Metro Spinning Ltd, a concern of Makson Group, has announced to keep its factory closed for 12 more months for renovations aimed at enhancing production capacity.
The spinning mill announced the closure of its factory through a stock exchange filing on Wednesday. Its factory remained closed since August 2023 for BMRE.
The company said they opened LCs to import major capital machinery but due to geopolitical and worldwide economic recession, the suppliers were not able supply the machinery in time, said the company.
As a result, the production of the company will remain suspended further for a period of 12 months for the reconstruction of the factory building.
Following the news, its stock price plunged 9.74 per cent to close at Tk 13.9 on Wednesday.
The company said the civil construction work was going on but due to the covid-19 impact, the Russia-Ukraine war, Middle East crisis, escalation of foreign currency rate, the recent revolution and subsequent overall situation of the country, labour unrest, business disruption due to internet disconnection, compelled the management to shut the factory.
"Delay in getting materials from the suppliers badly affected our BMRE project implementation further," said the company in a statement.
"We expect that the BMRE will be completed within the time frame. The company will further notify the progress of BMRE implementation and resume of commercial production to the shareholders and regulatory bodies in due course of time".
It may be mentioned that the project cost will be increased remarkably due to devaluation of local currency against US dollar and price hike of construction materials.
Nearly two years back in October 2021, Metro Spinning announced it planned to invest Tk 2 billion for the reconstruction and expansion of its factory in order to cater to the growing demand of apparel abroad.
"After implementation of the BMRE, the production capacity of the project will be increased remarkably from the existing production capacity thus the turnover and profitability will also increase accordingly".
Metro Spinning, a concern of Makson Group, was established in 1993 and got listed on the stock exchanges in 2002.
The company suffered a loss of Tk 192 million in FY23 and failed to declare dividend for FY23. It also incurred a loss of Tk 141 million in nine months through March this year.
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