Textured Jersey Lanka Plc (TJL) said on Thursday that it was looking for a fabric mill and alternate energy sources as means to remain competitive amidst challenging market and operating conditions.
The lookout for an operating fabric mill marks a change from its previous plans to pursue an organic expansion within the Avissawella BOI Zone.
In a statement, TJL said that during the financial year ended 31 March 2012, the company invested a small portion of the funds raised through the IPO in addressing bottlenecks within the existing production facility, which jad assisted in increasing capacity as well as improving efficiency.
“Given the changes in the global and local macroeconomic environment, immediately after the listing in July 2011, the Board of Directors of Textured Jersey Lanka PLC (TJL) has decided to hold back the proposed organic expansion within the Avissawella BOI Zone. After evaluating different options, the Board feels that TJL’s expansion should be by way of acquiring an operating fabric mill within the South Asian subcontinent,” the statement added.
“Evaluations with regard to these acquisitions are currently ongoing; however a time line has not been decided yet. Funds raised through the IPO will be utilised for this proposed acquisition. This will provide the company access to an operating fabric mill and the results would be faster than investing in an internal expansion,” the company added.
It also said the recent fuel price hike, which resulted in a Rs. 40 increase in the price of furnace oil, had adversely impacted TJL’s energy costs.
In this respect, the Board is evaluating options on an alternative energy source, including but not limited to coal and bio-mass, which will require an investment by the company into the relevant technology.
“Such investment would enable the company to enjoy substantial savings to its future energy cost,” Textured Jersey added.
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Textured Jersey looks for operating fabric mill in South Asia, alternate energy sources