Spinning Mill Producing Cotton Yarn to be Set Up in Maharashtra

Opportunity Snapshot

Investment Opportunity

The purpose of the project is to setup a fully automatic cotton spinning mill in the Vidharbha region, the state of Maharashtra.

There is no problem with the availability of the raw material. Cotton is readily available in the region but there is shortage of spinning mills. We are offering the investors 45% equity participation.

The spinning mill will be using cotton as raw material and producing yarn. The cotton yarn can be easily sold - it can be fully exported or part of it could be sold in the domestic market.

We are a cotton ginning and pressing factory and traders in cotton from the last 50 years and therefore have experience in the industry.

The total cost of the project of about 12000 spindles is about Rs. 45 Crs.

We have with us the land required for the said project and also the building needed for the same. The total investment done by us in the same is in the tune of about a 1,00,0000 dollars and awe are also ready to invest in the working capital of the company.

Competitive Advantage

There is basically no competition in this industry. The finished product can be easily sold in cash in both the domestic and foreign markets.

Some of the merits of the project are
• Machinery is easily available these days.
• The mill requires very less skilled workers - even village youths can be trained within six months.
• Raw material is easily available - we can buy our own raw cotton directly from farmers or we can buy bales from CCI, federations or private cotton traders.
• Cotton yarn is sold in cash, i.e. first the mill receives the rtgs or dd and then only the yarn lorry is sent out of the mill.
• Waste is sold on cash basis.
• Demand for the product type we are offering is huge and there will be demand for our yarn being a quality product.

Another advantage is that because of the around 50% subsidies available it is of a great benefit to setup the project. There is a 10% capital subsidy return and a 12 % Interest subsidy from the government. So this makes a very good sense to invest in the project.

Use of financing

We just need the fixed capital for procurement and setting up of the machines. That is in the tune of around $6,00,0000/-. The working capital will be around 5,00,0000/- for the period of 3 months which we are ready to provide.

Opportunity for the investor

We are looking for an equity partner of about 45% to invest in the same. We can negotiate the equity participation and we are ready to use a debt partner as well.

The payback period for the same will be around 5 years.

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