Shasha Denims set for expansion

Export-oriented Shasha Denims plans to expand its production capacity by 10 lakh yards to 28 lakh yards in the next one and a half years, as it got regulatory approval in October to raise funds from public.
“In line with the expansion, modern machinery will also be installed that will improve the quality of denim fabrics,” said Jamal Abdun Naser, director of the leading denim fabric producer based in Dhaka Export Processing Zone.
The company will raise Tk 175 crore through the IPO, with 88 percent of the fund to be spent on the expansion project.
The denim producer will offload five crore ordinary shares at an offer price of Tk 35, including a premium of Tk 25 for each Tk 10 share.
The IPO subscription will begin on December 14 and end on December 21.
From the raised funds, the company, which started commercial production in 2000, will use Tk 18.23 crore for partial repayment of bank loans and the rest Tk 2.77 crore for bearing the expenses of the IPO proceedings.
Naser said there is a huge demand-supply gap for denim fabrics both at local and international markets. “Being one of the high quality denim fabric producers in the country, we want to exploit the opportunity.”
Every month, 25 local makers produce 30 million yards of denim fabrics while the demand is nearly 60 million yards, he said.

To fulfill the demand, 30-35 million yards of such fabrics are imported every month at $75 million on an average from different countries, including China, India and Pakistan.
Shasha has around 15 percent of Bangladesh's market share, after Partex Denims with 17 percent, followed by Envoy Denim with around 13 percent.
Bangladeshi entrepreneurs also supply denim to major retailers and brands, including H&M, Uniqlo, Levis, Nike, Tesco, Wrangler, s.Oliver, Hugo Boss, Puma, Primark, JC Penney, C&A, Tommy Hilfiger, Inditex, Walmart, M&S, Calvin Klein, Diesel, Gap, Channel, Dior and G-Star.
Naser said buying denim fabrics from local sources is a major way for manufacturers to reduce lead time for shipment.
“So, we are focusing on producing quality denim fabrics so that it helps the local users be more competitive in the international markets.”
Shasha Denims was incorporated as a private limited company in 1996 and converted into a public limited company in the next year.
It is engaged in manufacturing different types of classical indigo denim (denim fabrics) through the integrated manufacturing process of weaving, dyeing and finishing.
The main raw material used for the production is yarn, which the company imports mainly from China, India and Pakistan.
According to the audited financial reports for the year ending on December 31, 2013, the company's earnings per share stand at Tk 3.73, while its net asset value is Tk 52.95.
Presently, 37 textile and garment companies are listed on the Dhaka Stock Exchange with around 4 percent of the total market capitalisation, which stood at around Tk 328,415 crore on the premier bourse yesterday.