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Butibori becomes India’s largest single location polyester plant in 2005
E-Tex Staff - New Delhi
Indo Rama Synthetics (IRSL), India’s largest dedicated polyester manufacturer
recently entered into an alliance with Zimmer AG, a leading German construction
and engineering company, for their Rs 900 crore polyester expansion project
in Butibori, Maharashtra. This expansion project aims at doubling its polyester
production capacity from 800 tonnes/day (tpd) to 1600 tpd, for both polyester
staple fibre (PSF) and partially oriented yarn (POY). The company currently
produces over 300,000 tonnes per annum (tpa) of polyester, which, after expansion
will increase to around 600,000 tpa by September 2005.
Speaking on the occasion, Mr O P Lohia, managing director, Indo Rama Synthetics
said, “The plant has been running over 100% capacity since last two years.
The polyester expansion project is in synergy with our focus on making our operations
competitive and global scale. We foresee tremendous opportunities available
to India with the phasing out of quotas from January 2005.”
This is one of the most significant moves from the company to prepare itself
for the opening up of the world market, as it has several direct impacts on
the company’s performance. The expansion will make Indo Rama’s Butibori
plant, one of the single largest of its kind in the world and the largest one
in the country.
Indo Rama has already been rated as one of the world’s lowest cost polyester
producers. The expansion and the new technology will further bring down the
cost per unit of the product, giving an advantageous position to Indo Rama in
the global market.
The expansion will be accomplished in accord with Zimmer AG, which is a technology-oriented
plant engineering company with over 800 facilities operating worldwide. Mr Lohia
further added, “This is a critical project for us, which will enable us
to double our capacity and bring in cost efficiencies by utilising the present
infrastructure available at our Plant in Butibori, Maharashtra.” Indo Rama’s
expansion move is strategic in nature and an investment for the future. The
world market opens up post 2005, and the Asian share of polyester industry is
expected to continue its rise. In India too, It is estimated that PSF will witness
robust growth @ 8 per cent cagr over 02/03 - 06/07.
Domestic demand supply position for PSF remains fairly balanced and provides
an opportunity for growth as well. PFY is estimated to grow @ 8-10 per cent
cagr over the same period and in this too domestic demand-supply balance is
fairly equated providing an opportunity for growth. Indo Rama’s expansion
move will enable it to strengthen its position as one of the strongest players
in the global market. The company will invest Rs 450 crore out of its internal
accruals to fund this Rs 900 crore expansion while the balance Rs 450 crore
will be financed by a consortium of bankers including DEG and IKB from Germany.
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