The company, which makes and exports pure wool and poly wool finished fabrics, operated at about 30 per cent capacity utilisation. Although export volumes increased from 6.66 lakh metres to 8.36 lakh metres in 1997-98, sales in the domestic market were affected by restrictions on sales to 25 per cent of the export volumes achieved, sources added.

In the first five months of the current year the capacity of the company's plant in Nagpur had improved to around 40 per cent and exports volumes had increased by about 45 per cent.

The company, which has so far concentrated on the premium segment of the market for fabrics, is now proposing to position its products between "Digjam" and "Park Avenue" suitings, sources added.

To improve capacity utilisation, the company has now decided to debond the export-oriented unit. Necessary approvals/sanctions from appropriate authorities are expected to be received by October this year and domestic sales would be pushed thereafter by creating an all-India marketing organisation.

In addition, the company proposes to enter new markets in the UAE, Latin America etc. The company achieved exports of about Rs 20 crore in 1997-98 against Rs 13 crore in 1996-97. A large part of the sales of Rs 73.82 crore went to a group trading company, Uniworth International, which is treated as deemed exports.

In 1997-98, deemed exports amounted to Rs 35.29 crore against Rs 19.84 crore in the previous year. It reported a net loss of Rs 3.93 crore in 1997-98 against a net profit of Rs 46.21 lakh in the previous year.