Metro Spinning to set up composite textile unit

Metro Spinning, a sister concern of Maksons Group, plans to set up an export-oriented composite textile unit, a forward linkage for the yarn maker.

The unit will produce finished fabric from yarn in the course of sizing, warping, washing, manufacturing and finishing.

The unit will have 87,21,000 yards of fabric in yearly production capacity, officials said.

“We are going to set up the composite textile unit equipped with modern machinery and technology as part of our business expansion plans. We hope to start commercial operations by September 2010," Mohd Mohsin Adnan, executive director and company secretary of Metro Spinning.

“We have sourced land to set up the factory premises. We now need machinery and civil construction to set the unit,” he said.

The company is projected to make a net profit of Tk 10.86 crore in the first year, Tk 12.17 crore in the second, Tk 13.59 crore in the third and Tk 14.98 crore in the fourth from the expanded unit.

The company will raise Tk 31.05 crore from its shareholders by issuing rights shares to set up the new unit in Rupganj, Narayanganj.

The shareholders approved the rights shares issue proposal of Tk 2.07 crore ordinary shares of Tk 10 each at an issue price of Tk 15 per share, at an extraordinary general meeting (EGM) on Thursday.

The rights shares issue is however subject to approval of the Securities and Exchange Commission.

“Apart from the raised money, the remaining funds required to set up the unit will be borrowed from banking sources,” Adnan said.

At the EGM, chaired by Chairman Abdul Ali, the shareholders also approved increasing the authorised capital from Tk 10 crore to Tk 100 crore. The company's existing paid-up capital is Tk 6.9 crore.

The shareholders also asked the management to set up a power plant as a subsidiary of Metro Spinning, which was approved.

The funds needed to form a power plant at Ashulia will be raised from the capital market through private placements, repeat public offers, rights share offer, issuance of convertible or non-convertible preference shares or bonds and bank loans or lease finance, whichever seems convenient, subject to approval of the SEC.

Mohammad Ali Khokon, managing director of the company, was also presented at the EGM.

Metro Spinning has two units, one catering to the local market and the other for export markets, where carded and combed knit cotton yarn of various counts is being produced.

sarwar@thedailystar.net