Envoy Textiles to invest Tk97cr to increase blended yarn production
The expansion unit will focus on producing cotton-polyester-spandex core-spun yarn to meet rising demand, according to a filing with the stock exchange today
Envoy Textiles Limited has announced plans to invest Tk97 crore in a new spinning unit, which will enhance its production capacity by 4,550 tonnes annually.
The expansion unit will focus on producing cotton-polyester-spandex core-spun yarn to meet rising demand, according to a filing with the stock exchange today.
The project, expected to complete by December 2025, will be financed with 30% equity (Tk29.19 crore) from retained earnings and 70% debt (Tk68.11 crore) from bank borrowings, the disclosure read.
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The expansion project will feature state-of-the-art ring spinning production facilities equipped with European and Japanese machinery.
According to the disclosure, approximately 60% of the yarn produced will be utilised in-house for denim production, while the remaining 40% will cater to the deemed export market. The company estimates a payback period of 4.53 years for the expansion.
Tanvir Ahmed, managing director of Envoy Textiles, told The Business Standard, "Due to the growing demand for blended yarn, the company decided on the expansion."
He highlighted that this expansion will more than double the company's blended yarn production capacity.
"Our current production capacity for blended yarn is approximately 4,380 tonnes per year, or 12 tonnes per day. With the new unit, this will increase to 25 tonnes per day," he said.
Now, the company will appoint a contractor for the civil works of the project, and at the same time, it will open a letter of credit to import capital machinery, he added.
Profit surges by 134% in Q1
Envoy Textiles Limited reported a 134% year-on-year surge in profit in the first quarter of the current fiscal year (July–September), posting a net profit of Tk25.33 crore, up from Tk10.82 crore in the same period last year.
The company also achieved a 40% increase in revenue, which rose to Tk439.94 crore during the quarter.
Earlier, Envoy Textiles recommended a 20% cash dividend for its shareholders for the 2023-24 fiscal year.
It had paid a 15% cash dividend for its shareholders for FY23.
According to the disclosure, it's EPS increased by 84% to Tk3.58 year-on-year, which was Tk1.95 by the end of FY23. The net profit of the company stood at Tk60.04 crore in FY24, up from Tk32.73 crore compared to the previous fiscal.
