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Gujarat-based diversified textile player, Chiripal Group, is setting up a Rs 500-crore terry towel facility in Ahmedabad district with an initial capacity of 10,696 tonnes per annum.
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 Rs 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 Rs 950 crore to about Rs 727 crore in 2014-15 and Rs 590 crore 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.
"We have planned a total investment of Rs 503 crore, of which 70 per cent will be debt portion. The financial closure has been achieved and we expect commercial production to start from December this year," said Vishal Chiripal, director, Chiripal Industries.
The company has acquired 30 acres of land at Dholi Integrated Textile Park, Dholi near Dholka in Ahmedabad district.
"About 95 per cent of the production will be exported. Once commissioned, we expect to achieve a turnover of Rs 400 crore from this plant in the first year of operations," Chiripal told BusinessLine .
As part of its business diversification strategy, Nandan Terry plans to install 80 airjet looms with a towel manufacturing capacity of 10,969 tonnes per annum, with room to double the capacity. The unit will also have a spinning capacity of 24,408 spindles and 960 rotors.
To meet its in-house requirements of textile verticals, Chirpal Industries is also setting up 48,960 spindles for the manufacturing of cotton yarn with an investment of Rs 306 crore. The new facility will come up at Dholi Integrated Spinning Park near Ahmedabad. Chiripal Industries has a total turnover of Rs 850 crore.
The spinning facility will help the company increase its turnover to Rs 1,100 crore by the end of fiscal 2016-17.
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