Envoy Textiles, ADB ink €10.8m deal to install green factory
Envoy has an annual denim fabric production capacity of 52 million yards—about 10% of the country’s total capacity
Envoy Textiles Limited entered into a €10.8 million ($11.2 million) loan facility agreement with the Asian Development Bank (ADB) to support and finance the purchase and installation of energy-efficient spinning machinery and other equipment to expand sustainable textile production and create local jobs.
The proceeds of the loan will be used to fund a second yarn spinning unit at the company's plant in Mymensingh's Jamirdia area, said an ADB press release.
The new automated and energy-efficient unit will have an annual yarn production capacity of 3,600 tonnes mainly used for in-house production of denim fabrics. The construction and operation of the new spinning unit are expected to create 250 new jobs.
"The ready-made garment industry is a key driver of Bangladesh's economy, accounting for over 80% of the country's total export earnings, and Envoy Textiles is the leading denim fabric manufacturer," said ADB Vice-President for Private Sector Operations and Public–Private Partnerships Ashok Lavasa.
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"Modern spinning equipment will increase yarn production capacity, reducing reliance on imported yarn and enhancing the industry's efficiency, sustainability, and energy efficiency," he said.
"This project marks the ADB's return to financing Bangladesh's textile sector after two decades, and it will help to crowd in much-needed financing to this strategically crucial part of the economy," he added.
According to the press release, the project will reduce electricity consumption and greenhouse gas emissions through the use of energy-efficient and modern equipment. Additionally, the ADB will help Envoy to develop a gender action plan that will increase career opportunities for women employees, promote gender-inclusive procurement, and promote gender inclusion in the workplace.
"We are delighted to receive our first-ever financing from an international lender, and it is even more meaningful that it comes from the ADB as we share the same vision of quality of service, inclusivity, and sustainability," said Envoy Textiles Founder Kutubuddin Ahmed.
"Partnering with an internationally reputable financial institution such as the ADB is an affirmation of Envoy's direction and an important step in our sustainable growth," he added.
Envoy Textiles is a manufacturer of 100% export-oriented denim fabric. It is the first rope denim plant in Bangladesh with highly sophisticated machinery from the USA, Europe, and Japan. The commercial operation of the company started in March 2008.
Envoy 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.
Envoy Textiles Limited 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 from one year ago.
Its earnings per share (EPS) stood at Tk2.12 and its net asset value per share stood at Tk39.40.
Till October 2021, sponsors and directors held 57.93%, institutional investors 34.80%, foreign investors 0.07%, and general investors 7.20% of the shares in the company.
The last trading share price of the company on the Dhaka stock exchange was Tk43.90 on Sunday.
