M. Soundariya Preetha
The Rs. 200-crore expansion plan will be completed by 2006-07
COIMBATORE: Lakshmi Machine Works (LMW), the Coimbatore-based textile machinery manufacturing major, has embarked on an expansion and modernisation programme to increase its spinning machinery production.
"We hope to complete it by mid-2006-07," says R. Rajendran, Chief Financial Officer. Orders have been placed already for the mother machines.
Through the Rs. 200-crore expansion and modernisation programme, the company hopes to increase its annual production from about 1.8 million spindles to about 2.7 million spindles.
The company has acquired Jeetstex Engineering Limited, a sick textile engineering company. It is now a 100 per cent subsidiary of LMW. "We are waiting for the Board for Industrial and Financial Reconstruction (BIFR) approval for merger." LMW has started using the foundry and manufacturing facility of Jeetstex.
The order flow for spinning machines increased since July 2004. The Indian textile industry is creating more spinning capacity to capitalise on the opportunities, especially after the phasing out of quotas. Another reason is the scheduled expiry of the Technology Upgradation Fund Scheme in March 2007. Further, with focus on production of value-added products, demand for yarn has gone up in the domestic market too, says Mr. Rajendran.
About a year ago, the delivery schedule indicated by LMW was six to eight months. In August 2005, this was revised to 18 months for projects and 22 months for individual machines. This has been revised again owing to further inflow of orders.
"We are also creating capacity and trying to meet the industry's requirement," he said. The company's spinning machine production (in terms of volume) went up by about 45 per cent in 2004-05. It is expected to go up by 35 per cent this year and by another 35-40 per cent during the next fiscal.
LMW's turnover in 2004-05 was Rs. 990 crore and this was expected to increase by 35-40 per cent during the current fiscal, he said.