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Envoy Textiles has decided to increase its blended yarn production capacity by 4,550 metric tons annually by investing Tk 973 million.
At present, it has a production capacity of 4,200 metric tons per year.
"We need more blended yarn for our denim fabric production. If we import it, we will have to pay more. So, we have decided to boost our production capacity by another 4550 metric tons, 60 per cent of which will be consumed by us," said Chief Financial Officer Mr Saiful Islam of Envoy Textiles.
According to a stock exchange filing on Sunday, the board of directors of the company has given its go-ahead for establishing a Spinning Project Expansion Unit on the existing factory premises. The project aims to expand production capacity, focusing on cotton-polyester-spandex core-spun yarn.
The total investment will be financed through a combination of 30 per cent equity (Tk 291.90 million) from retained earnings and 70 per cent debts (Tk 681.10 million) from banks.
The project is expected to be completed by December 2025.
Approximately 60 per cent of the additional yarn will be utilized in-house for denim production, while the remaining 40 per cent will be exported.
Meanwhile, the share price of the company stood at Tk 43.30 each on Sunday.
In FY23, the profit was Tk 327 million and the company paid a cash dividend of Tk 1.5 per share. The year after profit went up by nearly 83.44 per cent to Tk 600.39 million and the company recommended cash dividends of Tk 2 per share.