Rajapalayam Mills to invest Rs. 600 crores in a new spinning unit

Rajapalayam Mills Group has recently signed a memorandum of understanding with the Tamilnadu Government for setting up of a spinning unit at an investment of Rs. 600 crores. This new unit will be established at the PM MITRA Mega Textile Park coming up at Virudhunagar. In recent year, Rajapalayam Mills has reshaped itself to a better position by strengthening its product lines with more value-added customised yarn counts viz. mercerized yarn, melange yarn, core yarn, etc. to take full advantage of the current market trend. It is continuously monitoring various process parameters and also implementing various system controls to deliver consistent quality of yarn and fabric to the end customers and leading brands.

The company has strengthened the product lines with automation such as a fully automatic contamination removal system at blow room stage, 100% ring spindle monitoring system, installation of link coners, etc., which has resulted in improvement in operating efficiencies. Efforts are being taken continuously to scale up the production and sale of value-added counts which will replace commodity counts in the forthcoming years.

Modernisation and Expansion

In the last 2 years, Rajapalayam Mills has undertaken multiple modernisation and expansion projects. As a part of continuous thrust on modernisation programme, Rajapalayam Mills has replaced all old open end spinning machines with most modern fully automatic OE machines. In addition to this, the company has also invested in modernising other textile machinery and equipment. Rajapalayam Mills has also installed a second line of yarn mercerising machineries.

The company has implemented the expansion of its spinning capacity by adding 18,144 spindles through the utilisation of the existing building space. This project was commissioned during March 2022. The company has also added 24 air jet jacquard looms, which increased the existing looms capacity from 122 looms to 146 looms in the existing loom shed without incurring any additional construction cost. All the new 24 jacquard looms were commissioned during March 2022. Another eight jacquard looms were commissioned during the current year. The total capital expenditure during FY 2021-22 including the above projects was Rs 155.14 crore, which has been funded from the proceeds of the rights issue, internal accruals and term loans from banks.

Expansion of Fabric Division

The quality of fabric produced by Rajapalayam Mills has been well-accepted both in domestic and export markets and the company receives lot of enquiries from leading brands across the globe for supply of processed fabric. Encouraged by the demand, the company has decided to further expand its fabric division by adding 166 looms and also decided to establish a new fabric processing unit with a capacity to process 50,000 metres of fabric per day at Rajapalayam. In order to strengthen the electrical infrastructure, the company has decided to install 110 KVA | 11 KVA own substation inside the mill’s premises at Rajapalayam. The total outlay for all the above capital expansion proposals is Rs 400 crore, which will be funded from internal accruals, equity instruments & loans from banks.