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Lakshmi Cotsyn undertakes capacity expansion
18
May '11
The Kanpur-based Shri Lakshmi Cotsyn Ltd. has announced expansion of capacities across its various segments, including technical fabric, denim, fusible interlining fabric and terry towels.

The proposed expansion involves increasing technical textile capacity from 6 million meters to 64.5 million metres, terry towels capacity by five times to 15,000 tonnes, doubling of fusible interlining capacity to 12.5 million metres, and doubling of denim capacity to 40 million meters by September 2011.

Besides rapid capacity expansion, the company also plans to open 1,500 multi-brand retail outlets on a franchise model in fiscal 2011-12, to improve its realizations.

The dual increased focus on retailing as well as high-margin technical textile business would drive the future growth of Shri Lakshmi Cotsyn.

The company has reported an increase in net profit by around nine percent to Rs. 277 million on a year-on-year basis for the quarter ending March 2011. During the same period, the company's net sales jumped by around 14.3 percent to Rs. 4.378 billion.

After witnessing a sharp fall in the June 2010 quarter, the company's operating profitability has once again returned nearer to the year-ago level of above 16 percent.

Since technical textile business caters to high-margin business segments of the textile sector such as construction, automobile, agriculture and medicine, the scope and rate of growth in this sector is higher than home and apparel textiles.

Shri Lakshmi Cotsyn is already a market leader in technical textile segment and derives more than 32 percent of its total revenues from this business. This explains the almost 16 times expansion plan of technical textile segment.

The company will also benefit from the doubling of its home furnishing and fabrics segments which together contribute more than 28 percent to the company's total revenues. The home furnishing includes terry towels and bed sheets while the fabrics segment includes denim, bottom weight, blended, quilted, and embroidery.

Fibre2fashion News Desk - India

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