Nagpur, Aug. 22 (PTI): Polyester giant Indo Rama Synthetic (India) Ltd will go ahead with an investment plan of Rs 600 crore here to augment the production of polyester fibre from its installed capacity to a massive five lakh tonnes per annum.
With this, the total investment for the Butibori plant would go up to Rs 2,390 crore by mid-2004 besides a provision of another Rs 100 crore in 2004 for balancing machinery, enhancing productivity and improving quality, Indo Rama managing director O. P. Lohia told reporters yesterday.
Reiterating the earlier decision of de-merging the spun yarn business, which has not lived up to expectations, Lohia said it would be managed by a separate company with a board of directors.
The process for it has already begun, he said adding the segregation is expected to complete by the year-end.
With the de-merger proposal, the equity capital of existing unit will be split in the ratio of 80:20 and Rs 33 crore will be offloaded to new company since the equity capital of Indo Rama is Rs 166 crore, he said.
An option is being offered to the shareholders to either remain with Indo Rama or to switch over to the new unit, Lohia added.
The company has targeted a turnover of Rs 2,340 crore against Rs 1,942 crore last year. With planned investments and augmentation in capacities, the turnover should touch Rs 4,000 crore by financial year 2004-05, Lohia said.
Indo Rama will continue to produce draw texturised yarn (DTY) and also remain exclusively in polyester business manufacturing polyester staple fibre (PSF), fully drawn yarn (FDY), partially oriented yarn (POY) and polyester chips, he said.
Work is in full swing to install machines from Germany for adding to the POY, PSF and DTY capacity. The current capacity levels at the unit are 3,00,000 tonnes per annum of POY and PSF.
The company is expecting to increase the capacity of the unit to 3,90,000 tonnes per annum by building another 30,000 tpa capacity, Lohia added.