ML Dyeing to set up Tk63cr spinning unit
The new plant is expected to start operations in May this year
ML Dyeing Limited, a listed yarn dyeing company of Far Group, will set up a factory in Gazipur to start its spinning business.
The company will invest Tk62.58 crore for the business expansion.
Currently, ML Dyeing is engaged in the dyeing business of yarns for export-oriented sweater companies.
AKM Atiqur Rahman, company secretary of ML Dyeing, said "We have already imported machinery for the new plant. Despite the countrywide lockdown, we hope that the new plant will start operations in May this year."
The company sources said the new plant's production capacity will be 16,500 kg yarn per day. The annual turnover of this plant will be Tk78 crore and net profit Tk12 crore.
ML Dyeing entered the stock market in 2018. It was the third company of Far Group to be listed in the stock market. The other two companies are RN Spinning and Far Chemical Industries.
Of those, the production of RN Spinning was suspended following a fire incident - that took place in April 2019 - at the company's factory. The fire damaged the factory and inventories worth over Tk600 crore and the company is still dealing with the insurer for compensation.
The company was listed on the Dhaka Stock Exchange (DSE) in 2010, and has grown to a Tk392 crore enterprise in terms of paid-up capital through bonus and right shares issuance.
However, now it is posting losses. The last trading price of the company's shares was Tk3.8 each on Monday.
On the other hand, Far Chemical Industries was listed in 2014, and has increased its paid-up capital to Tk218 crore through issuance of bonus shares each year.
ML Dyeing's financial performance
The net profit of the company increased by 2% in the 2019-20 fiscal year, despite the coronavirus pandemic shock.
Its annual revenue declined by 3% to Tk238 crore for the last fiscal year, compared to the previous year. In FY20, the company dyed 1.8 crore pounds of yarns.
It disbursed 5% cash and 5% stock dividends to the shareholders for the last fiscal.
In the first six months of the current fiscal year, the company's earnings per share (EPS) decreased by 36% to Tk0.57, compared to the same period of the previous year.
ML Dyeing's share price was stuck at Tk50 for a long time due to the floor price mechanism which was withdrawn last week.
While the company got rid of the floor price, its share price fell by 13% to Tk43.3 each in the last two days at the DSE.
Out of total shares of the company, sponsors and directors hold 31.40%, institutional investors 22.55%, foreign investors 21.89% and general investors have 24.16% as of February this year.