Metro Spinning factory to remain closed for an additional year
This extension is necessary to complete the renovation of its factory and increase production capacity, said the company
Metro Spinning Limited, a subsidiary of Maksons Group, has decided to extend the suspension of its production operations for an additional year.
This extension is necessary to complete the renovation of its factory and increase production capacity, said the company.
The spinning mill announced the closure of its factory in a filing to the stock exchange on Wednesday. Following the announcement, the company's share price fell by 9.74% to Tk13.90 on the Dhaka Stock Exchange.
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In September 2023, the company initially announced that its factory would remain closed for a year for a BMRE (Balancing, Modernization, Rehabilitation, and Expansion) project.
According to the disclosure, letters of credit (LCs) for major capital machinery have already been opened, but LCs for auxiliary and utility machinery have yet to be processed.
However, due to ongoing geopolitical issues and the global economic recession, suppliers have been unable to manufacture the required machinery on time, causing delays in the shipment schedule, it said.
The company reports that civil construction work is continuing. However, several challenges, such as the post-Covid-19 impact, the Russia-Ukraine war, the Middle East crisis, significant increases in foreign currency exchange rates, recent political unrest in the country, labour strikes, internet disruptions, and temporary shutdowns, have severely affected the progress of the BMRE project, it said.
Delays in receiving materials from suppliers have also further hindered the project, it added.
As a result, the company said it decided to suspend its production for approximately 12 more months to allow for the reconstruction of the factory building, the erection and installation of machinery, and the commissioning and trial production phases.
The company expects to complete the BMRE project within the period. Updates on the project's progress and the resumption of commercial production will be communicated to shareholders and regulatory authorities in due course.
