India Chirpal Group plan to set up USD 75 million terry towel facility in Ahmedabad
Chiripal Group, Gujarat based vertically integrated group of textile manufacturing companies as part of its business diversification strategy plans to set up a INR 500-crore (around USD 75 million) terry towel facility in Ahmedabad installing 80 airjet looms with an initial towel manufacturing capacity of 10696 tonnes per annum with room to double the capacity in Ahmedabad district with an initial capacity of 10696 tonnes per annum
The unit will also have a spinning capacity of 24408 spindles and 960 rotors which will help the company increase its turnover to INR1,100 crore (around USD 165.35 million) by the end of fiscal 2016-17.
To meet its in-house requirements of textile verticals, Chirpal Industries is also setting up 48960 spindles for the manufacturing of cotton yarn with an investment of INR 306 crore. The new facility will come up at Dholi Integrated Spinning Park near Ahmedabad for which the company has acquired 30 acres.
The wholly-owned subsidiary, Nandan Terry Pvt Ltd, will begin commercial production from December this year, a top company official said.
According to insiders, the towel manufacturing unit Nandan Terry Pvt Ltd will soon be brought under the denim unit of the Group named Nandan Denim Ltd, thereby making it a diversified textile company. However, process for the same has not yet started. Nandan Denim is listed on stock exchanges with shares trading around INR 154.
With its eyes set on the overseas market, the company has chalked out a strategy to market terry towels in USA, Germany, UK, Italy, France, Romania, Australia, New Zealand and Canada, besides other regions.
However, India’s exports to these markets have been on the decline since 2013-14 from INR 950 crore (USD 142.14 million) to about INR 727 crore (USD 109.28 million) in 2014-15 and INR 590 crore (USD 88.67 million) in 2015-16 (till February 2016), DGFT data showed.
The company believes to reverse the trend by penetrating into new markets like Latin America and Africa with a right mix of product and competitive pricing.
Vishal Chiripal, director, Chiripal Industries said that they have planned a total investment of INR 503 crore (USD 75.61 million), of which 70 % will be debt portion. The financial closure has been achieved and they expect commercial production to start from December this year.
About 95 % of the production will be exported. Once commissioned, they expect to achieve a turnover of INR 400 crore (USD 60.13 million) from this plant in the first year of operations. The company has a total turnover of INR 850 crore (USD 127.77 million).