Modern Syntex gets nearly Tk 900cr loans
Modern Syntex Limited, one of the nation's largest man-made fibre (MMF) producing plants located at the Bangabandhu Sheikh Mujib Shilpa Nagar in Chattogram, received a loan of 38 million euros (Tk 440 crore) and a commercial syndicated term loan of Tk 450.5 crore.
With an investment of $131 million, Modern Syntex Limited's Continuous Polymerisation Plant will manufacture polyester staple fibres (PSF), textile grade polyester chips (PET chips), draw textured yarn (DTY) and fully drawn yarn (FDY), according to a statement from Standard Chartered Bank.
The production of these materials provides backward-linkage support that helps meet local demand across a variety of industries, including RMG, textile, footwear and vehicle-making.
This demand is currently being met via imports from China, Indonesia, Taiwan, Malaysia, India and other markets.
The newly minted plant has the potential to meet a significant percentage of the present annual demand for PSF, PET chips, and other textile-related products.
Md Mustafizur Rahman, director of TK Group, the parent company of Modern Syntex, said they were targeting to produce 425-450 tonnes of synthetic yarn from the plant, which is 30-38 percent of the total daily demand for such yarn in the country.
"This is an import substitute item, the daily demand for which in the country is 1,200 to 1,300 tonnes," he said.
Abu Sufian Chowdhury, managing director and chairman of Modern Syntex Limited, said in a statement: "With the help of timely financing, we could implement the project on time and are targeting to start commercial production by February, 2024."
It continued: "The project will save foreign exchange of approximately $60 million per year. It will also create about 1,500 direct employment opportunities and shall positively contribute to the MMF industry, which is expected to grow exponentially driven by increased demand for synthetic textiles worldwide."
Standard Chartered Bank was the sole lender of the Export Credit Agency (ECA)-backed term loan facility.
The bank provided end-to-end structuring and arrangement services to all stakeholders -- the borrower, the guarantors, ECA and the supplier.
The bank's product expertise enabled the Bangladesh-based client to access German government support, competitive pricing, and extended tenure for their project financing.
The commercial syndicated term loan in the local currency was jointly facilitated by eight commercial banks and financial institutions.
Standard Chartered was the mandated lead arranger, facility agent and security agent for both loans.
"Globally, the apparel industry is moving towards MMF, and Bangladesh has scant capacity in backward integration to support apparel exporters and meet this growing global demand," said Naser Ezaz Bijoy, chief executive officer of Standard Chartered Bangladesh.
"This timely investment will not only reduce the dependency on imported MMF, thereby saving foreign exchange and transportation costs, but will also enable our RMG sector to diversify their product basket for export of more high-value-added MMF products, such as technical textiles, functional apparel, and smart textiles.
"We are proud to support Modern Syntex Limited in this landmark achievement and look forward to working together to help the nation's textile and RMG sectors scale ever greater heights," he said.
A crest handover ceremony recently took place in Dhaka to mark the start of commercial operations at the plant.
Enamul Huque, managing director and head of corporate of commercial and institutional banking of Standard Chartered Bangladesh, and other senior officials from both organisations were present.
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