Spinning a success story, Sangam-style

MUMBAI: RP Soni has dabbled in many things till he found his ultimate success. Soni’s Sangam group started its journey in 1982 and is now in the business of manufacturing poly viscose pre-dyed yarn, and fabrics. There are two major companies under the group, Sangam India (SIL) and Sangam Processors Bhilwara (SBPL).

SIL, the flagship company, was started in 1982 with 8 looms and its original name was Arun Synthetics. Its turnover was a modest Rs 50 lakh in the first year. This has now grown into a Rs 400-crore business.

Mr Soni says the cost of setting up the initial project was about Rs 16 lakh, of which Rs 10 lakhs was financed from a loan given by Rajasthan State Finance Corporation.

“After 20 years of serving in government postings as irrigation and construction engineer, I decided to start my own business. Textile was not an unchartered territory, but it was doing well in Rajasthan at the time, which prompted me to enter this sector, though I didn’t know much about it when I entered it,” Mr Soni says.

In 1984, Mr Soni started a processing unit for fabrics under the name of Sangam Processors Bhilwara (SPBL), which soon became the largest processing company in Rajasthan. Sangam India went public in 1993, and in 1995 it amalgamated its weaving units. In the year 1997 SPBL diversified into manufacturing of upholstery and furnishing as well.

Currently, SIL has a capacity of 64,000 spindles, and is set to add 97,000 more next year. The new capacity will have 31,000 spindles for cotton, and 66,000 spindles for poly-viscose yarn. It is also adding 100 more weaving machines to the existing 127 machines.

The fabric capacity is expected to rise to 30m meters per annum, from the current 10m meters. In 1999, the company established a power project of 3.8 MW for captive consumption by the spinning division with expansion in weaving.

The company sells about 50% of its yarn in the Bhilwara local market itself, one of the biggest markets for synthetic or blended yarns. It also exports its premium product range to Turkey, Belgium, Spain, the Middle East, and various other countries. “Reliance and Grasim from where we purchase our raw materials, are also one of the largest buyers of our yarn,” said Mr Soni.

The company also supplies 50% of the fabrics to domestic companies including Madura Coats, Pantaloon. A new emerging market is the industrial sector for production of uniforms. He pointed out that the Indian armed forces have become a large customer, as they have moved to poly-viscose blended fabrics, from pure cotton.

“We have been tapping markets in UK and Europe as well as getting into the market for uniforms as it is a stable market with the colours and standards remaining the same for a longer period of time. Allowing us to plan our fabric production better,” said Mr Soni. The company also plans to market summer suits.

Sangam enjoys operating margins of 17%, counted among the highest of its competitors. The KK Birla Group company, Sutlej Industries, and Rajasthan Spinning, part of LNJ Bhilwara Group both have operating margins between 10-13%.

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