Eshana Nonwoven Fabrics to go public for expansion

Eshana Nonwoven Fabrics Ltd seeks to go public aiming to expand its manufacturing capacity to tap the growing demand for its products in the international market.

The company, which went into commercial operation in 2016, has applied to the Bangladesh Securities Exchange Commission (BSEC) to raise Tk30 crore from the capital market. 

"From the long-term perspective, a bank loan is not a positive sign for us because of its high-interest rate. So, we have decided to go to the capital market," Md Maftun Haque, managing director of the company, told The Business Standard.

"The business expansion plan was taken a few years ago but we could not execute it due to Covid-19."

The company wants to issue three crore ordinary shares at the face of Tk10 each through an initial public offering (IPO).

Its principal activities are to manufacture and export a wide range of non-woven fabrics which is used for making PPEs, masks, non-woven bags, cushion covers, and garment accessories.

The managing director further said, "Four years ago, we started exporting through the European market. Now, we are exporting to four countries including the USA."

He said such business is moving towards emerging countries including Bangladesh, as the labour cost in China was high after the pandemic.  

Md Maftun Haque expects that their production capacity will increase by 60% and 200 new employment will be generated once the company executes the expansion plan.

Currently, more than 200 employees are working in the company.  

Out of Tk30 crore, the company wants to spend Tk17.17 crore on machinery, Tk5.47 crore on construction, and Tk6 crore on loan repayment.

In fiscal 2021-22, its revenue stood at Tk80.39 crore, profit at Tk12.84 crore and earnings per share at Tk2.32.

Sonali Investment Limited and Uttara Finance Capital Management Limited are working as issue managers for the company's IPO.

According to the UN Comtrade data, Bangladesh imported non-wovens worth $91.8 million in 2021, mostly from China, Hong Kong, Japan, India, and Korea. China is the source of about 85% of all non-woven fabrics in Bangladesh.

Bangladesh is rising as a significant player in the non-woven industry with just a few manufacturers against a large demand, said industry insiders. So, Bangladesh has a large opportunity to capture the market, they added.

The global non-woven fabrics market size was $40.5 billion in 2020 and is projected to grow to $53.5 billion by 2025.            

The market is expected to experience significant growth in demand due to the Covid-19 pandemic.

The pandemic has created a demand for non-woven products and solutions for hygiene, medical, construction, and filtration applications. An increase in demand for disposable hospital supplies during Covid-19 has been the key factor of non-woven fabrics globally.