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Welspun India plans Mexico unit with eye on tax breaks
Thursday, May 31, 2007
Home furnishing maker Welspun India Ltd. plans to set up a decorative bedding plant in Mexico, to leverage the regional free trade agreement and cut freight costs for supply to the United States.
Welspun said on Thursday the plant would have the capacity for 1.04 million bed sets a year and mark an increase in the firm`s ongoing expansion cost.
"We tweaked our expansion plans looking at the rising demand for bed-sets," Welspun President Akhil Jindal said.
He told Reuters the unit would gain from tax breaks under the North American Free Trade Agreement and start production by December.
Welspun, whose bed capacity now stands at 0.76 million sets, has revised its expansion project cost to 9.04 billion rupees from 6.5 billion rupees, with the latest project.
The expansion was part of a plan to increase terry towel output to 41,000 tonnes a year, bedlinen to 45 million metres and yarn making capacity to 100,000 spindles, Jindal said. It was being funded through a mix of equity, own funds and bank loans.
Also on Thursday, the company reported a 4 percent fall in January-March net profit to 103 million rupees due to higher tax charge.
Sales in the quarter rose 14.2 percent to 2.34 billion rupees and core profits rose 26 percent to 516 million rupees.
The company said the quarter to June could be hit by a hardening rupee. The rupee has risen 8.31 percent against the dollar in 2007.
Welspun closed today -1.06 percent at 70 rupees on BSE
Welspun said on Thursday the plant would have the capacity for 1.04 million bed sets a year and mark an increase in the firm`s ongoing expansion cost.
"We tweaked our expansion plans looking at the rising demand for bed-sets," Welspun President Akhil Jindal said.
He told Reuters the unit would gain from tax breaks under the North American Free Trade Agreement and start production by December.
Welspun, whose bed capacity now stands at 0.76 million sets, has revised its expansion project cost to 9.04 billion rupees from 6.5 billion rupees, with the latest project.
The expansion was part of a plan to increase terry towel output to 41,000 tonnes a year, bedlinen to 45 million metres and yarn making capacity to 100,000 spindles, Jindal said. It was being funded through a mix of equity, own funds and bank loans.
Also on Thursday, the company reported a 4 percent fall in January-March net profit to 103 million rupees due to higher tax charge.
Sales in the quarter rose 14.2 percent to 2.34 billion rupees and core profits rose 26 percent to 516 million rupees.
The company said the quarter to June could be hit by a hardening rupee. The rupee has risen 8.31 percent against the dollar in 2007.
Welspun closed today -1.06 percent at 70 rupees on BSE
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