Envoy Textile to earn Tk176cr from new spinning unit

The new spinning unit, which got into commercial operation on 1 April, will add Tk176 crore to the annual turnover of Envoy Textiles Limited, according to the entrepreneur.

The manufacturer of 100% export-oriented denim fabric has an annual denim fabric production capacity of 52 million yards – about 10% of the country's total capacity.

It has the world's first platinum Leadership in Energy and Environmental Design (LEED) denim manufacturing facility certified by the United States Green Building Council.

The company said in its price-sensitive statement that the new project involving Tk176 crore has a production capacity of 4,200 tonnes per year.

It said due to the delay in machinery shipment amid the Russia-Ukraine war, it could not go into commercial operation as per the original deadline of July last year.

Talking to The Business Standard, Envoy Textiles founder Engineer Kutubuddin Ahmed said the new unit's production capacity was initially estimated at about 3,600 tonne per annum, but "during piloting we have been able to increase it to 4,200 tonnes through increased efficiency". 

He said the new unit will produce blended yarn from poly and cotton fibers, whose market value would be $4 per KG of yarn.

Out of the total investment, the company has provided Tk56 crore from its retained earnings, and the rest came from banks.

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

"The US-China trade tensions have also helped us expand our capacity to produce 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."

Envoy Textiles was listed on the bourses in 2012 for business expansion. The firm raised a total of Tk90 crore with a Tk20 premium for each share.

From July to March 2022, the company made revenue of Tk889.24 crore, which was Tk605.70 crore in the same period of the previous year.

During the period, its net profit stood at Tk35.56 crore, which was Tk9.74 crore a year ago.

Its shares have traded on the floor at Tk43.90 since September last year on the Dhaka Stock Exchange.