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Welspun to invest Rs 500 cr in new terry towelling, bedsheeting capacity

Welspun, which is today the fifth largest terry towel manufacturer in the world, is in the process of increasing its terry towelling capacity, and is also moving into wide-width bedsheeting. While all this is aimed mainly at the US market, which is the largest export market for the company, it is also looking at exploring the market in the EU. Reena Mital reports.

Welspun India, Asia’s largest terry towel manufacturer, has planned substantial capacity increases in its terry towelling capacity, with a view to service the increasing global demand, especially post-2004.

The company is planning an investment of Rs 500 crore, in setting up its terry towelling plant in Anjar, Kutch. “We have a terry towelling capacity of 10,800 metric tonnes per annum at Vapi. At the plant in Anjar, another 12,000 metric tonnes per annum of capacity will be added. This plant will also manufacture around 1 lakh metres of bedsheeting per day. And a cotton spinning capacity of 14,000 metric tonnes per annum (the equivalent of 50,000 spindles) is also being put up,” according to company officials.

Of the Rs 500 crore investment, the equity component would be Rs 110 crore, term loans Rs 325 crore, and the remaining would be internal accruals. “We’ve already tied up with the institutions for term loans. The project is progressing smoothly, and we plan to complete it by March 2005,” the official informed.

The company is now in the process of installing the machinery, most of which will be from Tsudakoma, Japan. According to Mr Y Tomii, corporate officer, general manager, sales department, Tsudakoma Corp, “Welspun is leading the way for the Indian industry. The textile industry in India, even today, is a bit hesitant to go in for the latest technology. Welspun is investing heavily in not just state-of-the-art technology from Tsudakoma, but also in establishing economies of scale.” Tsudakoma will be supplying around 192 airjet looms to Welspun, Mr Tomii informed. “Of this, 96 will be for terry weaving and 96 for wide-width sheeting. I am happy to note that there are companies in India that have a global perspective. This is very important in the free trade regime, when India will face very stiff competition not just from China, but a number of other countries too. In fact, investments in textiles have increased in Japan, Europe, Taiwan, etc, which had been affected due to the rapid progress in China,” he stated.

Welspun, which has the world’s fifth largest terry towelling capacity, is expected to have around 500 airjet looms over the next two years. The company is targetting a turnover of Rs 750 crore in the next one to two years, it is learnt. The company has a strong base in the US market, which it plans to further strengthen by opening an office in New York, and a distribution centre in North Carolina. “The company expects the growth in the US market to be phenomenal after 2004, and not just in terry towelling. This is why we have ventured into bedsheeting manufacturing too. In fact, 60-75 per cent of the sheeting capacity has already been tied up by some of our US buyers,” he said. The company is also planning to increase its share in the EU.