JJ Exporters chairman S. N. Jhunjhunwala in Calcutta on Tuesday. A Telegraph picture

Calcutta, June 14: JJ Exporters has merged two group companies ? JJ Spectrum Silk and Pooja Creations ? with itself for better synergy of operations. The city-based exporter of silk fabric and garments is also looking at the cotton segment to take advantage of the quota abolition under the WTO regime.

Group chairman S. N. Jhunjhunwala told reporters here today that according to the merger scheme, the total share capital of Pooja Creations would be cancelled while the exchange ratio between JJ Spectrum Silk and JJ Exporters will be 1:8.

Jhunjhunwala said, “as all the three companies are engaged in export of silk items, the amalgamation will bring in better synergies.”

Post-amalgamation, the total equity capital of the merged entity would be about Rs 9.26 crore.

The group, having a consolidated turnover of Rs 100 crore, plans to expand by setting up an export oriented unit (EOU) at Diamond Harbour near here and capacity enhancement at the silk garments facility of Pooja Creations in Bangalore at a total investment of Rs 36 crore, he said.

The EOU at Diamond Harbour, which would produce 600,000 metres silk fabric per annum, would be adjacent to the Gangarampur facility of JJ Spectrum and cost Rs 23.2 crore.

The investment at the Pooja Creation facility in Bangalore, which was provided two acres of land at the apparel park project of Karnataka government, would be to the tune of Rs 12 crore.

The total outlay would be funded by internal accruals and term loans.

Besides the facilities of JJ Spectrum and Pooja Creations, JJ Exporters has two factories in Bangalore and Bhagalpur.

“Once the expansion projects are completed, the company would consider marketing its product in the domestic tariff area for visibility within the country,” Jhunjhunwala said.

The company is currently engaged in marketing its product in Europe and the US through its agents and subsidiary trading outfit in New York.

JJ Exporters has yet to enter the south American and African markets. Jhunjhunwala said those markets could also be explored at a later stage. The group was looking forward to a sales growth of 15 per cent and a profit growth of 20 per cent this year.