Kiran

SEL charts out Rs 1,500-crore expansion plan

Textile maker SEL Manufacturing, a Saluja Group firm, has outlined an inorganic growth plan of Rs 1,500 crore. It has appointed IL&FS, Kotak Mahindra Capital and SBI Caps to scout for targets in the domestic market. It is in talks with Citibank, Credit Suisse and Barclays to rope in an advisor for its overseas acquisitions.

“We aim to be among the top three integrated textile makers in India by two years. We have earmarked Rs 1,500 crore for financing acquisitions and an equal amount for organic growth. We have already identified some acquisition targets. A deal is likely to be clinched soon,” managing director Neeraj Saluja said. SEL ranks among the country’s top 10 textile makers.

Sources familiar with the matter said the company is in advanced stages of negotiations with one European textile firm and two domestic ones. The domestic acquisition may take place within a couple of months, they added. SEL Manufacturing is setting up a technical textile manufacturing facility with a daily capacity of 90 tonne with an investment of Rs 611.67 crore. Technical textiles are materials manufactured primarily for technical performance and functional properties. Since the product is highly specialised, it commands a higher margin. The global market of technical textile is expected to touch $217 billion in 2010.

SEL manufacturing is also doubling its captive power generation capacity. It’s expanding its terry towel project by 25 TPD, taking the terry towel capacity to 35 TPD after implementation. SEL, a 100% export-oriented garment producer, has manufacturing facilities in Ludhiana in Punjab and Baddi in Himachal Pradesh. The company exports textiles to Russia, Europe and Middle East markets.

The Indian textile and apparel industry is on a high growth path with abolition of quota regime that helped the industry to shift the manufacturing focus towards Asian countries which has a strong raw material base and abundant cheap labour. The size of the Indian textile industry is expected to reach to $115 billion by the fiscal 2012 from $52 billion in fiscal 2007.