Textile capex all round

PUNE: The domestic textile industry has begun to gear up, with units lining up expansion plans, to take advantage of the winding up of the quota regime.
"Most of us were afraid that China would swamp the international market, in the post-quota regime. Then, we visited China and saw that they were at the commodity level and though their labour and power costs are lower than ours, we do stand a chance.That was when we decided to expand our capacities," Dr G Vivekanand, managing director, Visaka Industries Ltd, said.
With the global market in mind, Visaka Industries has drawn up a Rs. 200 crore, three-year capex programme. This will see the mainly synthetic blended yarn manufacturer move to cottons, from spinning, weaving to garment manufacture. The processing stage, if it is added, will come three years from now, Dr Vivekanand said, and will require major investment.
"We have a 50,000 spindle, synthetic blended yarn manufacturing unit in Nagpur. This caters largely to the home textile segment. Now, for our expansion, we are looking at setting up a 50,000 spindle unit for spinning and weaving 5 million metres of fabric unit in the Pune area. We have seen a 60 acre plot at Chakan since we need to be close to JNPT, where we will invest Rs 100 crore," he said.
Not to leave out the garments business, Visaka Industries will set up this unit in the Chennai area, in the Mahindra SEZ. The labour intensive unit will benefit from the state''s labour laws, besides being close to a port, for import of fabric for garments.
Visaka Industries, the Rs 160 crore building materials- to -textiles company, has capex plans in place. Morarjee Mills, the country''s oldest surviving textile mill, part of the Ajay Piramal group, entered the garment manufacturing space last June.
"This is the third division of Morarjee Textiles, called Integra. It is located in Bangalore and it manufactures garments," Dipankar Haldar, vice president, strategic planning, Piramal Enterprises Ltd, said. He added that they have tied up dedicated capacities with manufacturers and have begun business with some leading global brands.
Indications are that for the Piramals, with their retail presence through stores like Cross roads and Piramyd, there could be convergence with their garments business. When the garments business of Integra scales up, it could find itself a ready made outlet in the group’s retail stores. Besides what it exports, of course.
The Delhi-based CLC Group, which acquired two spinning units in Maharashtra last year, one each from the Birlas and the RPG group, is expanding capacities at both locations. In fact, at the Solapur location, it plans to tie up with a garment manufacturer who thus gets the captive facility.