Malek Spinning's subsidiary JM Fabrics to invest Tk157cr for business expansion
Seamless technology involves the creation of garments without traditional seams, eliminating the need for cutting and sewing separate fabric pieces together.
JM Fabrics Limited, a subsidiary of the publicly listed Malek Spinning Mills, is set to invest Tk156.7 crore to enhance production capacity at its existing seamless, and yarn texturising and covering facilities.
Seamless technology involves the creation of garments without traditional seams, eliminating the need for cutting and sewing separate fabric pieces together.
In a disclosure on Tuesday, Malek Spinning — a concern of the New Asia Group — stated that the board of JM Fabrics has approved the company's expansion plan. The project will be financed through the company's internal sources and bank loans.
The parent company Malek Spinning will not provide any funds for this expansion project of JM Fabrics, the disclosure reads.
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After the expansion, production capacity is expected to increase from 5.29 crore pieces to 5.49 crore pieces per annum, which will in turn boost the company's sales and profitability.
Also, there will be value addition due to improvement of product quality, which will enable the company to sell its products at higher prices, the disclosure reads.
JM Fabrics, which was acquired by the New Asia Group in 2011, makes ladies' lingerie, men's innerwear, and cut and sew jerseys including seamless functional sportswear.
It is a 100% export-oriented firm that supplies to some big global brands like Next, Paul Smith, Guess, Inditex, H&M, American Eagle, and Eddie Bauer, according to its website.
JM Fabrics, out of the three subsidiaries of Malek Spinning, contributes the most to its parent company's revenue.
In the fiscal 2021-22, Malek Spinning earned a consolidated revenue of Tk1,675 crore, where Tk944 crore was earned by JM Fabrics.
In FY22, JM Fabrics profit stood at Tk47.76 crore, and Malek Spinning's consolidated profit at Tk72 crore.
Meanwhile, JM Fabrics and Malek Spinning have entered into a rental agreement where Malek Spinning will give its unutilised scrap godown to JM Fabrics on rent at monthly Tk15 per square feet.
Therefore, the total rent of the 52 thousand square feet scrap godown will be Tk7.8 lakh per month.
