Raymond to more than double fabric manufacturing capacity

The fabric and apparel maker is investing Rs 450 crore in a new plant in Amravati, as well as ramping up production at Kolhapur plant

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Despite the slowdown in the export market and subdued domestic demand, diversified group Raymond is ramping up its cotton fabric manufacturing capacity.
 
A senior company official said that in the next three years, the company will increase its manufacturing capacity to 46 million metres annually from the current 21 million, through a new plant at Amravati and its existing plant at Kolhapur. The company is investing Rs 450 crore in a new textile unit at Nandgaon Peth in Amravati district in Vidarbha. The plant will have an annual capacity of 20 million metres of cotton fabric. 
 
"With the new plant at Amravati, we will ramp up our production capacity up to 46 million metres in the next three years. Our Kolhapur facility is looking to scale up its overall production to 26 million metres by 2018. We are upgrading our technology and machines at the Kolhapur plant," said S K Gupta, president (shirting business) and group CEO (UCO Denim), at Raymond. 

 

For the Amravati plant, the company has been allocated 500 acres by the Maharashtra government.
 
The Maharashtra state government has decided to set up textile parks in the cotton belt of Vidarbha, as well as in Marathwada and north Maharashtra through state Industrial Development Corporation (MIDC). Similarly, the state government has allocated 102 hectares of land collectively to Shyam Indofab Ltd, VHM Industries, Suryalaxmi Cotton Mills and Siyaram Silk Mill where a total investment to the tune of Rs 1500 crore is expected.  These units will employ about 5,200 people.
 
Raymond’s 55-acre Kolhapur plant currently manufactures cotton and linen shirting fabric with a production capacity of about 21 million metres, which will be increased to 26 million by 2018.

 
Raymond exports 15% of its total production to markets like Australia, North America, Brazil, Europe and the Middle East. It has a market share of 60% in cotton fabric manufacturing.  
 
"Given the industry benchmark of producing 93-94 per cent fresh fabric in the country, this is the only plant to produce 97 per cent fresh fabric without any rejection that sets it apart from the competition and also results in huge cost saving for the company," Gupta said.
 
The Kolhapur facility currently employs more than 800 people and secures 20% of its overall orders from exports.

 
Last month, Raymond reported a 28.46% decline in consolidated net profit at Rs 40.11 crore for the third quarter ending December 2015, down from Rs 56.07 crore during the same period in the previous financial year. 
 
However, Raymond's total consolidated income from operations during the quarter increased 7.36% to Rs 1,484.40 crore as against Rs 1,382.58 crore in October-December 2015. 
 
Raymond is raising up to Rs 100 crore through issuance of non-convertible debentures (NCDs) on private placement basis. However, the company did not indicate end use of fund it plans to raise.