Gujarat-based diversified textile player, Chiripal Group, is setting up a Rs. 500-crore terry towel facility in Ahmedabad district in Gujarat with an initial capacity of 10,696 tonnes per annum.
The wholly-owned subsidiary, Nandan Terry Pvt Ltd, is scheduled to begin commercial production from December this year and has set an ambitious target of Rs 400 crore turnover in the first year of operation, according to a report.
The company will soon be brought under the denim unit of the Group named Nandan Denim Ltd, thereby making it a diversified textile unit.
The company is particularly interested in the overseas market and has chalked out a strategy to sell terry towels in the US, Germany, UK, Italy, France, Romania, Australia, New Zealand, Canada and other regions. However, according to DGFT data, India’s exports to these markets have been on the decline since 2013-14 from Rs. 950 crore to about Rs. 727 crore in 2014-15 and Rs. 590 crore in 2015-16 (till February 2016).
But the company believes it can reverse the trend by penetrating new markets like Latin America and Africa with a right mix of product and competitive pricing.
“We have planned a total investment of Rs. 503 crore, of which 70 per cent will be debt portion. The financial closure has been achieved and we expect commercial production to start from December this year,” Vishal Chiripal, company’s director said.
The company has acquired 30 acres of land at Dholi Integrated Textile Park, Dholi near Dholka in Ahmedabad district.
“About 95 per cent of the production will be exported. Once commissioned, we expect to achieve a turnover of Rs. 400 crore from this plant in the first year of operations,” Chiripal said.
As part of its business diversification strategy, Chirpal Industries plans to install 80 airjet looms with a towel manufacturing capacity of 10,969 tonnes per annum. The unit will also have a spinning capacity of 24,408 spindles and 960 rotors. The company has a total turnover of Rs. 850 crore.
