Envoy Textile to set up spinning project expansion unit

World's first platinum-certified green factory Envoy Textile Limited has decided to invest Tk176 crore to enhance the production capacity of its spinning project by setting up an expansion unit.

The project is scheduled to be completed by July 2022, subject to a usual business and health environment condition.

The new project's production capacity will be 3,710 tonnes of yarns per year.

Out of the total investment, the company will provide Tk56 crore from its retained earnings and the rest will come from banks.

Talking to The Business Standard, Envoy Textiles Chairman Kutubuddin Ahmed said the firm is making investments to build new capacity to produce blended yarn, which is expected to help reduce over-rate cost.

"As an existing factory, it needs comparatively less investment than a new one," he added.

He also mentioned that the company is adjusting its capacity preference, buoyed by the prediction that demands for fabrics will soon go beyond the pre-pandemic level riding on vaccination drives in the apparel sector's two key-export destinations – Europe and the USA.

Kutubuddin Ahmed, who is a former president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), also said the firm produces high-quality fabrics so that it does not need to do any marketing to sell those.

"The US-China trade tensions also have helped us expand the capacity to produce a blended yarn that used to be imported from China," he said.

"Currently, the government has put some non-tariff hassles on Chinese-origin products as the supply chain is more traceable to identify the origin of a product."

The company raised Tk90 crore – per share Tk20 premium – from the capital market in 2012. 

In the July-March period of 2021, the revenue of the company was Tk605.7 crore and the net profit stood at Tk9.74 crore.

The company recommended a 5% interim cash dividend for its shareholders for the year ending on 30 June 2021.

Sponsors and directors jointly hold 45.58%, institutional investors 43.59%, foreign investors 0.06, and general investors 10.77% shares of the company.

The last trading price of the company's share at the Dhaka Stock Exchange was Tk33 on Thursday.