Mozaffar Hossain Spinning Mills, a 100% export-oriented woven fabrics and cotton yarn manufacturer, has bounced back into profit from years of losses riding on the production of a new unit and an increasing demand for cotton yarn.
In the first nine months of the fiscal year 2020-2021, its revenue rose by 356% compared to the same period of the previous fiscal year, according to sources at the company.
In the third quarter, the spinner has reported a staggering 831% jump in revenue.
According to its financial statement, in the July-March period, the revenue stood at Tk96.69 crore, profit at Tk1.25 crore, and the earnings per share (EPS) at Tk0.12.
At the same period of the previous fiscal year, the revenue was only Tk21.26 crore and the company incurred a loss of Tk8.87 crore, while its loss per share was Tk0.88.
In the January-March quarter, the revenue stood at Tk61.27 crore, and profit at Tk4.95 crore and the EPS at Tk0.49.
At the same period of the previous fiscal year, the revenue was Tk6.58 crore and the company incurred a loss of Tk2.62 crore, while its loss per share was Tk0.26.
In the fiscal year 2019-20, the company, which got listed on stock exchanges in 2014, incurred a loss of Tk11.98 crore. A year ago, it incurred a loss of Tk9.56 crore.
Also, its revenue fell by 19.5% to Tk28.35 crore, from Tk35.22 crore, compared to the previous fiscal year.
The new unit of Mozaffar Spinning, which went into commercial operation in January 2021, has made a significant contribution to revenue and profit growth.
According to its financial statement, the Narayanganj-based spinner has suffered a 75% drop in revenue over the past three years and a production cut by half, and then it faced a negative impact of the Covid-19 pandemic.
Aiming to double the production capacity as well as revenue, Mozaffar Hossain Spinning Mills, a concern of SIM Group, has invested around Tk250 crore, creating employment for 900 workers and officials.
According to sources, the company's current annual production capacity is about 13,000 tonnes, which was 5,500 tonnes earlier.
The expansion project has been set up with 36,000 spindle machines, which required about Tk250 crore in additional investments
Currently, the spinning mill has the capacity to produce up to 40-count yarn in the range of cotton to blended yarn, including polyester, lycra and others.
Company Secretary Haris Alam told The Business Standard, "Thanks to the production at the new plant and the growing demand of yarn, the company has seen a big jump in turnover".
Earlier, the factory had to shut down a number of rotor machines for expanding the capacity. A fire incident at the factory also hampered the production for several days. These have impacted its previous year's earnings, he added.
Brand nomination and major clients
As an export-oriented textile mill, it produces 100% cotton and blended fabrics to meet the requirements of overseas buyers.
It has nominations from several top brands, including Inditex, Next, VF, H&M, Lee, Walmart, Riders Lee, George, and Tesco.
Besides, nominations from Carrefour, Uniqlo, C&A, Tommy Hilfiger, Target, Abercrombie & Fitch, and PVH Corp are in progress.
Mozaffar Spinning reserves about 50% of its production capacity for the holding company SIM Fabrics Ltd, while the lion's share of the rest of the capacity is used for ACS Textiles (Bangladesh) Ltd and Palmal Group of Industries.