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Indian spinning firms diversify into fabric making

Apr '12
Several spinning mills in India are moving up the textile value chain by diversifying into production of fabrics in their effort to emerge as vertically integrated textile companies.

In recent years, spinning companies such as Maharaja Shree Umaid Mills (MSUM), Nahar Spinning Mills and Vardhman Textiles have entered the business of fabric manufacturing.

High operational cost, capital-intensive nature of spinning business, and frequent fluctuations in cotton price are among the factors that have driven these spinning mills to opt for moving up the textile value chain.

Moreover, the shift in focus on fabrics and apparel production would help spinning mills retain their profit margins, thus decreasing the negative impact of any slowdown in economy.

Speaking to fibre2fashion, Mr. Govind Sharda, Executive Director of Maharaja Shree Umaid Mills Ltd., said, “The diversification of spinning mills into production of fabrics is a simple value addition. If one makes a value addition, returns from the value addition are always greater compared to the original investment.”

“The yarn spinning business is susceptible to fluctuations in cotton and crude oil prices. The moment you take it to the next level, there is a natural shift because of the value addition, which is always supposed to be more remunerative or at least risk aversive,” he explains.

Making a mention of MSUM, he says, “At MSUM, one such project for fabric manufacturing is already underway. We initiated the project two years back, so we are already in the process of adding our capacities and we are coming up with a mega expansion. We expect our new project to be commissioned by September-October 2012.”

Fibre2fashion News Desk - India

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