Indorama Ventures closes deal for Old World MEG business
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Indorama To Swell Spandex Plant With Rs 600 Crore
Indorama Industries, part of $8 billion Singapore-based Indorama Corporation, declared an investment of Rs 600 crore to swell its spandex (a synthetic fibre) manufacturing plant in the state of Himachal Pradesh on mounting consumption by domestic spinning firms.
Indorama has established India's first spandex making facility at Baddi in the state of Himachal Pradesh with an early investment of Rs 400 crore.
The facility was commissioned in March.
Indorama Industries business head R D Gupta stated, “We intend to scale up the capacity from 5,000 metric tonnes to 15,000 metric tonnes in 2-3 years and it will require a capital infusion of Rs 600 crore.”
The firm mainly caters to a variety of Indian textile firms comprising Vardhman , Nahar , Arvind Mills as spandex has apps in manufacturing stretchable denim, sportswear and innerwear.
The company witnesses consumption of spandex going up by 15%-20% annually against international growth of 7%-8% whereas total market size remains at 6,000-7000 tonne per annum.
"Domestic spinning companies will now no longer depend on countries like China, Taiwan, Vietnam for meeting their requirement for spandex. Moreover, they will also be saved from losses incurred in currency fluctuations while importing spandex," he added.
The firm will partially fund the growth with money lifted via $60-70 million of external commercial borrowings (ECB).
Indorama anticipates revenue of Rs 800 crore after expansion from its facility in Himachal Pradesh.
"We anticipate sales of Rs 250-300 crore in 2012-13 and after expansion, the turnover is projected at Rs 800 crore," he added.
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