Shri Govindaraja Mills lines up Rs 350 cr expansion plan
Shri Govindaraja Mills, part of the Rs 1,000 crore Jaya Vilas Group, has lined up an expansion plan with an investment tag of Rs 350 crore.
By TNN |
CHENNAI: Shri Govindaraja Mills, part of the Rs 1,000 crore Jaya Vilas Group, has lined up an expansion plan with an investment tag of Rs 350 crore.
It envisages setting up a greenfield project in Andhra Pradesh and expansion and modernisation of its four mills in Aruppukottai in Tamil Nadu.
In October 2005, the company had approached the Andhra government for a 100-acre land to set up its facility. The site was finalised in December and the foundation stone laid for the yarn facility.
"We have been allotted 60 acres so far in Cuddapah district. We chose Andhra due to the power incentive. Besides the regular power at Re one per, the state offers an additional Re one subsidy and VAT advantage. These factors that influenced our locational choice. We would be adding 750 people to our current workforce of 2,000 people," executive director Ramkumar Varadaraj told ET here on Friday.
The new facility would bring an additional capacity of one lakh spindles. "Our group's aim is to increase our spindle capacity from the current eight lakh mark to one million by 2009. Our expansion plans are in line with our vision as we strive to consolidate in spinning, which is our core competence," he added.
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The company has been registering a 25% year-on-year growth. The expansion and modernisation of its units in Aruppukottai would cost Rs 80 crore. The funding would be through internal accruals, he said, adding that the company is eyeing a turnover of Rs 150 crore by March 2007 from Rs 120 crore last year. Mr Varadaraj said 50% of the yarn production is for the export market. The main markets included Israel, Europe, the US, Korea, Turkey and Italy. "We want to break into Japan. We also want to enter focus markets like Morocco and Latin America due to the government incentives," he added.
Shri Govindaraja Mills has a 50,000-spindle mill for fine exports. The supplies go to yarn consumption centres in the Madurai and surrounding belt, besides Maharashtra, Delhi, Rajasthan and Kolkata. Recently, the company bagged the Frost and Sullivan super platinum award in the emerging facilities category.
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