Spentex to set up dyeing finished fabric unit in Uzbekistan

New Delhi, Dec 7 (UNI) Spentex Industries Ltd today acquired the immovable assets of Uzbekistan-based Farg'ona Ip-Gazlama Ishlab Chiqarish to set up a processing project for dyeing finished fabric in technical and marketing collaboration with UK-based British Millerain.

The company has received the approval of its Investment Committee for the investment to be made through its wholly-owned Dutch subsidiary, Spentex Netherlands BV.

The Mergalan dyeing house, in line with the company's plans to consolidate its presence in Uzbekistan, will manufacture institutional uniforms, industrial fabrics, home fabrics and home furnishing fabrics.

''The proximity to Eastern European markets will be an added advantage apart from low cost of operations and moving a step forward in the value chain are the reasons for setting up of the process house. It would have a capacity for dyeing 30,000 metre of fabric per day and the flexibility to increase it subsequently. The transaction is shareholder value accretive,'' the company said.

This project shall be entitled to all tax benefits from the government of Uzbekistan besides other advantages namely availability of raw material, low cost labour and power as per present policies.

Spentex already has a set up of 2,20,00 spindles and 236 air jet looms capable of having an annual turnover of more than 120 milion dollars employing 3,500 people.

British Millerain Managing Director Michael Miller said, ''The technical and marketing collaboration with Spentex will open up new vistas for a wide range of products and market presence. This synergy will result in combining skills and expertise of both the companies to develop new fabrics and production methods.'' Currently, Spentex Industries has eight plants -- six in India and two in Uzbekistan. It has a total production capacity of 3,50,000 spindles in India and 2,20,000 spindles in Uzbekistan along with 236 airjet weaving looms. It has recently expanded the capacity of its plant at Baramati and Sholapur.

ICICI securities were the strategic advisor on the transaction.

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