Raj Rayon Industries restarts partial production at its Silvassa plant

Raj Rayon industries Limited (RRIL), one of the leading manufacturers of Polyester Yarn in India with product range including Polyester Texturised Yarn (PTY), Partially Oriented Yarn (POY) and Fully Drawn Yarn (FDY) has restarted partial production at its high technology Silvassa plant, in the Union Territory of Dadra & Nagar Haveli, which was discontinued by the company two months back.

In March 2014, Raj Rayon Industries’ production in all plants – ie continuous polymerisation (CP), partially oriented yarn (POY),fully drawn yarn (FDY) and polyester texturised yarn (PTY) – was temporarily closed, due to negative margin.

The CP plant was shutdown due to shortage of raw materials in the domestic market for manufacture of polyester chips, and reliance on high-cost imports impacted by the Indian rupee depreciation. The company was unable to pass on the increased cost to its customers due to the economic slowdown.

The increase in low-margin fabric trading and a decline in the sale of high-margin yarn also affected RRIL’s financials.

Raj Rayon Industries Ltd has now announced that the CP plant will restart after successful commissioning of Direct Polymer Melt POY plant (DPM POY plant) which is scheduled to be operational in July 2014.

At the same time, Raj Rayon Industries has partially started production in its polyester texturised yarn plant, while all others plants of the company are still closed. The company announced that all the plants will be fully operational once the margin improves.

In the five months of production in FY15, the company aims to earn revenue of INR6,000m and EBITDA margins of 5%-6%, aided by low raw material prices and its domestic availability. The company has no further capex planned.

RRIL has a strong presence in the domestic market with wide array of high quality, cost effective products – a mix of existing proven products as well as newly developed products. RRIL products are exported to International clients in countries such as: Brazil, Chile, Colombia, Egypt, Guatemala, Iran, Mexico, Morocco, Peru, Poland, Spain, Syria, Thailand, Vietnam etc.