“Sintex which till now used to produce high-end structured dyed yarn shirtings at its plant in Kalol will invest Rs 1800 crores in the new spinning project expected to begin full commercial operations in fiscal 2016-17”, a senior spokesperson at Sintex told fibre2fashion.
Providing more details, the official said, “We are going to produce high-end cotton yarn, 70 percent of which will be earmarked for exports, mainly to China and the rest will be sold in the domestic markets.
The FY’14 turnover of textile division of Sintex Industries was Rs 546 crore. Once the new spinning project is fully commissioned, the turnover from the new plant is expected to be in the range of Rs 1,600 to 1,800 crore. At the same time Sintex expects its fabric division sales to grow annually at 12% over FY’14.
TUFs, the Gujarat State Textile Policy and the huge demand for yarn from China proved to be the impetus for setting up the new plant, the official revealed.
He added, “Indian labour cost is cheaper and with subsidised interest cost under TUFs and state subvention under Gujarat Textile Policy, our interest cost is below 3 percent. Gujarat is power surplus and there is a subsidy of Rs 1.80 per unit which is important for yarn manufacturing, since it is power intensive.
“Besides, since Gujarat produces 65% of India's cotton, our project in Pipavav will incur lower logistics cost related to sourcing cotton and also for exporting yarn, as we are just 20 kms away from the port. Other than that, we can avail VAT benefit on the project. All these factors led us to setting up this new project in Pipavav”, he concluded by saying.
Fibre2fashion News Desk - India
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