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| WHATS NEW |
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| 2. NEW PROJECT OFFER |
| 'PROJECT CONCEPT CUM BUSINESS PLAN FOR PROJECT DIVERSIFICATION & INTEGRATION FROM COTTON SPINNING TO KNIT GARMENTS' |
| Proposal-In-Brief: |
With value addition ,from yarn to knit garments, The consultants, Nuovatex at Newdelhi with 25 years of project experience in textile industry,are proposing to set up an integrated project from captive yarn spinning, knitting and garment making . In the complete production chain, however, the dyeing and finishing of the Knit fabric is proposed from outside,in Phase 1.
Later, in phase 2, the project can add inhouse dyeing/ processing.
This integrated project for Diversification cum value addition into the knitfabric and also knitted garment making is the right market opportunity with increasing export market and growing domestic retail. ConsIdering that the TUF scheme[ with 5% concession on interest] has been extended upto end-2011,the timing is also right .
The Project, under reference proposed by textile industry consultants M/s Nuovatex Projects Co. New Delhi, is being targeted to manufacture high-value adding knitted fabrics, and knit garments for the growing export and domestic retail markets .In near future, Phase 2, the project will be expanded o include a 5 ton/day of specialized Dyeing and finishing facility for open-cut knitfabrics.
The integrated project, of overall capital cost Rs 42-45 crore, is proposed to be set up for producing 5000 Pieces/day of knit garment in phase 1 with captive 10,ooo spdl. Cotton yarn spg. Mill with own 8 machine knitting unit and garment unit of 250 knitted garment making machines plus few embroidery mcs .
The Core components of the integrated project recommended shall be as below :
- An on- site common complex would have a captive ring spinning unit of 1000 spdls. to produce 6.5 ton/day of knitting yarns from the cotton to be sourced from nearby cotton belt.
- The capex for the cotton spinning unit will be Rs 25 crore, at avg Rs 25000/spdl.
- The on site common complex would have 8 nos. Circular knitting mc, of large dia, with flat bed mcs and computer Embroidery mc, along with a garment making line of 250 sewing mc and others.
The capex for these fabric/garment making units will be Rs10 crore.
In addition to the above capex of Rs 35 crore in plant and machinery for various production units ,there will be further investment of Rs 12 -15 crore to cover the land+buildings+erection & installation, duties and taxes , pre operative costs and WC margin.
In Phase 1, the business plan would be based on dyeing and finishing of the knitfabric on job basis from outside dyeing and processing units. In phase 2, in 2-years time, own knitfabric process house,including yarn dyeing, of 7-8 ton/day with increased yarn spindles, knitting mcs to be added at capex of 30 Cr.
The product-range of the overall project would thus comprise of,
- knitted fabrics of both tubular and open cut type for exporters,
- knitted fabrics of special yarn dyed& cotton-lycra blend types,
- knitted garments, Bseamless garments, and embroidered ,and
- premium Knitted fabrics of organic cotton, bamboo, soya yarns.
The project will be eligible for concessional interest financing under the TUF scheme which is now extended till end-2011. It is proposed to finance the total project with debt-equity ratio of 2:1 under the TUF scheme.
Following table highlights majors Indicators associated with the overall project, including phase 1 and phase 2: |
| Sr. No. |
Project Parameter |
Associated Value |
Unit |
Remarks |
| 1 |
Project Cost |
45
in phase 1 |
Rs Crores |
Incl. Spg+Knttg +RMG for Ph 1 |
| 2 |
Land requirement |
8-10 |
Acres |
Preferably more for ETP needs,
in phase 2 |
| 3 |
Knttg. mcs &
Sewing mcs |
6
250 |
- |
jersey-4,
others-2 |
| 4 |
Means Of Financing |
Debt-2
Equity-1.0 |
- |
- |
| 5 |
Term loan
Interest Rate |
10 |
% |
avg.Under TUF |
| 6 |
Phase 1 Capacity |
6.5 tpd yarn +5000 pc Garments |
- |
,on 10,000 spdls
,on 250 sew mc |
| 7 |
Sales Value |
55 |
Rs Crores |
In phase 1 |
| 8 |
Invest: Turnover
Ratio |
1:1.4 |
- |
With garments at 25%cap`y |
| 9 |
Simple Payback
Period |
4 |
years |
- |
| 10 |
Break-even
Point |
50 |
% |
In the first year |
| 11 |
Average DSCR |
- |
1.85 |
- |
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3. RECOMMENDATIONS :
To begin with,and to take the benefits of the current TUF scheme ,it is suggested to immediately take up the detailed Project Report, for the bank etc,,for a Knit fabric focused project for 6.5 tpd of cotton yarn spinning, 6 circular knitting mcs and 5000 pcs/day of Knit garment.
Such Phase1 project will have the capital invest.of Rs 42-45 crores,including working funds for dyeing/processing in outside unit.
Over next 2years, and in Phase 2, knitting capacity to be expanded to 12 mc and an inhouse Knit fabric process house of 7-8 tpd, be added.
A ready to use non-customised Report canbe offered,under advance fee, and within 7-days of confirmation.
Project concept by: M.Tyagi,Consultant-Ceo |
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| 1. OUTLOOK |
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