Market cheers as KDS Accessories boosts production

KDS Accessories has enhanced its production capacity of elastics and label and garment accessories products by introducing a machine in order to meet higher demand.

The highest capacity will be 4 crore pieces per year and it may generate approximate additional sales revenue of Tk 33.3 lakh per month and Tk 4 crore annually on utilisation of highest capacity.

The commercial production started from Saturday, KDS Accessories said in a posting on the Dhaka Stock Exchange website yesterday.

The news sent the company's share price up: KDS Accessories closed at Tk 44.20, 5.71 per cent higher than the previous day.

The company decided to purchase the machine at $0.091 million in mid-October.

"The new machine will be able to produce elastics and label with printing and everything," said Biplob Kanti Banik, chief financial officer of KDS Accessories, adding that the instrument was bought with the company's own funds.

As the textile sector is expanding, the demand for accessories is also enhancing. To meet the demand the company expanded its production capacity, Banki added.

The company's main contribution to its revenue came from carton: it contributed 77 per cent or Tk 178 crore.

Contribution of label and elastics & narrow fabrics is now 3.53 and 5.53 per cent respectively, which was lower in the previous year.

In the 2018-19 financial year the company's overall sales increased 11.17 per cent year-on-year to Tk 230 crore.

At the same time, KDS's earnings per share fell to Tk 2.20 from 2.21. Net operating cash flow per share of the company also declined 34.41 per cent to Tk 2.02.

The company's stocks rose 35.13 per cent to Tk 45 in the span of last one and half months.