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Vardhman & FMH JV, yarn dyed shirting fabric plant

25 Nov '05

2 min read

Oswal Group's flagship company Vardhman Polytex announced a joint venture with Austria's FM Hammerle (FMH) to set up Rs 200 crore greenfield yarn dyed shirting fabric facility.

Ashok Oswal, Chairman and Managing Director, Oswal Group informed that this is a three-pronged tie-up, as per which Hammerle will provide technical, design, financial and marketing support.

Out of the total project cost of Rs 200 crore, Rs 80 crore would be equity and Rs 120 crore would be debt, Oswal stated adding that Hammerle would pick up 30 per cent equity in the company while 70 per cent would be held by Vardhman Polytex initially.

The JV will target a turnover of Rs 70 crore in first year of operations, he said adding that the group was seeking to achieve Rs 500 crore by fiscal end.

Yarn Dyed shirting fabric is used in making high quality, high value premium shirts, a fast expanding market.

Company stated that the new facility would be set up in Kolhapur for which the land had already been acquired from Maharashtra State Industrial Corporation.

The new facility would have an installed capacity of 12 million metres per annum out of which 25-30 per cent would be bought back by FMH for its customers in US, Europe and North Africa.

With India importing 100 million metres of YDS fabric, the company is eyeing both domestic market as well as neighbouring countries like Bangladesh and Sri Lanka which import their fabric requirement, he said.

Garment maker Oswal Group is planning to invest another Rs 50 crore to expand the spindle capacity of its flagship from 108,000 to 150,000.

The Economics Times

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