It is proposed to set up a modern and state of the art project to manufacture large width Sheetings of double and king size and of 100% cotton and cotton-polyester fabric.

THE PRODUCT USES

The Sheeting products are generally of 100% cotton or cotton-blended fabrics an find applications in the home-textile sector with end use as part of bedlinen which would normally comprise of sheetings, pilow case and quilt or blanket cover, sheetings also find end uses in hospitality industry like hotels, clubs, resorts etc and where the use of `double size` sheeting of width 90 to 94 " [that 2.2 to 2.3 meter] is preferred.

The Prevailing prices for the sheeting products in the export and domestic markets are as below;

PRODUCT TYPE			EXPORT-FOB	DOMESTIC
-SINGLE SHEETING,2OK		$ 0.80/MTR	Rs 36.5 /mtr

-DOUBLE SHEETING,30COMB		$ 1.60 "	RS 73.0  "

MARKET IN BRIEF

The fall of trade barriers from the end of 2004 onwards marks the beginning of an open fight in its own, previously protected market, for the Indian Textile Industry. Domestic textile consumption per head in India remains low at one tenth as much as in most developed countries. But things are changing and demand is growing for better things. An increase in international awareness has increased perceived needs, making the Indian consumers more discerning and demanding. Manufacturers realise that with domestic consumption almost static- to sustain growth, export trade is the only way. The Indian textile industry has to face the challenges coming from consumers and retailers in foreign and domestic markets.

INSTALLED CAPACITY

The installed capacity of the project is based on 48 nos. imported high speed shuttleless looms of the Air jet type. Based on a mix of single width looms [ 24 nos]and double width looms [ 24 nos] and 300 working days per year x 3 shift/day, the 100% installed capacity works out to 51.60 Lac meter per year.

Considering the fluctuations in the raw material availability and/or market offtake etc, it is proposed to reach the capacity in a phased wise manner, and with optimum capacity utilisation being 90% by the 3rd year.

PRODUCT MIX

Considering the market demand for both export and domestic markets, the Product Mix for the Sheeting project would comprise of ;

A] 100% Cotton sheetings, mainly for export markets

B] Cotton and polyester Blended sheetings for export and domestic markets,and in both SINGLE AND DOUBLE SIZE.

TECHNOLOGY & KNOW HOW

THE PROJECT is based on the state of art weaving technology of `Airjet ` weaving whereby high speeds and weft-insertion rates are achieved by use of compressed airjets to propel the weft [the cross yarn] to make plain weave fabric like cotton sheetings, twill, drills.

RAW MATERIALS

The sheeting being a household and hotel use product is preferred in natural material like 100% cotton of blend of cotton with polyester or viscose to provide washability and easycare properties. The main raw materials are thus carded and combed type yarns of 100% cotton or polyestre-cotton blend andof weaving twist. The yarns of counts20s, and 30s are generally used and are easily available from a number of good yarn spinning mills in the north and country wide mills. For exports, however, the weavingyarns spun by the 100% EOU mills with better quality are generally preferred. In addition to the twist control, such yarns are of low uster% value and less no. of imperfections.

PROPOSED PROJECT LOCATION

Availability of raw materials [yarns etc] and good concentration of skilled weaving work force, will decide the location of the project. The ideal locations for such project are centres of fabric manufacturing in the country.

COST OF PROJECT

For a grassroot and greenfield project i.e from acquiring the new land and including the margin for working capital, the overall cost of the project is estimated at Rs 29.23 Crores based on main imported plant. The breakup for the project components is as follows:

					    Rs. in lacs
Cost of Land and Site develop.			60.00

Buildings, 				       180.00

Cost of Plant and Machinery
				
	Imported [landed cost]   	      1680.00			
	Indeg. Including Plant utiltiies       260.00

Misc. Fixed Assets			       115.00

Prelim. and pre-operative costs		        95.00
Provision for contingencies 		       240.00
Margin for Working capital		       270.00     
   

TOTAL PROJECT COST			   RS 2900.00 

Considering the prevailing norms of financial institutions,it is proposed to finance the project under Debt-equity ratio of 1.5 to 1.0, the promoters contribution works out to 40% of the project cost. Of the debt, it is proposed that FE component can be financed by the central FIs and the balance Rupee loan part by any State SIDC. The breakup is thus,

A] Equity capital			 RS 1160.00  lac
B] LONG TERM LOAN,including
	FE loan, by the FI		 RS 1325.00  lac
C] Rupee term loan by SIDC	   	 RS  429.20  lac

In order to support the production from the main imported plant, the essential utilities required are,

A] 2 no. captive DGSet of 2 x 240 kva

B] 3 no. Air compressors along with Air dryer for providing compressed air to Airjet looms for fabric making,

C] 1 no. Boiler of 1.5 ton for creating steam for warp yarn sizing etc,and ofcourse one

D] basic ETP for teating the sizing discharge etc

EMPLOYMENT POTENTIAL

Even though the project is based on state of art and high tech area of Airjet weaving, the project provides an employment potential of upto 80 nos. persons per day.

PROJECT PROFITABILITY AND KEY FINANCIAL RATIOS

The project is an economically viable and profitable venture with healthy projections of financial ratios. A summary of project viability and key ratios is given for first 3 years of performance, as below:

Year			 	1		2		3
%Capacity Utilisation		75%		85		90
Actual Output-Lac mtr/year	38.7		43.8 	 	46.4
SALES REALISATION, RS LAC	1993		2259		2393
Gross profit to sale [GP %]	29.8		29.8		29.8
Net profit after Interest,
and Depreciation, Rs lac	105.8	        171.4		244
Simple payback period-Years	6 yrs

Average DSCR 			1.97

Break Even Point-optimum	57%