KPR Mills to expand spindle capacity

Tirupur firm also plans a 24 MW wind farm.

Tirupur-based K P R Mills is planning to invest around Rs 500 crore in expansion of its spindle capacity and in wind farms. The proposed expansion of mill capacity is expected to increase the company’s topline (revenues) by 40 per cent, which was around Rs 837 crore in the last fiscal.

P Nataraj, managing director, K P R Mills, said that the company’s current capacity was 212,000 spindles and there are plans to add another 150,000 spindles by way of brownfield expansion and a greenfield facility between Tirupur and Coimbatore.

The new unit is expected to commence operations in January 2011 and would reach its full capacity by May 2011, he said. Besides, modernisation and expansion of spindlage at Sathyamangalam Mills is also being planned. These would help us achieve improved productivity and higher margins in the yarn segment from fiscal 2012, according to company’s chairman K P Ramasamy.

 

The company is also planning to set up 24MW wind farm with an outlay of Rs 128 crore. The proposed addition will take the company’s total captive power generation capacity to 64 MW from 40 MW at present, supporting 75 per cent of its power needs.

“Our total investment in mill expansion and for setting up wind farm will be around Rs 500 crore,” said Nataraj. The company is planning to fund the project through debt-equity ratio of 70:30.

The Tirupur-based company has reported a net profit of Rs 50.43 crore in 2009-10, from Rs 10.10 crore the previous year. “The improvement in profitability resulted from an improved product mix and increase in capacity utilisation during the year,” according to the company’s chairman K P Ramasamy told his shareholders.

He noted that export contribution to the turnover rose 29.2 per cent to Rs 234 crore in 2009-10 from 25.1 per cent during the previous fiscal.

The company also promoted Quantum Knits Pvt Ltd, a wholly-owned subsidiary, to focus on high-end garment market and high-value customers. The separate identity is expected to create strategic and administrative advantages over the long-run, said Ramasamy.