 10,151 tonnes of rugs per annum.
The company expects to easily achieve its turnover target as both its international and domestic markets continue to do well. Around 60-65 per cent of the company revenues come from the US market. It is expecting to grow in various other territories as well, including Brazil, Canada and China.
The Managing Director further observed: “If the Free Trade Agreement (FTA) comes through with Europe, then we expect this market to become as big as the US. There is huge potential for growth for us (in Europe). Europe contributed around 14 per cent to the company’s total revenues in 2012. In 2013, we expect it to rise to 20 per cent.”
Commenting on the domestic operations, he said the entry of multinational retailers in India through the opening up of FDI would also help in pushing up sales.
Welspun India produces home textiles, like bed linen, basic bedding, decorative bedding terry towels, rugs and bathrobes. It has two manufacturing facilities, at Vapi and Anjar, in Gujarat.