Sutlej to invest 309 cr on expansion

New Delhi, July 24: Sutlej Textiles and Industries Ltd has envisaged an investment plan of over Rs 309 crore during the next two years for expansion and modernisation of Greenfield and Brownfield projects.

Sutlej has a spinning capacity of 1.63 lakh spindles in its two spinning units at Rajasthan Textile Mills (RTM), Bhawanimandi, and Chenab Textile Mills (CTM) at Kathua. It has a capacity to produce 4.8 million meters of fabrics per annum at a processing capacity of 18 million meters per annum at Daman Ganga Fabrics (DGF) at Bhilad.

Under the expansion spree, a Greenfield plant of the company is under installation at Wapi to produce 1.8 meters home furnishing per annum at a capital cost of Rs 26 crore. The trial production has started and commercial production is expected by early next month.

Another Greenfield plant is also under installation to produce 1.5 million pieces of trousers per annum at DGF with a capital outlay of Rs 21 crore. A pilot project with a capacity of 1000 trousers per day has commenced production and the balance capacity of 3000 pieces per day is expected by October, 2006.

The expansion of spinning capacity at CTM by 31,104 spindles raising the total capacity to 134,096 spindles involves a capital outlay of Rs 121 crore and the project will be completed by March, 2007.

To reduce the power costs substantially, two Captive Thermal Power Plants of 14.5 MW are being stalled at RTM and DGF at a capital cost of Rs 62 crore which are expected to be commissioned by October and December, 2007 respectively.

Sutlej Vice Chairman C S Nopany said ''Obsolescence is a curse that has seen the downfall of several units in the past. At Sutlej, special emphasis is given to modernisation. Presently, modernisation schemes at a capital cost of Rs 80 crore are under progress and will be completed by 2007-08.'' Mr Nopany made it clear that these capital projects will be financed by internal accruals and financial assistance from banks under the Technology Upgradation Fund Scheme (TUFS) where incentives are given by the Government by way of interest subsidy of 5 per cent per annum.

Sutlej Vice Chairman said that the annual sales include 80 per cent revenue from exports to 60 countries across the world and 20 per cent from domestic sales.

With the expansion and modersation, Sutlej will actively concentrate of brand building in the domestic as well as foreign markets.

Sutlej Textiles and Industries Ltd was incorporated on June 22, 2005 and had emerged as an integrated player in the textile industry with products ranging from yarns to fabrics and garments.

A corporate restructuring exercise was undertaken last year in the company in which the textile businesses of Sutlej Industries Ltd (SIL) and Dammangaga Processors Ltd (DPL) were demerged into Sutlej with effect from July 1, 2005. The restructuring exercise was aimed at making Sutlej into a focused and an integrated player in the textile industry.

UNI