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Richimen Silks Ltd.

BSE: 514048 Sector: Industrials
BSE 05:30 | 01 Jan Richimen Silks Ltd
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Richimen Silks Ltd. (RICHSILK) - Company History

RICHIMEN SILKS, LTD. OBJECTS & ACTIVITIES : Manufacture of varieties of silk fabrics. INCORPORATION & PROMOTION : The Company was incorporated as a private limited company on 16th October, 1984 at Hyderabad. it was converted into a public limited company on 19th September, 1985. It was promoted by G.Vittal. THE PROJECT : The Company undertook to set up a silk mill under the 100% export oriented scheme of Government and a legal understanding was effected with the Government of India 30th October, 1985 for export of the entire production. The unit with a capacity to manufacture 5 lakh metres per annum of silk fabrics was set up at village Morampalli in the Ananthapur district, a notified backward area in Andhra Pradesh. Nichimen corporation, Osaka, Japan provided Zuzuku-Warping, PIPA, Winders, TODD Weaving accessories, etc., and twenty Sulzer Ruti Rapier looms were procured from Sulzer Brothers, Ltd., Switzerland. Nichimen were also to offer their expertise besides providing services to assist in erection of the plant. The Company covered under OGL for both import of machinery against export, is also a Green Card holder whichensures priority treatment from Government departments. The raw material, China silk yarn was to be imported from Singapore. Trial production commenced on 7th December, 1987. TECHNICAL CONSULTANCY SERVICES : The Company entered into an agreement with Gherzi Eastern Ltd., for technical consultancy services for the project for a total fee of Rs.4.50 lakhs. MARKETING ARRANGEMENTS : The Company enter into a Memorandum of Understanding with Leebash Marketing Pvt. Ltd., singapore, who agreed to buy the entire production from the Company for marketing it in the international market. BENEFITS UNDER 100% EXPORT ORIENTED SCHEMES : (i) The custom authorities shall provided bond facilities to the comapny for grant of special facilities under the 100% Export Oriented Scheme, (ii) import of capital goods, raw material and components shall be exempted from customs duty, (iii) the finished products shall be exempted from excise and other Central livies, (iv) indigenous capital goods, components and materials shall be exempted from the payment of Central Excise Duty, (v) deduction to the extent of 4% of the net foreign realisation in addition to 50% of the remaining net export profit. OPERATIONS : Commercial production commenced on 5th April, 1988. The Company proposed to manufacture 6,50,000 mtrs. of pure silk fabrics in varius varieties such as crepes - light, medium,heavy,chiffons, georgettes; taffettas light, medium, heavy, dobby, shot silks, etc. The Chinese Government assured a regular supply of white steam filature for the Company's future export production requirements. During 1989-90, production and sales improved to 82,979 Mtrs. and Rs.23.23 lakhs respectively. In spite of increase in production, targets could not be achieved due to problms like availability of superior quality of silk yarn, labour and marketing setback. During 1990-91, despite continued problems, the Company could achieve production sales of 3,999 metres and Rs.25.76 lakhs respectively. During 1991-92, sales turnover was lower due to underutilisation of production capacity. The Company continued to incur losses. Production of 33,768 tonnes showed improvement over the previous year. EXPANSION : The company made an application for expansion of its licensed capacity to 15 lakhs metres per annum from the existing 5 lakh metres per annum. During 1990-91, the Company obtained the approval of Government for setting up readymade garment unit in Madras export processing zone. COST OF PROJECT : The total estimated cost of the original project was Rs.1,120 lakhs of which a sum of Rs.91 lakhs was for land and building, Rs.635 lakhs for plant and machinery and Rs.100 lakhs as margin money for working capital requirements. This was met by equity issue of Rs.1,000 lakhs, unsecured loans of Rs.105 lakhs and government subsidy of Rs.15 lakhs respectively.