Hanil Era Textiles plans Rs 50 crore investments

The Rs 120-crore Hanil Era Textiles is embarking upon a modernisation-cum-diversification programme at a total project cost of Rs 50 crore. The company which so far has got only spinning facility with 80,000 spindles for worsted and cotton/blended yarn, is now also putting up weaving capacity with 72 looms at its existing site in Patalganga, Maharashtra.

The weaving project will be carried out in two phases. In phase I, the facilities will be put up to produce grey fabrics and home furnishing. Besides, the company will also create a modern processing facility. In phase II, Hanil Era is setting up production base for terry towels.

Keeping in view the global market challenges, the company has also decided to modernise its existing spinning capacity in order to bring about the required operational efficiency and reduce the cost of production.

Talking to Express Textile, Mr R K Agarwal, chairman, Hanil Era Textiles said, “We have been observing the recent developments on the trade front for quite some time now. This is the right time to expand the business with right kind of product mix. We derive our strength and competitiveness from the fact that our cost of production will be around 40 per cent less than similar projects set up by others. Besides our own captive power plant, the existing infrastructure facilities as also proximity to JNPT port at Nhava Sheva add to our advantage.”

Commenting upon the product mix, Mr Agarwal said that the company was moving up in the value chain through forward integration. “We are entering into the fields of furnishing fabrics, bedlinen and terry towels, which have got huge potential in the changed market scenario,” he added. According to company sources, the company may think of diversifying into the production of high value technical textiles in future.

On the funding front, the company has availed a loan of Rs 35 crore under the TUF scheme at an effective interest of 3 per cent. The remaining Rs 15 crore will come from internal accruals.

The order for machinery has already been placed. The company is importing 48 airjet looms and 24 projectile looms for the weaving facility. Installation of machines will be completed by April 2005, while the trial runs will commence from May 2005, as per company sources.

Commercial production for phase I is expected to start in May-June 2005 and will contribute to company’s turnover for 10 months in the year 2005-06. Commercial production for the phase II is likely to commence in the end of September 2005.

Established in 1992, Hanil Era Textiles is a 100% EoU that was floated as joint venture between Mumbai-based New Era Fabric and Hanil Synthetics of South Korea. The company went public with NCD issue in 1993 and has been paying dividend for the last two fiscals.