Kitex Garments gets nod from Karnataka government for garments unit
Kerala based Kitex Garments has got the nod for a garments unit from the Karnataka government and has earmarked around Rs 500 crore to set up the ready-made garments unit in Hassan Karnataka.
However, the approval from the government has put Kitex into a dilemma as it also has the approval from another state Andhra Pradesh which has offered tax benefits, free land and cheaper power to the company.
The company has already stated that it will come up with a manufacturing unit at Kochi this year and the decision on the second unit is likely to be taken in the coming months depending on the feasibility of the unit.
It will be a tough decision for Kitex as both states have made tempting offers to the company to invest in their respective states. The only thing which could work in Andhra Pradesh’s favour is the cost of power which is offered at Rs 1 per unit as compared to Rs 7 offered by Karnataka.
“The government of Karnataka has given approval to the project. Now depending on how fast the government clearances come through, the project will start. Our plan is to start commercial production by March 2019,” Chairman and Managing Director of Kitex Garments, Sabu M Jacob told BusinessLine.
“Initially, the unit will have capacity of 1,500 to 2,000 people. In Phase 1, it will produce up to 2-lakh pieces of infants garments. After that, we will expand every six months. We intend to complete the expansion by 2021,” he added.
Commenting on Andhra Pradesh’s proposal Jacob said, “The Andhra Pradesh government has given us some very compelling proposals to invest in that State. For instance, it has offered us free land, support in setting up the building, power at ₹1 per unit and salary for the staff for three years."
“Comparatively, power in Karnataka is being offered at ₹6-7 per unit. ESI and employer’s contribution to Employee’s Provident Fund are, however, being offered by both States”, he added.
Kitex produces 6.5 lakh pieces of finished garments per day, targeted at just-borns to babies up to the age of 24 months. It exports about 95 per cent of infant wear to the United States and the rest to Europe.
The company also engages in contract manufacturing for private labels such as Jockey, Carter, Babies R Us, Gerber and Mothercare.
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