New Evince Textiles unit goes into production in January
The firm failed to give dividends to its shareholders in fiscal 2017-18 to finance the unit, giving rise to discontent among its investors and share prices to fall below face value
A new environment-friendly unit of Evince Textiles Limited will go into production in January next year.
The export-oriented firm failed to hand over dividends among its shareholders in fiscal 2017-18 that could have helped finance the Tk70.37croreproject. It drew sharp criticism from investors and its stock prices fell below their face value.
Anwar-ul Alam Chowdhury Pervez, chairman of Evince Textiles Limited, told The Business Standard that the construction of the new unit will complete by December and it will start functioning in January next. The unit will ensure a 60% increase in production by the textiles firm.
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The textile sector in the country is already under pressure owing to increased production costs.
In addition, cheap imported thread and fabrics have turned out to be an uneven competition for the sector. But Anwar is confident that Evince Textiles Limited can thrive in this situation, as it produces for foreign buyers with a reasonable degree of esteem in the international market.
Anwar also said that Evince Textiles Limited produces denim fabric, which at present has a high demand in the international market.
Evince Textiles Limited, a concern of Evince Group, initiated a project in the fiscal year 2017-18 with the objective of increasing the number of its factories, accelerating its modernisation process and setting up an effluent treatment plant. The cost of the project was Tk70cr, within which was included a Tk55cr loan from Modhumoti Bank Limited. The firm had to meet the need for the remaining Tk15cr from its own funds. Thus, it did not give dividends to any of its shareholders in the fiscal year 2017-18.
But the firm has proposed giving 2% cash dividend and 10% stock dividend to shareholders in the fiscal year 2018-19. Stock dividend worth Tk16cr would be added to the paid-up capital of the firm. This additional sum would be used to set up an effluent treatment plant and the firm's own power generation centre.
Anwar said that the rise in dollar prices has forced the firm to finance the project with stock dividends.
Evince Textiles Limited sold thread and fabric worth Tk244cr in the fiscal year 2018-19, making a Tk17cr net profit and Tk1.07 earnings per share. The firm will hold its annual general meeting on October 28 to approve the dividend. The closing price of shares of the firm yesterday was Tk9.80 at Dhaka Stock Exchange.
On the other hand, Argon Denims, another concern of Evince Group, has proposed giving 10% cash dividend and 5% stock dividend to its shareholders in the fiscal year 2018-19. Stock dividends will increase the firm's capital by Tk 6cr, which will be utilised to finance the remainder of the work, especially in setting up a power generation centre, a compressor and an effluent treatment plant.
Argon Denims sold products worth Tk345cr in the fiscal year 2018-19, reaping a net profit of Tk37cr and Tk3.06 earnings per share. The annual general meeting of this firm will also be held on October 28. Yesterday the closing price of shares of the firm was Tk19.20 at Dhaka Stock Exchange.
Anwar is currently managing director of Argon Denims. He stated that to meet the expectations of international buyers' associations about ensuring a clean environment, a modern effluent treatment plant is being set up.
Provided international standards are maintained during production, the business of the firm will expand in the international market, he hoped.
