Mahalaxmi Rubtech plans expansion

Mahalaxmi Rubtech Ltd, part of the Rs 150-crore Mahalaxmi Group, has chalked out plans to raise funds to fuel expansion of its production capacity.

The company presently makes textile printing blankets and rubberised textile fabrics that are by and large used by the textile company and it is a vital part of a machine used for cloth manufacturing. The company also produces hydraulic seals, air cells and various types of grey fabrics.

Jeetmal Parekh, chairman of the Mahalaxmi Group, said: "We are starting the second phase of the expansion, which is expected to be completed by July 2007."

Last year, the company completed the first phase of its Rs 10 crore expansion and it is initiating the second phase of expansion for which the company will invest Rs 25 crore.

In the second phase of expansion, the company will raise its rubber textile printing blankets per annum production capacity from 58,000 running feet to one lakh running feet.

While the grey fabrics will be raised from present annual capacity of 15 lakh meter to 96 lakh meter. The fund raise will be a combination of right issue and debt. However, the company is yet to decided on the debt : equity ratio. "We have strong growth prospect as the textile industry is marching towards growth," adds Parekh.

According to the company, the rubber textile printing blankets and rubberised textile fabrics has a replacement period of 12 months to 18 months. Hence, there is a recurring demand when the life span of the product is completed.

The company claims it has a business edge as its the only major producer of rubber textile printing blankets in India. "We command nearly 50 per cent share in the domestic market," claims Parekh. Presently, the company's exports is worth Rs 1.5 crore, which is expected to double by next year.

While the domestic sales is Rs 4 crore. By the end of the current financial year 2006-07, the company expect to touch turnover of Rs 12 crore.

As per the chairman the fruits of the company financial performance in its post expansion arena will reflect in the financial year 2008-09 results. The company expects to achieve a turnover of Rs 60 crore plus in the financial year 2008-09.