Envoy Textiles says its profits to double in 2016
Envoy Textiles says its profits to double in 2016
Envoy Textiles expects to double its net profit to Tk 60 crore when its spinning unit begins producing yarn in June 2016.
“We are putting in Tk 235 crore to set up the spinning unit at Bhaluka in Mymensingh, to become a full-fledged textile manufacturer,” said Abdus Salam Murshedy, managing director of Envoy.
The unit will produce 17,500 tonnes of yarn a year, which is 30 percent higher than the company's own demand, he said.
Envoy, a leading denim maker in Bangladesh, currently uses 24,000 tonnes of yarn a year to make fabric, and it intends to sell the spinning unit's residual output.
The new unit will create around 400 jobs, in addition to the 1,600 people already working for Envoy, Murshedy said.
Envoy makes 48 million yards of fabrics annually, and is a supplier of readymade garments to Wal-Mart, H&M, JC Penney, GAP, Carrefour, Zara and Next.
“We are expecting better business in the coming years, as buyers from Europe and America are now expressing interest in sourcing more denim products from Bangladesh, bypassing China, India, Pakistan and Vietnam,” Murshedy said.
Most of the machinery for the Envoy's spinning unit will be sourced from Germany, Switzerland and Japan, he said.
On December 10, Envoy entered an agreement to sell cloths to Prosperity Textile, a denim manufacturer in Guangdong province of China, according to Dhaka Stock Exchange. The Chinese textile maker will also share technical know-how with Envoy, especially for product development, it said. However, the company's net profit fell 28.61 percent year-on-year to Tk 31.09 crore during the year that ended in September this year.
Envoy's profits took a hit from the downward trend in international orders and a fall in prices caused by political instability in Bangladesh last year, which also increased overheads arising from underutilisation of capacity, Kutubuddin Ahmed, Envoy's chairman, said in its financial report.
The company recorded a turnover of Tk 439 crore during the year, a 10.23 percent growth year-on-year.
The company's revenue growth was higher in the last two quarters compared to the first two due to a more stable political outlook, Ahmed said. Envoy declared 12 percent cash and 3 percent stock dividends last year.