Sumeet Industries to invest Rs 77-cr for wind power plant

Surat-based synthetic yarn manufacturer Sumeet Industries is planning to set up 10.5MW (5 Nos. of turbine of 2.1 MW each) wind power plant at a capital expenditure of Rs 77.51 crore.

IDBI Bank has already sanctioned a term loan of Rs 57.75 crore for this project. The balance, however, will be met through internal accruals. This power plant is set to become operational within six months.

Sumeet Industries is an emerging integrated producer of pet chips, superior quality of POY/FDY, texturised and multifilament polypropylene yarns in existence since 24 years with consistent track record of profitability and growth. With the proposed wind power project, however, the company's cost of production will decline and profitability improve further on low cost energy supply to the yarn manufacturing plant.

As per terms, after completion of six years from this project, the company will receive 2.70 crore units of electricity only at a cost of Rs 1.30 per unit.

During last five years the company has successfully completed around Rs 400 crore investment worth of backward integration cum expansion project of polyester chips and yarns. Currently, manufacturing plants of Sumeet Industries are operating at 110 per cent of installed capacity.

The basic raw material is the by products of crude Oil which currently hovering lows. Thus, cost of raw materal is also lower in comparison to previous years.

The company exports pet chips and polyester yarns to South Africa, Bangladesh, Egypt, Saudi Arabia, China, Peru, Argentina, Portugal, Indonesia, Iran, the United States and Singapore, among others

The company posted net profit of Rs 21.19 crore on a turnover of Rs 961.78 crore for nine month ended December 31, 2014. The company achieved net profit of Rs 9.68 crore for the third quarter ended on December 31, 2014, an impressive growth of 58 per cent corresponding to the same period last year.