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Sangam chalks out expansion strategy -- Pumps in Rs 30 cr to refurbish factories

Ratna Bhushan

NEW DELHI, Aug. 3

SANGAM India Ltd, the flagship company of the Rs. 250-crore Bhilwara-based Sangam group, has chalked out an expansion strategy for its mass market suitings brand, also called Sangam.

Speaking to Business Line, Mr. S.N. Modani, Managing Director, Sangam (India) Ltd, said 10,000 spindles are being added at the company's four factories in Bhilwara, to take its overall spindles strength to 38,000. About Rs. 30 crores is being pumped in f or the purpose.

Further, before December 2001, the company expects to have an additional 25,000 spindles, which will be put together at an estimated cost of Rs. 80 crores.

The company's factories deal with spinning, weaving, processing, and dress materials and upholstery individually. A fifth plant, also at Bhilwara, is being planned so as to be operational before the end of 2001.

The installed capacity at the company's processing division is currently 400 lakh meters annually. Among the players, Sangam supplies polyviscose dyed yarns to Grasim, Siyarams, Digjam and OCM.

The Sangam group is eyeing an overall turnover of Rs. 300 crores by March 2001, up from the present Rs. 250 crores.

On the advertising front, the Sangam brand is likely to test waters on regional channels (primarily Tamil and Bangla) before opting for a national-level ad strategy.

A commercial has already been shot in Mauritius, and will make its debut on air next month. The 60-second ad film will be broken up into 10- and 20-second bursts.

Mr. Modani said he was confident the commercial would strike a chord with the target audience. The overall ad budget for this year has been pegged at Rs. 1 crore. Apart from electronic communication, advertising on the print media is also being restricte d to regional channels at least for the next few months.

Priced between Rs. 120 and Rs. 200 a metre, Sangam caters to the middle- and lower-income level consumer. The brand is priced about 25 per cent lower than most organised mid-market brands, and about 7-10 per cent higher than unorganised sector players.

Mr. Modani said there was hardly any brand in the polyester viscose category to compete directly against Sangam. However, he named BSL and Mayur as brands competing for the same target market as Sangam.

``We have identified a gap in the suitings market and intend to stay within our chosen segment,'' he said.

The brand is being retailed at 10,000 multi-brand retail outlets and is serviced through 1,000 wholesalers apart from 250 agents.

Sangam India has set itself an export target of Rs. 15 crores for this fiscal, up from the Rs. 5 crores of exports it did in March 2001.The company also retails another brand, Anmol, priced marginally lower than Sangam.