Pratibha Syntex to invest Rs 349 cr on expansion

New Delhi, Jun 29: Textiles major Pratibha Syntex Ltd (PSL) has envisaged a Rs 349 crore expansion plan for setting up a Terry Towel plant with major investment in the Special Economic Zone (SEZ) in Indore, and three additional plants (including a gas-based power project) at its existing location at Kheda in Madhya Pradesh.

Sharing his expansion plans with reporters here today, PSL Managing Director Shreyaskar Chaudhary said that the major investment of Rs 217 crore would be involved in the Terry Towel project that would have an installed capacity of Towels and sheeting at 18,820 metric tonnes per annum (MTPA) and 3.60 lakh metres per annum respectively.

Other three projects coming up at Kheda include Open End Spinning project involving an investment of Rs 54.51 crore while expansion of Knitting, Dyeing and Garment project envisages a total capital outlay of Rs 60.01 crore.

The cost of the project for setting up a Gas-based Captive Power Plant of 6 MW capacity to cater power requirement of existing and proposed facilities of the company would be in the range of Rs 18.01 crore and it would generate 451.40 lakhs KWH units of power.

The expected date of commencement of production of Terry Tower Project in SEZ is October 1, 2007 and remaining three projects at the existing location at Kheda in Pithampur (MP) by April 1, 2007, he added.

Mr Shreyaskar further said that of the total project cost of Rs 349 crore, Term Loan requirement of Rs 233 crore has already been tied up with different banks and institutions and remaining cost of the project would be funded by way of Equity and Internal Accruals from the existing operations to the extent of Rs 116 crore.

''If need be, the option for tapping the capital market through IPO route is also open but nothing can be said at this time. The company will soon file an application with the SEBI, rest depends on market conditions. The decision will be taken by the end of next month (July)'', the PSL Managing Director replied when asked for possibility of going in for an IPO.

After the implementation of all the four projects Gross Block of the Company would go up substantially from Rs 279 crore of financial year 2006 to Rs 610 crore.

The turnover of the PSL shall increase from Rs 345 crore (including 70 per cent from exports) during FY06 to approximately Rs 800 crore after commissioning of the projects.

The company is already in the business of manufacturing and export of casual wears, inner wears and garments to a number of countries including Europe, UK, US and South Africa. of the total production, only 30 per cent is sold in the domestic market.

PSL is already in the contract farming for cotton to meet its requirements and presently it has about 25,000 acres of land under cotton production in Madhya Pradesh involving about 400 farmers, which is expected to expand to Rajasthan and Orissa for raising to 80,000 acres for cotton production by 2010.

The company's main focus is on organic garments for which it has its own permanent staff of 100 people including engineers and scientists involved in R&D on cotton seed.

UNI