Polyester chip plant in the pipeline

On the back of increasing demand for synthetics in textile and apparel industry, Malek Spinning Mills Limited plans to set up a polyester chip manufacturing plant with Tk515 crore investment.

Polyester chip, a derivative of petroleum, is used for producing non-cotton clothing (synthetic fibre and fabric), plastic bottles, packaging materials, high-tensile cords for tyres, strings for rackets and shatter-proof glasses.

The plant under the name of NewAsia Synthetics Ltd will enter commercial production within next two years with a production capacity of 300 tonnes of polyester chips per day in the first phase, officials said yesterday.

“In the second phase the production capacity will reach 600 tonnes a day,” A Matin Chowdhury, managing director of Malek Spinning, told a group of journalists while briefing on the new project.

He said in textile sector 60 percent of the world's production is based on synthetics, whereas in Bangladesh the figure is less than 10 percent due to non-availability of synthetic materials locally.

“World textile fibre consumption trebled over the last five decades. While cotton consumption increased by one and a half times during the period to reach 26.4 million tonnes in 2007, other fibres (85 percent polyester) increased eight times to reach 45.7 million tonnes,” he said, citing data from International Cotton Advisory Committee.

Chowdhury said the market share of cotton fell from an average of 62.4 percent in the 1960s to 39.8 percent in the 2000s.

"A polyester chip manufacturing plant in Bangladesh will definitely help textile and clothing industry as presently the entire requirement is met by imports from India, Korea, China, Middle East and Singapore," he said.

Presently, local synthetic yarn producers, beverage companies and printing and packaging industries need around 400 tonnes of polyester chips a day.

Chowdhury said two types of imported raw materials -- MEG and PTA -- will be used for producing polyester chips.

He said of the Tk515 crore investment, some Tk175 crore will be raised from public through both pre-initial public offering (IPO) or private placement and IPO.

A road show for private placement will be held on April 1 at Dhaka Sheraton Hotel.

The company will borrow Tk300 crore from banks and financial institutions.

Malek Spinning Mills, established in 1999, fetched Tk235 crore in turnover in 2008, and its subsidiaries include Salek Textile Limited, Knit Asia Limited and Rahim Textile Mills Ltd, which is a listed company.