Unlimitedprojects: Terry Towels Project

Introduction:

There is a steadily growing demand of Terry Towels in the domestic, retail and export markets and such demand is driven by desire for better and hygiene based lifestyle. The various Indian Towel units are performing profitably with increasing market share.

A terry Towel project based on 16 nos. Terry Towel looms of high speed Airjet type [ to be sourced second hand in good condition] is proposed with best quality new Indeg. fabric dyeing/drying plants. The project has been conceived as an export-focussed unit, under the concessional 5% duty EPCG scheme. The unit is proposed to have an installed capacity of 16 x 200kg, i.e 3200 Kg/Day of finished Towel at max. achievable capacity of 85%.

Since the unit would be primarily catering to the international markets, the unit would be utilizing the 'second hand' towel weaving air jet looms from world renowned suppliers. The width proposed for towel looms will be 280 cm and 340 cm considering the market needs. Also, 50% of such towels looms will be equipped with 'Dobby' design device. This has been considered in order to give the unit a flexibility of manufacturing the complete range of toweling fabrics, which includes besides towels, towels for Gyms and clubs and bath-robes etc.

Plant & Machinery:

The cost of imported 'second hand' Airjet type looms will be about Rs. 335 lacs. The towel looms will be supported and balanced by pre-weaving, fabric dyeing and drying plants of best Indigenous make from Indian suppliers. The cost for indigenous production plants, as above, along with the supporting Plant utilities like the Boiler, Humidification, Air compressor, and Design Lab. and basic ETP plant is estimated at approx. 300 lacs. The plant has been envisaged to be eco-friendly and proposes to set up a useful basic effluent treatment plant, which has been incorporated as an integral part of the project.

The project would require 4 acres of land, of value approx. Rs50 lacs and the built up area of upto 1 acre that is 4000 sq. meters.

Raw materials & consumables:

The unit would be sourcing its requirement of raw material in the form of cotton 'carded' yarn of counts 13’s, 16’s, 2/20’s, 2/24’s indigenously, which are available from Spg. mills in the north. Based on a process loss of about 15% the unit would be consuming a total of 3.7 tonnes of cotton yarn per day at max capacity utilization. Varieties of consumable materials like Dyes & chemicals, pile yarn, processing chemicals and packaging materials would be required.

Cost of the project:

Sl. No.	Description	Cost (Rs. in lacs)
1.	Land & Site Development	50.00
2.	Buildings	240.00
3.	Plant & Machinery
	Imported	335.00
	Indigenous	300.00
4.	Misc. Fixed Assets	50.00
5.	Contingency & Pre-operative exp. @ 5%	50.00
6.	Margin money for WC	50.00
	Total	1075.00
	say,	10.75 crore

Means of Finance:

Promoters	375.00 lacs
Central Financial Institutions (term loans)	700.00 lacs

Manpower:

The project would be employing a total of 145 persons including 30 supervisory/technicians and 100 factory workers in three shift working. The rest will be management staff

Utilities:

The unit would require an installed load of 562 KVA. The total electricity requirement is planned to be approx. 11,000 units per month. One captive DG sets is proposed for contingency needs.

The unit would also be requiring a steam generation facility which would consist of 2 ton per hour multi-fuel type fired boiler for 7kg/cm2.

The total water consumption by the unit is proposed to be met by 1 borewell of 6” dia.

Production & sales:

With an installed capacity of 1120 TPA of toweling fabric on 350 working days per year; the unit is estimated to achieve 65%, 80% & 90% capacity utilization in the 1^st, 2^nd & 3^rd year of operations. Based on average Selling value of Rs 260/Kg, the unit is expected to achieve a total sales income of Rs. 2330 lacs by the 2^nd year. The project would thus deliver a Turnover to invest. of more than 2 to 1.

The airjet type terry looms would ensure minimum defects. The fresh grade is estimated to constitute 95% of the total production, second grade at 4% and the balance 2% of rejects. A selling price of Rs.260/- for the 1^st quality saleable grade for exports is assumed.

Recommendations: The project is a technically and economically Viable venture based on 16 nos. highspeed airjet towels looms in wide width and despite being of second hand level. The project will be able to deliver Gross profit of 20-22% on the sales; and enable the repayment of term loans [at 12% interest] over 1+7 years. The project is recommended for quick implementation over 8-10 months and preferably in a location with adequate Water availability.

(Note: Plants of other capacities are also possible. Please write to vpcs@unlimitedprojects.com for Project Report on this or similar projects)