- Sharadha Terry Products secured a US$1.75 million Good Fashion Fund loan to build Sri Gugan Mills, a sustainable bath and area rugs unit in Metupalayam, Tamil Nadu.
- The plant targets ~4 million sq. meters of annual output using dope-dyed polyester and cotton, with recycled-fiber rugs in development.
- Sustainability upgrades include an effluent treatment plant recovering ~98% of wastewater, safer dyeing inputs, and renewable-energy use.
- The project is expected to create 200+ local jobs and marks the Good Fashion Fund’s final investment ahead of a planned Fund 2.0.
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The investment reflects both Sharadha Terry’s strategic diversification into bath and area rugs — a product category adjacent to its core strength in bath textiles — and a rising demand for sustainable manufacturing practices in the home textiles sector. Leveraging its established MicroCotton brand reputation and existing vertical integration, Sharadha Terry is positioning itself to capture value in higher-margin, sustainable segments likely to benefit from regulatory and buyer pressures.
Operationally, the scale (4 million sq. meters annually) and sustainability architecture (ETP recovering 98% of wastewater; elimination of hazardous chemicals; use of renewable energy) suggest strong cost and compliance advantages. The move could also reduce long-term environmental liabilities and improve margins through resource efficiency.
From a finance/investment perspective, the loan structure (rather than equity) preserves ownership; impact investors like Good Fashion Fund often combine financial returns with environmental/social metrics. This investment is GFF’s final under the existing fund, indicating confidence in the thesis; the success of Sri Gugan Mills could help shape Good Fashion Fund 2.0.
Risks include execution: installing tufting machinery, developing recycled fibre processes, and establishing the ETP will require technical expertise and disciplined project management. Market risks include competition from cheaper producers, fluctuations in raw materials (especially cotton, polyester, recycled fibres), and potential trade policy or logistics disruptions. Also, as sustainable certifications and buyer expectations evolve rapidly, keeping ahead of regulatory and buyer demands will be critical.
Strategically, Sharadha Terry may gain increased access to high-end and environmentally conscious global brands, as well as differentiated channels valuing sustainability. Local benefits include job creation (~200 people), and community engagement, which bolster social license to operate. The move strengthens India’s position in sustainable textile manufacturing — particularly in bath and rugs segments — which could attract more impact capital.
Open questions: What are Sharadha Terry’s downstream market channels for the new rugs line? What pricing premium can it command, and what are expected returns on the additional capex? How mature are its recycled fibre processes? What is the timeline for capacity ramp-up and environmental approvals? Finally, what triggers or KPIs has Good Fashion Fund set, and how will performance be measured?
Supporting Notes
- Sharadha Terry Products Pvt. Ltd. obtained a US$1.75 million loan from the Good Fashion Fund for its new rugs unit in Metupalayam, Tamil Nadu.
- The new unit, Sri Gugan Mills, will manufacture bath and area rugs with annual capacity of 4 million square meters.
- Product mix to include dope-dyed polyester and cotton rugs; additional recycled fibre-based rugs are under development.
- Sustainability features: dedicated effluent treatment plant recovering up to ~98% of wastewater; elimination of hazardous chemicals commonly used in conventional dyeing; significant reduction in water consumption.
- Use of renewable energy: Sharadha Terry operates captive generation via a 5.1 MW wind power and 10.1 MW solar plant.
- Employment: expected to create over 200 jobs, both male and female, drawn from the Metupalayam region.
- The Good Fashion Fund is managed by FOUNT and was initiated by Fashion for Good, Laudes Foundation, The Mills Fabrica, and Rabobank; this is GFF’s final investment under its current portfolio with plans for Fund 2.0.
- Public presentation: Sharadha Terry introduced its new rugs product line under ‘Sharadha Rugs’ at the Heimtextil Expo 2025 in Frankfurt.