News

German banks sanction Euro 74 million to Indo Rama for expansion

Indo Rama Synthetics (IRSL), India’s largest dedicated polyester manufacturer announced the signing of a long-term loan of EUR 54 million. IRSL has been sanctioned this loan from IKB Industriebank Aktiengesellschaft, Dusseldorf, Germany through offshore financing at extremely fine tuned rates. IRSL has also recently signed a loan agreement for EUR 20 million from DEG of Germany and the residual loans from other Indian lenders in local currency.

These funds will be utilized for IRSL’s polyester expansion project at the Butibori plant near Nagpur in Maharashtra. The work, which encompasses the setting up of a new plant, doubling of capacity of polyester staple fibre (PSF) and partially oriented yarn (POY) from 300,000 tonnes per annum (TPA) to 600,000 TPA, has already commenced. Commenting on the occasion, Mr O P Lohia, chairman and managing director, IRSL, said, “The new plant will commence operations by early 2006, which will help us leverage emerging business opportunities in the manmade fibre industry pursuant to the withdrawal of the textile quota system w.e.f. January 1, 2005.”

“With the signing of the IKB facility agreement, we have formally achieved the financial closure of the project and are now in a position to put in place state-of-the-art, best-in-class and totally automated production facilities to combat global competition”, he further added.

This expansion makes Indo Rama’s Butibori plant the largest single-location plant in the country and one of the largest in the world. Indo Rama’s expansion move is strategic in nature and an investment for the future. The world markets open up post-2005, and the Asian share of polyester industry is expected to continue its rise. The company’s expansion move will enable it to strengthen its position as one of the strongest players in the global market.

IRSL is the country’s largest dedicated polyester manufacturer with an integrated manufacturing complex at Butibori, near Nagpur in Maharashtra producing around 350,000 tonnes per annum of polyester staple fibers, filament yarns, textured yarns and textile grade chips.