Metro Spinning in expansionary mood, to invest Tk200cr
The company has set a target of Tk300 crore revenue income from the expansion project
Metro Spinning Limited, a concern of Maksons Group, wants to invest Tk200 crore for the reconstruction and expansion of its factory and installation of new machinery in order to cater to the growing demand of apparel abroad.
The company has set a target of Tk300 crore revenue income from the expansion project.
Mozzamel Hoque, company secretary of Metro Spinning, told The Business Standard, "The apparel industry has absorbed the pandemic shock. Now we are passing through the recovery period. Besides, we have seen that the demand is increasing abroad. That is why the board of the company has decided to increase production with new investments."
He also said the new factory will be set up on the existing factory premises. But the company has not yet set a date for starting the construction work. They are now trying to arrange the fund from banks. When the project work starts, it will hamper the existing production.
The existing production capacity of the company is 26.29 lakh kgs. After the completion of the expansion project, it will reach 91.25 lakh kgs.
According to the Export Promotion Bureau, apparel shipments grew by 41.66% in September this year compared to the same month last year.
The highest earnings, $1.90 billion, came from knitwear shipment, while woven items fetched $1.51 billion, both posting over 41% growth from a year-ago period.
"The apparel earnings reflected the much-needed recovery in exports as well as increased demand for clothing worldwide as the Covid-19 situation is improving. However, the increased freight cost and yarn price has also inflated export earnings to a certain extent," Mohiuddin Rubel, a director of Bangladesh Garment Manufacturers and Exporters Association, had said earlier to The Business Standard.
In December last year, the company Chairman Mohammad Ali Khokon had announced they were going to invest Tk340 crore in the Mirsarai Economic Zone.
The company secretary said, "We have just signed an agreement with the Bangladesh Export Processing Zone Authority. But they have not allotted the land yet. After getting the land, the new project will start."
Meanwhile, the company also declared a 5% stock dividend for the shareholders for FY21.
After the dividend declaration, its share dropped 8.94% and closed at Tk27.50 at the end of Monday trading session at the Dhaka Stock Exchange.
However, in the last six months, its share price jumped 382% to Tk35.70. In this period, the stock exchanges sent queries three times, seeking reasons behind this unusual price hike. The company replied that there was no undisclosed price sensitive information behind the price hike.
In the last fiscal year, its earnings per share jumped 11 times and reached Tk0.99, which was only Tk0.08 the previous year.