Nandan Exim plans Rs 327 cr capex

Nandan Exim Ltd (NEL) is planning to expand its denim division by 20 million metres per year.

In order to expand its backward integration, the company would install four open-ended machines and 32,000 spindles to produce 50 tonnes per day (tdp) yarn and a captive 15-Mw power plant to reduce the power cost.

The expansion project is expected to be completed at a total capital expenditure of Rs 327 crore.

The expansion would be funded by debt of Rs 243 crore and equity of Rs 84 crore. The company is in talks with various banks for a debt tie-up. Currently, the group manufactures 4,00,000 metres of fabrics of different varieties.

Ahmedabad-based NEL, part of Rs 1,000 crore Chiripal Group of Companies engaged in diverse fields like fibre, fabrics, chemicals, paints and ready-made garments, posted 50 per cent growth in net profit at Rs 5.49 crore in the second quarter of the current fiscal ended September 2006, compared with Rs 3.60 crore in the corresponding quarter last year.

The company's turnover grew 48 per cent to Rs 59.09 crore during the second quarter of the fiscal, compared with Rs 39.88 crore in the corresponding quarter last year.

Profit before depreciation interest and tax (PBDIT) grew 114 per cent to Rs 12.15 crore from Rs 5.67 crore in the corresponding quarter last year. It reported a profit before tax (PBT) of Rs 8.30 crore, up 130 per cent, compared with Rs 3.60 crore in the corresponding period last year.

With the increased demand for denim from rural and overseas markets, the company aims to tap the potentials of denim industry by increasing its manufacturing capacity and product variety. The group estimates to achieve a turnover of Rs 5,000 crore by 2010.

The company has the latest state-of-the-art R&D facilities imported from Japan, Europe and the US.

The group offers value-added products ranging from 100 per cent cotton yarn, synthetic yarns and polyester yarn (POY, DTY, FDY), to cotton blended fabrics, denims, polyester and cotton-knit fabrics.