SV Pittie Sohar Textiles (FZC) SAOC, which is establishing a USD 300 million Cotton Yarn manufacturing project in Sohar Free Zone, started production ahead of the target date and recorded profits in the first nine months of commercial operations.
The Company reported a revenue of USD 24.3 million and Profit After Tax of USD 6.4 million during the 9-month period, from April 2019 till December 2019 (Un-audited) The financials are in line with the Company’s estimations for financial year 2019-2020 in which the company expects to generate total revenues of USD 65 million. The company has signed offtake sales agreements for the next 2-3 years, with yarn buyers worldwide to the tune of USD 875 million.
The company had commenced commercial production on the first Unit in December 2018 and the second Unit in October 2019, which reflects 50% of the overall yarn manufacturing capacity proposed to be established i.e. equivalent USD 150 million of project value.
The same was funded in Debt Equity ratio of 70:30 i.e. USD 105 in Term Loan from Sohar International and USD 45 million in Equity from ShriVallabh Pittie Group, The Sultan Special Forces Pension Fund and Al Jeel Al Saeid (Part of Al Thabat Holding Company).
The robust performance in the first nine months of operations itself, demonstrates the Promoters experience and execution capabilities in implementing textile projects in a timely and profitable manner. The same reiterates the company’s vision of being a performance and employment driven company with focus on the most economical and efficient utilization of available resources.
The textile plant deploys best-in-class machinery and the manufacturing process is highly automated. The compact cotton yarn produced in the units are of premium grade with raw materials, namely organic cotton, being imported from USA, Australia, and Turkey whilst the finished product is being exported to Pakistan, Bangladesh and China.
SV Pittie is now proposing to start work on the remaining 50% yarn manufacturing project (USD 150 million in value) and has mandated Sohar International for syndicating the Term Loan requirements of USD 105 million.
The company already has in place Term Sheets from local Banks for participating in the Term Loan and is in advanced discussions with other Banks to achieve financial closure. The promoters are committed to fund the Equity portion of USD 45 million for the expansion project which is expected to be completed during financial year 2020-21 (which will denote the first full year of operations on the cotton yarn manufacturing project.)
SV Pittie’s yarn manufacturing project is pledged to contribute significantly to the In- Country Value (ICV) for Oman in terms of generating significant export revenue to the tune of USD 240 million every year.
It’s providing direct employment opportunities to more than 1500 people, stimulating many indirect job opportunities and forming a solid base for various upstream and downstream entrepreneurial opportunities for SMEs.
SV Pittie Sohar Textiles is part of ShriVallabh Pittie Group, India, a more than 100 year old group and one of the largest manufacturers of compact cotton yarn in the world.
It is worth mentioning that the Company has employed more than 1000 Omani women in its project.