Metro Spinning is all set to more than double its production capacity within six months as it has finally reached the culmination of a plan to import new machinery made two years ago.
In October 2021, the company, which is a concern of Makson Group, announced its decision to invest Tk 2 billion for the reconstruction and expansion of its factory in order to cater to the growing demand for apparels abroad.
In a stock exchange filing on Tuesday, the company said they had finally succeeded in opening a letter of credit to import latest automated capital machinery to replace existing machinery.
After the installation of the new machinery, the company will be able to increase its production by 110 per cent.
At present, the company produces 8-10 tonnes of yarn per day, which will go up to 25 tonnes in six months after the completion of the expansion project, said company secretary Mohammad Jewel Rana.
The project is designed to produce value-added man-made fiber (MMF) and cotton yarn.
The expansion project was delayed owing to the dollar crunch, said Mr Rana.
"The foreign exchange market is still volatile, but the company managed to open an LC with Southeast Bank for importing necessary machinery."
The equipments will be imported from India. It is expected that the installation will be complete in six months.
Metro Spinning was established in 1993 and got listed on the stock exchanges in 2002.
Its half-yearly profit grew 15 per cent year-on-year to Tk 60 million in July-December 2022. No data has been made public for January to June this year.
The yarn manufacturer's profit soared 39 per cent year-on-year to Tk 85 million in FY22. Based on the profit, it declared 5 per cent stock and 3 per cent cash dividend. But the Bangladesh Securities and Exchange Commission rejected the application for issuing bonus shares.
STOCK PERFORMANCE
Following the news on expansion, Metro Spinning's stock closed at Tk 41 on Tuesday, rising 0.74 per cent over the day before.
When the company announced its expansion plan in 2021, its stock price was around Tk 27 and gradually peaked at more than Tk 53 through November last year.
The stock started to decline after November and came down to Tk 30 in March this year as the securities regulator canceled its stock dividend.
However, it managed to trade above the floor price during the period.
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