Financial Daily from THE HINDU group of publications
Wednesday, Apr 24, 2002
GER Vasavi group mill to flag off loom shed in July -- TIDCO gets nod to pick up stake
CHENNAI, April 23
THE Rs 377-crore, 100 per cent export-oriented, composite textile mill promoted by the Hyderabad-based GER Vasavi group is set to commission its loom shed in July and the project will be fully commissioned in April/May 2003, according to reliable sources.
Meanwhile, the Tamil Nadu Government has, in principle, approved the proposal of the Tamil Nadu Industrial Development Corporation (TIDCO) to take a stake in the equity, and the project is likely to come up in the associate sector, they said.
According to reliable sources, the formal intimation of the approval is awaited. The group has promoted eR Textiles Ltd (earlier conceived as Circars Textiles) with Mr Eswara Rao, Chairman, GER group, as the principal promoter. The group has interests in ferro-alloy, steel, floriculture and textiles.
The company had tied up the required funds for the project approved under the Textile Upgradation Fund scheme of the Union Government, they said.
Unionmatex Industrielagen GmbH, Germany, which will ensure international quality standards in the company's products, provides the technology and engineering. The promoter is set to bring in Rs 100 crore and additional equity will be from foreign investors. IDBI and banks have sanctioned the term loan.
The foreign partners include the Japanese conglomerate Marubeni, which is taking a stake through one of its subsidiaries. While the promoters have fully tied up the funding, TIDCO's stake will give the foreign investors greater comfort, sources said.
The unit is being set up at Naripuram in Dharmapuri district, about 20 km from Hosur. The facility will be completed in April/June 2003, but the loom shed will be commissioned in July this year. This would set the revenue stream flowing, they said.
The cotton-to-finished textiles unit will manufacture 100 per cent home textile such as bed sheets, pillow covers, curtains and finishing fabric, apart from fine shirting and trousering fabric, said sources.
The installed capacity for spinning and weaving is expected to include 32,256 spindles and 180 looms.
It will process 60,000 m per day (21 million/year) and yarn dyeing capacity of six tonnes per day. The unit will source yarn up to 40s from neighbouring spindle units, which have been put up with IDBI funding. eR Textiles' requirement is estimated to be the equivalent of the total output from about 22,000-24,000 spindles.
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