Precot Meridian Limited,a leading manufacturer of yarn and fabrics,is planning to close down its fabric division since the division has not made any contribution to the company's profit.
According to the company,significant increase in input costs and continuing power cut in Tamil Nadu are the major reasons for loss in the fabric division.The fabric division contributes around 12 percent of the company's turnover of Rs 6 billion.
In order to diversify its product range,the company set up two undertakings,weaving and yarn processing undertaking at Pollachi in 2000 and Yarn dyeing undertaking in State Industries Promotion Corporation of Tamil Nadu Limited(SIPCOT)at Perundurai in Erode District to manufacture yarn-dyed shirting fabric in 2003,the company said in a statement to the National Stock Exchange.
The Board of Directors of PML has decided to exit from the fabric business and to sell or dispose the fabric division subject to the approval of the secured loan creditors and the shareholders.
Coimbatore-based Precot Meridian Ltd has its manufacturing units in Kerala,Tamil Nadu,Andhra Pradesh and Karnataka.The company's products include cotton yarn,sewing threads,fabrics and garments.
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