Pioneer moves ahead on consolidating and modernising its Embroidery Business

Pioneer Embroideries Limited (PEL), one of the key players in the Embroidery & Laces (EL) business in India and owner of brand "HAKOBA", is shutting down its labour-intensive embroidery manufacturing unit at Coimbatore. The factory land and building will be monetised, and the old, low-speed embroidery machines would also be disposed off, as these have already served their useful life. The Company shall shut down Coimbatore manufacturing unit, effective July 31, 2022.

PEL continues its strategic initiative of modernising and consolidating EL business. PEL had earlier announced that existing embroidery units will be sold over a period of time and it would consolidate its embroidery business at Shree Ganesh Textile Park, Degaon, Dhule, to benefit from enhanced efficiency and economies of scale.

PEL enjoys good marketing reach and distribution network to cater to the domestic and overseas customers. In the near term, PEL will outsource embroidery manufacturing to serve its customers and retain overall current level of business. PEL shall also transfer Bobbin Lace machines to its existing factory at Sarigam, Gujarat, over the next two months, and does not expect any loss of business in the meantime.

PEL will use sale proceeds towards ongoing state of the art new embroidery project at Shree Ganesh Integrated Textile Park, Degaon, Dhule, Maharashtra.

Hence, Coimbatore closure will have insignificant impact on the overall sales and would prove EBIDTA accretive over medium-to-long term.

Shares of Pioneer Embroideries Limited was last trading in BSE at Rs. 47.50 as compared to the previous close of Rs. 45.80. The total number of shares traded during the day was 11583 in over 316 trades.

The stock hit an intraday high of Rs. 52.00 and intraday low of 45.35. The net turnover during the day was Rs. 567017.00.

Source : Equity Bulls

Keywords

PioneerEmbroideries INE156C01018 HAKOBA Coimbatore PlantShutdown AssetSale