Its manufacturing plant will produce 2 million bags annually, which will be exported to Europe and Japan, and bring in Tk400 crore in revenues
Involved in the garment accessories business, SK Trims and Industries now plans to manufacture luggage, travel bags and backpacks for the global market.
The company has already established a six-storied factory with Tk10 crore in Gazipur for this purpose.
Siran Bin Sarwar, company secretary of SK Trims, told The Business Standard that luggage plants are being installed through bank loans and their own funds.
"A letter of credit has been opened for importing machineries. We expect those to arrive within the next four to five months," Sarwar added.
The manufacturing plant will produce 2 million bags annually to export to Europe and Japan, he further said, adding that the export will bring Tk400 crore in revenues.
Global bag market
Officials of SK Trims said the travel bag business is expanding globally on back of the expanding tourism and travel industry.
The market size is around $17 billion and is expanding by 15 percent per year. China dominates 60 percent of the business, they said.
The US is the top importer of luggage while Europe is the second.
According to the Export Promotion Bureau, Bangladesh exported travel bags and luggage worth $148 million in the first seven months of the current fiscal year.
In the previous fiscal year, the amount of export was $247.2 million. Export growth was 53 percent in the last decade.
Investment for business expansion
To expand its business, SK Trims also invested in pre-fabricated industries and sectors including pharmaceuticals, packaging, manufacturing and garments in 2019.
Starting production in 2014, the business value of SK Trims was Tk114.67 crore in the 2018-19 financial year, with a 508 percent growth in business by this time.
The net profit for the company was Tk19.44 crore at the same time, which has increased by 1115 percent.
It has collected Tk30 crore from the share market through initial public offering to expand its garment accessories business.
SK Trims provided 10 percent cash and 10 percent stock dividend to its shareholders in the previous fiscal year. In FY18, the dividends were 2 percent in cash and 10 percent in stock.
The paid-up capital of the company is Tk84.70 crore. Among the shares, 30.21 percent belongs to sponsors and directors. Institutional investors hold 29.49 percent share and the general investors hold 40.30 percent.
SK trims' closing price was Tk71.90 at the Dhaka Stock Exchange on Thursday.
The highest price of the company's shares was Tk74.30 and the lowest was Tk38.90 last year.