Gujarat set to double its spinning capacity by FY 16

Expects to double its capacity from current 2 million spindles to 4 million spindles

On the back of capacity additions or new projects being undertaken by the likes of Vardhman, Sintex and Sumeet Industries, among others, the state of Gujarat is expecting to double its spinning capacity from current 2 million spindles to 4 million spindles in an year. The spinning capacity addition is expected to come at an overall estimated project cost of over Rs 500 crore.

While Sumeet Industries, which has set up a spinning unit in Dahej, is expected to see a capacity of around 100,000 spindles in over an year, Sintex Group's Bharat Vijay Mills (BVM) is adding 600,000 spindles to its current 20,000 spindles capacity, according to respective company sources.

On the other hand, the likes of Vardhman and Oswal Spinning are set to come up with spinning units with spindle capacity running in several hundred thousands. In all, the total investment in spinning sector is expected to be in the range of Rs 500-700 crore.

"In an year, we expect the total spinning capacity in the state to double from current 2 million spindles to another 4 million spindles. Major companies like Arvind, Sintex, Sumeet and Vardhman have approached the state government for the spinning sector," said a senior state government official. However, when asked, Jayesh Shah, director and CFO of Arvind Ltd. declined any such plans to set up a spinning unit as of now.

According to the state government official, the capacity addition in spinning sector is set to boost consumption of cotton within the state for producing cotton yarn, given the growing domestic demand. So much so that Sumeet Industries, which had earlier planned a polyester yarn unit in Dahej under its new entity Sumeet Polypower Ltd. changed its plans in favour of a cotton spinning unit, said a company official on condition of anonymity. Vardhman and Oswal Spinning could not be contacted.

It needs to be mentioned here that some of the companies had also signed memorandums of understanding (MoUs) in this regard in the previous edition of Vibrant Gujarat Summit 2013. Buoyed by the MoUs, the state government had set a target of installing 2.5 million spindles.

However, given the rapid pace of capacity additions in the spinning sector, the state is expected to revise its target. "We are encouraged by the number of spinning units coming up in the state. Our earlier target is expected to be achieved soon in an year. Hence, we expect to do more than the previous target in the coming years," the official added.