The processing unit will come up adjacent to the group's existing weaving and spinning facility at Kosi in Uttar Pradesh. The total cost of the project is expected to be between Rs 60-70 crore. The project cost will be financed through internal resources and loans.

Shamken group chairman HB Chaturvedi told The Financial Express that land has already been acquired for the processing unit and it will be operational by mid-2000.

The project will be set up under group company Shamken Multifab. ``The group will bring in about Rs 15 crore while the balance requirement will be met through a loan under the Technology Upgradation Fund (TUF),'' said Chaturvedi.

The processed fabric will be sold to the company's own garment units, other garments units and exported, he added.

The group is alsonegotiating takeover of marketing units in London and Frankfurt. ``We intend to acquire the first such marketing outfit in London followed by Frankfurt,'' said Chaturvedi.

The group plans to use the marketing outfit to export its woven, knitted and upholstery products and even keep stocks abroad to cater to the small buyers in Europe. ``The marketing company will act as an interface between buyers in Europe and our manufacturing facilities in India, making the products available at that location,'' he said.

The group has also acquired a spinning unit - Dwarikadhish Spinners Ltd in Punjab from the Govind Hari Singhania group at an undisclosed amount. The Punjab State Industrial Development Corporation (PSIDC) is the other promoter of the project, which is yet to be set up.

The spinning unit, which will have an installed capacity of 25,000 spindles, will be set up in two phases and will cost Rs 58 crore. In the first phase, the group will set up 14,000 spindles at a cost of Rs 36 crore which will be madeoperational by October 1999. An additional 11,000 spindles will be added later within the next one year at a cost of Rs 22 crore.

The project will have an equity base of Rs 28 crore in which PSIDC will contribute Rs 8 crore. In the first phase, the equity base of the project will be Rs 16 crore in which Rs 4.5 crore will be by PSIDC and Rs 11.5 crore by Shamken, which has already been put in.

In the second phase, the equity base will be increased by Rs 12 crore in which PSIDC will contribute Rs 3.5 crore. The group intends to take loans to the tune of Rs 28.5 crore from ICICI, IFCI and IDBI.