PEL has already placed the order for major equipment with a Germany-based manufacturer of quality textile extrusion equipment, along with advance payments, which would enable secure delivery by Q3 FY 2022-23. The equipment is being primarily financed through a German Bank, the company said in a media release.
Construction work on the land adjoining the company’s existing manufacturing plant at Kala Amb, Himachal Pradesh, is progressing well, with the foundation work already completed.
Pioneer has till date incurred capital expenditure of over ₹750 lakh, presently funded through internal accruals, and is negotiating financial closure with its lenders.
As communicated earlier, with this expansion, PEL plans to improve its presence in newer segments like home textiles and technical textiles and would be primarily manufacturing POY (Partially Oriented Yarn) and DTY (Draw Textured Yarn)-based speciality textile products. These products, non-apparel in nature, have buoyant demand in both domestic and international markets.
The SPFY business contributes close to 90 per cent of PEL’s turnover, and in the first half of the current year, the business clocked revenues of approximately ₹12,740 lakh, up from about ₹6,970 lakh in the previous corresponding period. As the average capacity utilisation is high, proposed increase in capacity should result in enhanced turnover without a major time lag.
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