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Abhishek Ind takes up Rs 60-crore expansion

C.R. Sukumar

HYDERABAD, April 30

ABHISHEK Industries Ltd (AIL), the Rs 300-crore cotton yarn and terry towels major belonging to the Punjab-based Trident group of industries, has embarked upon a major expansion programme in its terry towel division at a cost of Rs 60.3 crore.

The company is expanding the terry towel capacity at its existing unit in Dhaula village near Barnala by 3,500 tonnes per annum. During last fiscal year, AIL expanded the terry towel division capacity by installing 10 additional looms and balancing equip ment, taking the total number of looms to 76.

The expansion programme in the terry towel division was appraised by the Industrial Development Bank of India (IDBI). The means of finance includes term loans of Rs 49.75 crore and internal accruals of Rs 10.55 crore. IDBI has recently sanctioned a term loan of Rs 40 crore and the expansion project is expected to be fully operational by July, according to AIL sources.

Abhishek Industries has recently added 4,752 spindles, taking the installed capacity of the yarn division to 73,440 spindles from 68,688 spindles. The company proposes to install another 7,104 spindles of blended yarn during the current fiscal year and f ocus its attention on cost reduction, value addition, brand equity and economies of scale.

According to sources, the terry towels division achieved a sales turnover of Rs 136.7 crore during the last fiscal year compared to Rs 72.65 crore in the previous year.

The company, which had earlier envisaged to increase the fabric dyeing capacity from 5.5 tonnes per day (tpd) to 10.5 tpd, later changed the scope of the project in view of the change in the demand pattern of its towels.

It went on to install eight additional looms and other balancing equipment. With the current expansion of 3,500 tpa, the company expects to achieve a new record of production and sales during the current year.

The company's yarn division registered a sales turnover of Rs 166.98 crore during last year compared to Rs 112.21 crore in the previous year.

Though it had envisaged to increase the production of its combed yarn, it did not implement the project owing to recession in the combed yarn market. AIL expects to achieve a new peak in sales revenue during the current year with the addition of 7,104 sp indles of blended yarn, according to sources.

A large chunk of AIL's exports are currently going to the US market. Its major customers include major US retailers such as Wal-Mart and JC Penney and manufacturers such as Regal Rugs, Cecil Saydah Co, Franco Mfg Co, Pillowtex, Spring Mills, West Point S tevans and Spartan Mills.

Abhishek Industries is also manufacturing designer towels for Christopher Lowell's brand of Luxury Linens and also for Martha Stewart & Favorite Things brands.

``We are currently targetting big importers and retailers such as K-Mart and Croscil & Target Stores and hope to get good orders from them during the current year. Further, to build the brand equity of Abhishek Industries in the domestic market, we are p lanning to launch our terry towels in the domestic market also,'' the sources added.