GHCL plans Rs 220 cr textile unit in Gujarat

AHMEDABAD: The Rs 500 crore GHCL Ltd, formerly Gujarat Heavy Chemicals Ltd, will invest Rs 220 crore to set up facilities near Vapi, Gujarat for weaving, processing and production of bedcovers and curtains, largely for export markets.
GHCL will fund this new project by raising debt worth around Rs 175 crore and Rs 45 crore through internal accruals according to company officials.
With no scope for further growth in its main business of soda ash manufacturing due to overcapacity and dumping from American companies, GHCL has identified home textiles as a major thrust area for future growth. Also, the removal of global textile quotas in four months time will open up huge export markets for Indian textile players.
As the weaving and processing facilities require lot of water and large effluent treatment capacities, the company has selected the Vapi area for setting up this plant. GHCL plans to complete the entire project in 18 months time from now.
The new textile project will not be set up as an export-oriented-unit (EOU) even though a major part of the production will be exported claimed the source. The Indian home textiles market is growing at a strong pace, so GHCL is confident of tapping into this market in future. The company is talking to some large global buyers, but these are still at a very initial stage.
GHCL already has yarn manufacturing facilities at Madurai and Manaparai, both in Tamil Nadu. Out of the consolidated sales of Rs 496 crore in 2003-04, yarn sales stood at Rs 89 crore, while Rs 340 crore came from soda ash and Rs 68 crore from other businesses.
The third phase of modernisation at the TN-based unit is underway at a cost of Rs 15-16 crore. This division is also commissioning a 3.6 MW wind power project in September so as to reduce the production cost.
The soda ash plant near Veraval, Gujarat accounted for around 70 per cent of total turnover in FY04. The Indian soda ash industry is plagued with surplus capacities as the supply at 2.6 million tpa is higher than the demand of 2.1 million tpa.