Nov. 6, 2009 (The Hindu Business Line) --
R. Balaji
The expansion of the facility, which makes sports shoes exclusively for Nike (NYSE:NKE) , will also happen at its own SEZ about 100 km west of Chennai.
According to reliable sources, this will mark the start of a continuous expansion programme, in line with market requirements, that will see “four-five more factories” at the site through FDI.
This will make it the largest production facility owned by the Feng Tay, which has over 14 factories across South-East Asia. Feng Tay, a Rs 4,000-crore group, has set up the SEZ through Cheyyar SEZ Developers, which houses Lotus Footwear Enterprises, the manufacturing unit.
On the production capacity, the source said, the limitation is the skill level of workers who are recruited as raw hands and trained at the factory. Lotus Footwear now produces about 3.50 lakh pairs of shoes a month and the production is “going up by the day” as skill levels improve and is set to reach close to about 4 lakh pairs in November.
In 2010 “another large factory like the present one” will be in place, the source said. Subsequently, in stages, the company plans to set up more such facilities making it one of the largest FDIs in the region, the source said while declining to divulge any numbers. The key point would be that it is a labour intensive business and by March 2010 over 6,000 employees would be churning out shoes at the SEZ at the existing facility, the source said.
This makes Lotus Footwear a beneficiary of a structured package of incentives the State Government has announced to labour intensive industries. The details of the incentive package are yet to be announced.
Regarding the ongoing investments, the source said that the company has brought in over Rs 160 crore and the rest is in the pipeline. Despite the global economic slowdown Feng Tay is among the few manufacturing facilities continuing with its expansion programme. The company is also in the process of expanding the related infrastructure, including warehousing for finished goods.
