Sintex shelves plans to manufacture garmentsJuly 11th, 2008 - 4:52 pm ICT by IANS
Ahmedabad, July 11 (IANS) Kalol-based plastic products manufacturer Sintex Industries Ltd has shelved plans to set up a garment manufacturing facility, company officials say. The unit, with a proposed capacity of manufacturing 10,000 garments a day, was to have come up in and around Kalol, about 25 kilometres from Ahmedabad, on a Rs.350 million investment. Operations were to have commenced by September.
The officials told IANS the garment unit was mooted as Sintex already has a textile division that manufactures fabrics.
Later, however, the company discovered the project was a low-volume, low-margin business, and it made better sense to deploy funds in the plastics business where returns were higher, the officials added.
But despite shelving the garment facility plans, Sintex has expanded its fabric manufacturing capacity to 24 million metres, from 21 million metres, on a capital expenditure of Rs.700 million.
This could now be raised five million metres, to take the aggregate capacity to 29 million metres on a capital expenditure of Rs.800 million.
Meanwhile, the company’s un-audited results for the first quarter showed a 108 percent increase in consolidated net income.
The income for the quarter stood at Rs.7,148 million compared to Rs.3,435 million in the corresponding period of 2007-08. Net profit after tax was Rs.565 million, a 71 percent increase from Rs.330 million during the period under review last fiscal.
“The current fiscal year offers a large number of opportunities especially in the building material and custom moulding segments,” Sintex managing director Amit Patel said. “The benefits of the initiatives taken so far will be visible in the coming quarters.”
The building material segment’s order book position stood at Rs.15 billion on June 30; orders would be executed in the next two years.
Sintex also made several acquisitions of late, these being Wausaukee Composites Inc in the US, Nief Plastics in France, and Indian plastic automobile component manufacturer Bright AutoPlast.
Tags: better sense, building material, capital expenditure, company officials, current fiscal year, custom moulding, garment, garments, industries ltd, investment operations, kilometres, margin business, net income, net profit, plastic products manufacturer, plastics, rs 800, shelved plans, textile division, wausaukee composites