Having received the Board's nod for exploration of the possibility of setting up a new spinning unit, Kalol-based Sintex Industries Limited is mulling a 320,000 spindle project at a project cost of Rs 1,700 crore. While the company is conducting a techno-feasibility study on the project, a positive outcome of the report may result in the company setting up a commercial spinning unit that will manufacture export oriented cotton yarn.
"The board has sanctioned exploration of possibility of such a project. We have a 41,000 spindle capacity for captive consumption. However, we are looking at foraying into commercial yarn production. Once the techno-feasibility report comes and is positive, we will put the project on fast-track," said Amit Patel, group managing director of Sintex Industries.
What's more, once set up, the project is likely to be ramped up to one million spindles in five years time horizon. The company will set up the project under its textile division in the state of Gujarat under TUFS Scheme of the Central Government and Gujarat Textile Policy, 2012 for approx. 320,000 spindles.
The proposed project is to augment better profitability on existing business due to value added yarn and with in-house production benefits. The proposed project will generate direct and indirect employment in the region that helps us to contribute in socio-economic vertical.
"The said project will have benefits from Gujarat Textile Policy 2012 in addition to any other incentives available from other scheme of the Government of India," Patel added.
According to Patel, the yarn manufactured from the new spinning capacity will be of export quality and the company will look at exports significantly. "Any capacity less than 300,000 spindles doesn't make sense if one wants to go for exports. We will manufacture export oriented yarn and market both in domestic and export markets," said Patel.
Currently, under its textile division, Sintex Industries has a capacity of 20 million metres of high value shirting which it predominantly exports. The company is involved in spinning, weaving and processing.
Apart from textiles, Sintex Industries is involved in prefabricated structures, monolithic construction, custom molding and water tanks.
Meanwhile, the company posted a standalone net profit growth of 24 per cent at Rs 40.63 for first quarter of fiscal 2013-14 as against Rs 32.88 crore for the corresponding period last year. Consolidated net profit of Sintex Industries rose marginally by 1.81 per cent at Rs 46.62 crore for Q1 of FY'14 as compared to Rs 45.79 crore for the said period last year.
