Envoy Textile to set up spinning project expansion unit

FE ONLINE REPORT | Thursday, 15 July 2021

Envoy Textile has decided to set up a spinning project expansion unit at its existing factory premises with an estimated total cost of Tk 1761.90 million.

The new expansion project will be set up at Jamirdia in Bhaluka, Mymensingh having a capacity of 3,710 metric tonnes cotton-polyester-spandex core-spun yarn productions per year, the company said in a filing with the Dhaka Stock Exchange (DSE) on Thursday.

Out of the total estimated cost of the project, Tk 561.90 million to be invested from the company’s retained earnings and the remaining Tk 1200 million to be financed by bank borrowings. The debt-equity ratio is considered at nearly 32:68, according to the filing.

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

The project is configured with all European and Japanese machinery with state-of-the-art ring spinning production facilities.

Around 98 per cent of capacity is assumed to be utilised. Production of around 60 per cent to 70 per cent to be consumed in-house for the denim production, and the remaining is for the deemed export market.

The project is expected at a payback of investment by seven years.

Each share of the company, which was listed on the DSE in 2012, closed at Tk 31 on Wednesday.

The company disbursed a 5.0 per cent cash dividend for the year ended on June 30, 2020. In 2019, it had provided a 15 per cent cash dividend.

The company’s paid-up capital is Tk 1.67 billion, authorised capital is Tk 4.0 billion and the total number of securities is 167.73 million.

The sponsor-directors own 45.58 per cent stake in the company while the institutional investors own 43.59 per cent, foreign investors 0.06 per cent and the general public 10.77 per cent as of May 31, 2021, the DSE data show.

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