Calcutta, July 27: City-based Eastern Silk has proposed to double its silk fabric manufacturing capacity from 6 lakh metres to 12 lakh metres at its Anekal plant near Bangalore.
The company has also decided to go in for value-added silk made-ups to increase its presence in the European market, where many domestic manufacturers are in the process of withdrawing from the business.
Along with fabric capacity expansion, the company has also undertaken a forward integration project to make silk made-ups at a total investment of Rs 70 crore.
The project is to be implemented in two phases. In the first phase, the capacity is to be increased to 8 lakh tonnes, while another 4 lakh tonnes will be added in the second phase.
According to company chairman S.S. Shah, the entire project will be completed within three years.
The company, which has reported about 100 per cent increase in profit at Rs 8.35 crore in the first quarter of the current fiscal against Rs 3.95 crore in the same period last year, has appointed a number of financial advisers and merchant bankers on funding the expansion and forward integration project.
“The company is currently evaluating various debt and equity options. It could be private equity placement, term loan or foreign currency convertible bonds (FCCB),’’ Shah said adding that the financial tie up will be finalised within two months.
According to Shah, a veteran in Indian silk business, especially exports, many European manufacturers of silk fabrics and made-ups are in the process of closing down their shops because of increasing labour costs and lesser returns.