Diversified textile player Chiripal Group is setting up a Rs 500-crore terry towel facility in Ahmedabad district with an initial capacity of 10,696 tonne per annum. Nandan Terry Pvt Ltd, a wholly-owned subsidiary, will begin commercial production in December, a top company official said.
Nandan Terry will soon be brought under the listed denim unit of the group, Nandan Denim Ltd. The company has chalked out a strategy to market the terry towels in the US, UK, Germany, Italy, France, Romania, Australia, New Zealand and Canada.
However, according to a recent Directorate General of Foreign Trade (DGFT) data, India’s exports to these markets have been on the decline, from Rs 950 crore in 2013-14 to about Rs 727 crore in 2014-15 and Rs. 590 crore in 2015-16 (till February). Nandan Terry expects to reverse the trend by entering new markets such as Latin America and Africa with the right mix of products and competitive pricing.
“We have planned a total investment of Rs 503 crore, of which 70 per cent will be via debt. Financial closure has been achieved and we expect commercial production to start from December this year,” said Vishal Chiripal, Director, Chiripal Industries Ltd (CIL), the group’s flagship company. The company has acquired 30 acres of land at the Dholi Integrated Textile Park, near Dholka in Ahmedabad district.
As part of its business diversification strategy, Nandan Terry plans to install 80 air jet looms with towel manufacturing capacity of 10,969 tpa, with room to double the capacity. The unit will also have spinning capacity of 24,408 spindles and 960 rotors. To meet its in-house requirements of textile verticals, CIL is also setting up 48,960 spindles to manufacture cotton yarn with an investment of Rs. 306 crore. The new facility will also come up at the Dholi Integrated Spinning Park near Ahmedabad. The spinning facility will help CIL increase its turnover to Rs 1,100 crore in 2016-17 from the current Rs 850 crore.