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Kitex Garments on track to implement Rs 910 crore expansion plan

The onging expansion will help the company reach revenues of Rs 2,165 crore by 2024-25 with an average growth of over 20 per cent every year from the Rs 559 crore revenues in 2017-18.

twitter-logo PB Jayakumar   New Delhi     Last Updated: January 10, 2019  | 20:40 IST
Kitex Garments on track to implement Rs 910 crore expansion plan

Kochi-based Kitex Garments Limited, currently the third largest infant apparel manufacturer in the world, is on track  to raise production capacity by over 3.5 times to produce 22 lakh pieces per day by 2025 from the current six lakh pieces of finished garments per day for 'just-borns' and babies up to two years.

"We will be adding capacity across the value chain by increasing knitting and processing capacity to 80 tonnes each and is expanding the sewing production capacity. We will also diversify into new product lines like socks for children, baby diapers and baby wet wipes, besides setting up a cotton spinning mill with a capacity of 80 tonnes per day as part of vertical integration," said Sabu M Jacob, chairman and managing director, Kitex Garments.

He said the ongoing expansion with an estimated Rs 910 crore will help the company reach revenues of Rs 2,165 crore by 2024-25 with an average growth of over 20 per cent every year from the Rs 559 crore revenues in 2017-18. While land identification is complete, machinery and supplier identification and building and infrastructure planning is going on.

He said the baby clothing market accounts for 33 percent of the total global children wear market. With a market size of $60 billion, it is expected to grow at a compounded annual growth rate of 4.4 percent to reach $67 billion by 2019. The stock exchange listed Kitex exports 90 per cent of its production to the US and the rest to Europe and is a leading supplier to brands and retailers like Walmart, Target, Amazon, Carter's, Oshkosh, Gerber, Buy Buy Baby, Sam's Club, Family Dollar, jet.com etc. The US children's wear market had grown at a modest rate of 4.5 compounded annual growth rate (CAGR) over 2015-2019 period and is expected to continue a similar trend, he said.

The US-China trade war impact could favour countries like India and the Chinese market has become unviable for garmenting due to increased cost of cotton and other overheads. Further, increase in cotton cost by 25 percent and imposition of duty on cotton imports by 10 percent have made matters worse, he said.

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