Paramount Textile PLC, a listed company belonging to Paramount Group, is diversifying its business portfolio in the power sector after faring well in the textile sector.
Considering business prospective, Paramount Textile has now decided to invest in a solar plant by acquiring a 49% stake in Dynamic Sun Energy Private Ltd in Pabna.
Shapoorji Pallonji Infrastructure Capital Company Pvt Ltd (SP Infra), a subsidiary of Shapoorji Pallonji Group of India, has an investment in Dynamic Sun Energy.
The two companies together will build a solar plant to supply electricity to the national grid.
Paramount Textile will invest in the plant from its own sources and bank finance.
It is engaged in manufacturing the woven fabric that is consumed by the export-oriented garments industries in Bangladesh.
The company produces high-quality woven fabrics which include 100% cotton yarn-dyed fabrics, cotton solid white fabrics, striped and check shirts and stretch fabric.
Additionally, the textile company has already invested in two more power plants that have already been in production.
According to company sources, the portfolio is being diversified keeping in mind the long-term plans and its future business because the Covid-19 pandemic has shown that it is not possible for a business to survive by relying on just one sector product.
So even if one sector suffers, the business is being diversified with the aim of making a good income from other sectors.
"The business portfolio is being diversified with a long-term plan. Not only this, the investment in the textile sector has also been increased. The existing production capacity of the textile sector has been almost doubled," said Md Robiul Islam, company secretary of Paramount Textile.
"There will be a big jump in the company's revenue and profits in the future so that the shareholders will benefit from the investment," he added.
Acquiring 49% in Dynamic Sun Energy shares
Paramount Textile is a partner in the construction of a 100MW (AC) powered grid-tied solar PV power plant.
The joint venture will acquire 49% of the total paid-up capital of Dynamic Sun Energy.
The estimated project cost of the solar plant would be around Tk1,300 crore, according to a stock exchange disclosure published on Tuesday.
The company has signed a 20-year agreement with the Bangladesh Power Development Board to supply electricity to the national grid.
The company's tariff per unit of electricity has been set at $0.1195.
49% stake in Paramount BTrac Energy
Paramount Textile owns 49% shares of Paramount BTrac Energy (PBEL) which had established a 200MW HSD fired engine based power plant at Baghabari of Sirajganj. The plant went into operation in February 2019.
Paramount BTrac Energy, a special vehicle company, holds 51% and it will act as the lead & operating member.
According to its annual report for FY21, the company has invested around Tk105.28 crore, and its profit was Tk37.28 crore.
Purchased 80% of Intraco Solar Power's shares
As a part of portfolio diversification and option for lucrative return, the company has executed an agreement for purchasing 80% shares of Intraco Solar Power Limited (ISPL) on 15 November 2020.
It also signed a share purchase agreement with Intraco CNG for purchasing a 29% stake or 43,50,000 shares of Intraco Solar Power. Paramount Textile purchased the portion of Intraco CNG at a value of Tk18.48 crore.
$85.45m investment to increase production capacity
Last year, Paramount Textile invested $85.45 million or more than Tk700 crore (Tk86 per dollar) to increase the production capacity in order to increase the company's revenue by $7 million per month, the company said.
The company had businesses in yarn dyeing, weaving, solid dyeing, and a digital printing unit. However, with the new investment, the knit fabrics unit has been introduced, which has a production capacity of 400 tonnes per month.
In addition, Paramount Textile has increased the production capacity of existing units.
Md Robiul Islam said, "The main focus of the company is in the textile sector. The new investment will have a big impact on the company's revenue."
Profit increased despite income drop
Although the revenue of Paramount Textile has decreased a little in the fiscal 2020-21, the profit has increased.
For this, the company has increased the dividend by 10% over the previous year.
Paramount Textiles has given 20% cash and 5% bonus shares to the shareholders in FY21, compared to 15% cash and 5% bonus shares in the previous year.
In fiscal 2020-21, its revenue was Tk502.07 crore, which is about 2.58% less than the previous year.
After paying taxes, the company had a net profit of Tk66.19 crore, up from Tk65.88 crore in the previous year.