Once the yarn related expansion plans are commissioned, the Company's total spindlage will increase from 242,000 spindles to 397,000 spindles and total yarn production capacity will increase from 68,000 MT to 140,000 MT.
The garments unit commenced commercial production in the last quarter and is expected to actively contribute to performance from the second-half of the current year.
The Company was previously evaluating its denim foray and has now finalized the denim project that will be completed over two stages, in stage I the Company will commission 14 million meters of denim production at an investment of Rs. 850 million and in stage II the remaining 13 million meters will be commissioned at an investment of Rs. 700 million.
RSWM will produce higher end specialty denim fabric because the Company believes this kind of fabric has good potential in the export market. To keep a control over the quality of the denim fabric and given RSWM's knowledge in the yarn business, the Company has decided to set-up a yarn spinning capacity at an investment of Rs. 1,200 million to support the denim project. Trial production for stage I of the denim unit is expected to commence early next financial year.
Finances for the entire Rs. 9,000 million capex plan will be done through a combination of TUF loans and internal accruals.
The Company is undertaking these capex initiatives to expand its capacities and improve efficiency of its units. Going forward this will help RSWM improve profitability and maintain its leadership position in the textile sector.
Rajasthan Spinning and Weaving Mills Limited
marketing@alchempro.com
