100% Export Oriented Textile Company Seeks Investors

Opportunity Snapshot

Investment Opportunity

Nirmala cotton Mills Pvt. Ltd., is to engage in the manufacturing and high value specialized gray canvas and industrial fabrics, under 100% EOU and TUF scheme importing projectile weaving machine from Switzerland, the way of growth and prosperity. The company chose to invest strategically with the best of technology where demand is high.

NIRMALA COTTON MILLS PVT. LTD., a new Company, intends to set up one hi-tech textile unit to manufacture high value, specialized Cotton Duck/Canvas Fabrics, Confirming to BIS standard which have multiple uses such as sails, tents, tarpaulin, garments, bag and luggage’s, water proofing articles etc. under 100% EOU and TUF Scheme.

The textile sector because of its untapped prospects in international market and the simultaneous pro-active Government policy prompted us to make a giant leap in to this sector. For the last 15 years, we used to travel extensively throughout the country amassing valuable experiences in respect to entrepreneurial skills, marketing prospects, product development carrying out wide ranging deliberations and consultations with renowned business barons.

The bright prospects of textile products in global markets such as USA, Germany, France, UAE & markets of some of the African countries, consumer preferences, low labour costs and abundant supply of input has also provided impetus to us to go in for setting-up a hi-tech textile industry. Eventually we decided to go in for this industry because of its immense scope of generating employment throughout the year to serve our local youth as well as earning foreign exchange.

The nascent growth of textile sector in recent years with favorable government policy has proved it a challenging sector keeping abreast global policies of Liberalization, cut-throat competition & quality of gradation.

The textile industry in the country is likely to generate revenues in excess of $ 50 billion and provide fresh employment to over 1.25 core by 2010, according to confederation of Indian Industry (CII). To tap this huge global opportunity, the textile industry needs to reorient restructure and enhance its competitive strength and global positioning. The industry must act productively with greater speed to achieve cost efficiencies, productivity and improvement in delivery systems.

The Indian Textile industry occupies a unique position in the Indian economy in terms of its contribution to industrial production, employment generation and exports, (i.e. 20% of country’s total industrial output, providing employment to 20 million people and accounts 38% of total exports). This industry, however, suffers from severe technology obsolescence and lack of economics of scale, which in turn has debuted its productivity, quality and cost effectiveness in spite of distinctive advantages in raw material, knowledge base and skilled human resources. With the onset of liberalization and globalization in trade and consequential integration of world economy, it has become imperative for the textile industries to upgrade its technology level to the world class. It has been emphasized by experts that in order to sustain and improve its competitiveness and overall long term viability, it is essential for the textile industry to have access to timely and adequate capital at internationally comparable rates of interest in order to upgrade it technology level. A Technology Up gradation Fund Scheme (TUFS) for the textile and jute industries is being launched for a period of eight years with effect from 01.04.1999. The main feature of the TUF scheme would be a (5%) percent reimbursement on the interest actually charged by the identified Financial Institutions/Banks on the sanctioned projects.

With a view to upgrading quality as well as production capacity and in the process to get I.S,I. Mark/I.S.0. No the unit proposed to install four Nos. of Projectile Weaving Machine (SULZER TEXTILE) importing from Switzerland to manufacture cotton duck/canvas fabrics, only for export under 100% EOU & TUF Scheme.

The State Government has identified Export Oriented Industry in its Thrust Area and given a host of incentives including capital investment subsidy ( 15% for Nayagarh up to Rs.20 Lakhs) Sales Tax exemption/excise drawback, electricity duty exemption for 8 years etc. Marketing support under the nodal agency of Export Promotion of Marketing is being provided.

Competitive Advantage

international standard and will be in the advantage position as the unit could compete effectively in the global market. No competition to be faced in foreign countries as there are very few units with such specific production in the world.Textile export for 2007-08 stood at 20.5bilion, a growth of 10%

Rationale for the deal

The investor will get 30% dividend and it will grow during conjecutive years.

Use of financing

Finance is required for land, building, machinery and working capital.

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