Welspun announces capacity expansion in home textiles

Welspun has approved capacity expansion plan for the Home Textile business through debottlenecking and rebalancing of facilities at Vapi and Anjar. It will be a capital light, quickturnaround expansion, resulting in increased capacity of Towels by 7%, Bed Linen by 20% and Rugs& Carpets by 80%. The company is expected to spend around ₹ 2,250 mn for the expansion over FY21 & FY 22. The benefits of this expansion will start accruing in phases from as early as Q1 FY22. Thisexpansion has a revenue potential of ₹ 12,000 mn from second year of operation.

Welspunhas re-calibrated its investment in Advanced Textile expansion project reducing the sizeof investment from ₹ 4,957 mn to ₹ 2,996 mn. The new Disinfectant wipes line is expected tocommence production in February 2021 while the expansion of Spunlace business is expected tocommence operations by September 2021. These would help this business achieve topline of around₹ 6,000 mn by FY 23.

Capex:

Till date Welspun has spent ₹ 2,930 mn in capex and for the full year it is expected to be around ₹ 5,000mn including the investment announced for the home textile business. The company’s net debt is expected to remain below ₹ 24,000 mn as on 31st March 21.

Welspun’s flooring business has been witnessing steady growth. Hard flooring plant is running at optimum capacity due to the strong demand and order book.While the capacity of the hard flooring plant has been doubled in January 2021, it is being furtherdoubled by Q2FY22 to cater to the growing demand. Soft flooring has also started gaining tractionwith strong enquiries from US, Canada & ROW. In order to optimize capacity utilization of the softflooring plant, Welspun plans to produce rugs and carpets for its Home Textile customers from Welspunflooring facility, as its facility at Vapi is running at peak capacity

Mr. B.K. Goenka, Chairman, Welspun Group, said, “I am pleased withthe all-round performance during the quarter. In tough times, the Welspun family has been at the forefrontconverting challenges into opportunities and 2020 was no different. We worked harder than ever before &our efforts are being recognized by clients & other stake holders.

Over the past few years we have made significant investments in the areas of sustainability, circularity,“SPUN” including amongst others, and going forward we are bringing all such initiatives under overarchingframework of ESG. We have achieved high rating for ESG by one of the leading global rating agencies andthe Board is committed to accelerate this process to take it to the next level.

We continue to pursue our differentiation strategy through branding and innovation, coupled with thethrust on digitalization and E-commerce initiatives. We are well poised to meet the increasing demandemanating from the structural shift in the global home textile industry”.