Mumbai's loss appears to be Gujarat's gain. Century Textiles & Industries is in the process of downsizing its textile mill operations in Mumbai by half due to the high cost involved in the metro, while weaving plans of setting up a cotton mill in Gujarat.
The company has decided to progressively reduce the production at its textile mill in Mumbai, where currently about 1,200 looms and 77,000 spindles are in operation.
B K Birla, chairman, Century Textiles & Industries said, the decision to cut down operations was due to the high taxes and water charges. "Many of the mills have closed down in Mumbai," he said.
The company had decided to bring down the production of fabric gradually by reducing the number of looms in operation to about 500, as also reducing the requisite number of spindles and ancillary machinery needed to continue the operations viably.
The downsizing is likely to be completed by April next year. As far as the company's Mumbai mill land was concerned, Birla said, it was examining all possibilities. However, it would take another ten months to cut down the level of operations and till then the company would not be able to utilise the land for any other purpose.
In Gujarat, the company was pursuing growth plans in a full-fledged manner. Century would set up a cotton mill in Gujarat at the cost of Rs 500 crore (Rs 5 billion).
Birla said, the Gujarat government was extremely proactive and would allocate land over the next 3-4 months. "They have already shown us the location," he said. The cotton mill would be completed by the end of next year.
The investment in the cotton mill would be funded through a mix of internal accruals and debt. "We are now expanding and the banks will be willing to fund our growth plans," said Birla.
Century was also expanding its cement unit, which would be completed by October. The company was adding another 1.5 million tonne capacity, taking the total capacity to 8 million tonne units.
The investment in the cement unit was in the region of Rs 150 crore (Rs 1.5 billion).
