Matin Spinning to shell out Tk 227cr for expansion

Matin Spinning Mills, a unit of DBL Group, plans to spend Tk 227 crore to expand its production capacity by 17 tonnes a day to meet the company's growing demand for high-quality yarn.

The additional capacity of producing 10 tonnes of cotton melange, a type of yarn, and seven tonnes of synthetic yarn will boost the total capacity to 42 tonnes a day, said MA Jabbar, managing director of Matin Spinning Mills.

The company will be able to meet 52.5 percent of its daily demand for 80 tonnes of yarn, Jabbar said.

The company will spend Tk 126 crore, which was raised through an initial public offering, to set up its cotton melange project, the first of its kind in Bangladesh, he said.

It will spend Tk 101 crore to set up the synthetic yarn project, Tk 66.78 crore of which will come in loans from HSBC Bangladesh and the remaining Tk 34.62 crore from the company's own fund.

The expansion will boost business through better utilisation of its own assets, he said, adding that its dividend declaration capacity will also rise.

The projects will start yarn production in December 2015.

“Our spinning unit is one of the most modern spinning mills in Bangladesh having 50,000 spindles. The mill is equipped with the best machinery from Switzerland, Toyota and Murata from Japan,” Jabbar said.

“Our facility has a testing laboratory that is equipped with machines and instruments from Switzerland.”

Matin Spinning Mills' net profit rose 61.01 percent year-on-year to Tk 10.71 crore in the July-September quarter with earnings of Tk 1.10 per share, up from Tk 1.05 recorded for the same period last year.

The company's share price fell 0.94 percent to close at Tk 42.1 on the Dhaka Stock Exchange yesterday.

Matin Spinning Mills was incorporated as a private limited company in September 2002 and began commercial operations in October 2006.

The ISO certified company produces combed and carded yarn and the factory is located in Kashimpur, Gazipur.

Matin Spinning Mills was converted into a public limited company in November 2010 and it currently employs around 1,000 people with an installed capacity of 40,000 spindles.

DBL Group recorded a turnover of $300 million last year, supplying garments to H&M, Puma, Gerry Webber and Bonita in Germany.

Its journey began in 1991 with a garment factory to become an enterprise that saw an annual turnover of more than $243 million in 2012, riding on quality products at competitive prices, timely delivery and a committed workforce of 15,700 people.