Sutlej Textiles and Industries Ltd. (STIL), a leading manufacturer and exporter of value-added dyed yarns (synthetic & cotton mélange) with presence in home textiles has come out with details of its expansion plans.
On STIL’s brownfield project the company has stated that the trial run of the expansion project of 35,280 spindles for producing value-added cotton mélange and cotton blended dyed yarn at Bhawanimandi is going on as per the schedule and commercial production is expected to commence in March.
STIL will be installing 17 circular knitting machines by June next. The brownfield project is being funded by a mix of internal accruals and term loans sanctioned under TUFS. This will be a dedicated capacity focused on producing value-added cotton and cotton-blended dyed and mélange yarn.
STIL is also expanding its presence in home textiles. The capacity expansion project of home textile at Bhilad is progressing as per the schedule and is expected to be completed in March. This will increase the installed annual capacity to 9.6 million meters. The total project cost of Rs. 88.50 crores is being funded by a mix of internal accruals and term loans sanctioned under TUFS. Increased presence in the home textile segment will result in further strengthening of STIL’s end-to-end operations – Yarn to Home Textile.
The company has also been continuously upgrading and modernizing its existing manufacturing facility. It has invested around Rs. 49 crores during the first nine months of the current financial towards technology upgradation, debottlenecking, etc. This will result in further improvement in efficiency and sustaining plant utilization. STIL intends to deploy a further amount of Rs. 35 crores during the year towards technology upgradation and debottlenecking, etc.
STIL has clocked a turnover of Rs. 1,674 crores during the first nine months of the current financial year as compared to Rs. 1,546 crores during the same period last year. Commenting on the results, Mr. C.S. Nopany, Chairman, Sutlej Textiles and Industries Ltd., said: “The historic step of demonetization in India will have its long term positive implications with far-reaching consequences for the Indian economy. However, certain sectors like textiles where trade and retail consumers preferred buying in cash have been severely affected. The domestic market has seen a sharp decline in demand due to demonetization. Consequently, margins have been under severe pressure, and this is likely to continue in the fourth quarter of the year. The impact of demonetization, however, would be transient and we expect the situation to normalize in FY 2017-18.
The industry has also seen a sharp increase in the cost of raw materials such as cotton and man-made fibers globally. Despite such adverse pressure on margins, both from the revenue and cost perspectives. Sutlej has been able to withstand the headwinds with full capacity utilization due to its diversified portfolio of value-added products. “Our focus on value-added yarns, the ongoing expansion projects and strengthening of Home Textiles business should enable us to deliver a better performance going forward,” he added.
STIL has over the years, successfully carved out a niche for itself and is holding leadership position in the dyed yarn and cotton mélange yarn segment. The total spinning capacity of the company presently stands at 380,714 spindles.
STIL has a strong global clientele and exports to more than 60 countries. It has presence across major developed and emerging economies like Australia, Argentina, Bangladesh, Bahrain, Belgium, Brazil, Canada, China, Chile, Cuba, Egypt, France, Germany, Hong Kong, Italy, Morocco, New Zealand, Peru, Philippines, Poland, Portugal, Russia, Saudi Arabia, Sri Lanka, Turkey, the US, and the UAE, and the UK.